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Thu 4th Jul 2019 - Propel Thursday News Briefing

Story of the Day:

Duck and Rice to open two or three more sites in London before Asia roll-out: Ted Kennedy, director of Alan Yau’s Duck and Rice restaurant in Soho, has said the concept will look to open “two or three” more sites in London before eyeing roll-out across Asia. Speaking at the Propel Summer Conference, Kennedy told delegates: “The original idea was to make it a success in London then roll it out across Asia. I suspect the next stage for Duck and Rice is to do two or three more sites in London – there are a lot more sites currently on the market. Then I think someone should take it on from us and run with it – but it would be throwing off money by that stage.” From the floor, Propel managing director Paul Charity asked how Duck and Rice, which offers “fantastic value for such high-quality food”, was recovering after at one point posting £16,000 a week in losses despite £80,000 a week in sales? Kennedy, who is also chairman of Pebble Hotels, said: “We haven’t de-skilled anything, we’ve invested a little bit in new equipment to make if more efficient. We have put in an extra 15 covers by rejigging the site and looked at menu margins. Even at £30 a head we get 78% food margin. We made sure we didn’t lose the magic dust the customer sees but tried to drive more efficiency. Getting rid of central costs made a huge difference. We outsourced all the accounting and the costs we hammered were costs that sat outside the restaurant.” One problem Kennedy had to face before Duck and Rice launched was the beer offering. The restaurant took over a former run-down pub in central Soho that had lost its licence. However, the initial fit-out saw the cellar turned into a kitchen, leaving nowhere to store beer – a problem solved by turning to tank beer. Kennedy said: “Tank beer now makes up 70% of our drinks sales. It might have changed but at one point we were the second-biggest seller of Pilsner Urquell tank beer in Britain!”

Industry News:

Mark Wingett to look at whether property has reached tipping point in latest Premium column, Ted Kennedy video: Propel insights editor Mark Wingett will look at whether property has reached tipping point as part of his latest opinion piece, which will be sent to Propel Premium subscribers on Friday (5 July) at 5pm. He will also look at recent changes at Las Iguanas and Greene King and whether we should stop saying “hospitality is a job for life”. Subscribers will also receive a 30-minute video on Friday in which Ted Kennedy, owner of Pebble Hotels and veteran operator of pub assets, sets out ten key lessons learned as an operator and how these have been applied to making Alan Yau’s Duck and Rice concept profitable. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from Mark Wingett. They also receive access to our database of multi-site companies, which has now grown to 1,400 businesses. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Propel launches Pre-booked Sales Masterclass, open for bookings: Propel has launched the Pre-booked Sales Masterclass to help operators make the most of this increasingly important opportunity. The event takes place on Thursday, 5 September at One Moorgate Place in London and is open for bookings. Propel has partnered with former Novus sales director Rupert Macfarlane, who now runs The Advanced Sales Network, to show how, when implemented correctly, pre-booked sales can transform a business’ performance. He will explore ten steps to pre-booked sales growth, including determining the level of resource required to efficiently achieve reactive and pro-active sales goals; recruiting the best sales people and creating a high-achieving sales team; delivering true sales growth, not cannibalisation; and making pre-booked sales growth “stick”. Tickets are £295 plus VAT for Propel Premium subscribers and £345 plus VAT for others. To book, email or call 01444 817691.

Epicurean Club targets 300 premium pubs and inns on platform following Inn Places deal: The Epicurean Club is aiming to grow the number of premium inns and pubs on its invite-only platform to 300 in the next six to nine months following its acquisition of accommodation booking website Inn Places. The deal has seen Inn Places founder David Hancock take on the role of inn curator for the group as it aims to create the largest direct marketing channel and booking platform for premium inns and pubs. Epicurean Club chief operating officer Ed Hill said the relaunched Epicurean Collection would “showcase the very best inns and pubs across Britain” with curated experiences adding value for the guest and financial return for the operator. Hancock told Propel he hoped the majority of Inn Places’ 200 pubs and inns would join the 24 on Epicurean’s platform, with discussions were already taking place with one small pub group. Membership to the Epicurean Collection is free for those invited to join. Member pubs and inns are promoted through marketing campaigns. The Epicurean Club partnerships team will work with landlords to create bespoke experiences to enhance the guest offering, with access to partner brands and their products and services. Hill said: “The Epicurean Club was founded by a passion for Britain’s inns, pubs, countryside and everything it relates to. This collection is about creating community and belonging – a community of premium inns and pubs that deliver exceptional guest experience.” Later this year, Epicurean Collection inns and pubs will be able to benefit from regular networking and learning events across the country through membership of Inn Places’ Inn Club.

UberEats tests ‘dine-in’ option: UberEats is quietly testing a dine-in option. Customers in Austin, Texas, can choose to “dine in” as well as ordering delivery or pick-up. Dine-in options allow customers to order and pay ahead, an increasingly expected feature on apps from companies such as McDonald’s, Taco Bell and Starbucks, reports Business Insider. Uber declined to provide further information about where it is testing the dine-in option or when it rolled out the test. A spokesman said: “We’re always thinking about new ways to enhance the Eats experience.”

Grubhub boss refutes copycat website allegations: Grubhub chief executive Matt Maloney has refuted claims the delivery company is creating copycat restaurant websites to boost online commission fees. Maloney was responding to recent reports by the New York Post and New Food Economy that allege Grubhub creates doppelganger restaurant websites that look legitimate to the consumer. The reports said lookalike sites were luring customers into ordering food that triggered a commission to Grubhub because it owns the site. Orders made directly through a restaurant’s main website would not be subject to additional fees. However, Maloney said Grubhub created the sites for clients five years ago during “tougher” times to help restaurants establish a digital presence. He said the company stopped the practice last year after it purchased Yelp’s delivery service, Eat24. Grubhub said its past practice of registering domain names and creating websites for restaurants had been carried out with “explicit permission” from clients, which signed contracts with the company, and said it charged restaurants “close to zero” in marketing commission on orders made through those sites, reports Nation’s Restaurant News. The impact of delivery commission fees on restaurant operators was the subject of a New York City oversight hearing last week.

Company News:

Authentic Alehouses’ secured creditor plans to take control of pubs: Crowdstacker, the secured creditor of Authentic Alehouses, plans to take control of the company’s pubs and run them through a new vehicle, Propel has learned. Crowdstacker said it believed the move represented the best opportunity to return capital to investors. Propel understands some of the Authentic Alehouses management team will remain in place to ensure a smooth transition, including pub managers and the regional manager. Allan Harper-led Authentic Alehouses entered administration in March despite raising £6.4m in peer-to-peer loans via Crowdstacker. Simon Bonney and Michael Kiely, of Quantuma, were appointed joint administrators. The seven-strong portfolio has been independently valued at circa £3m. Four of the pubs – The Albert Hotel in Hull, the Countess of Rosse in Shipley, The Fountain Inn in Barnoldswick and The Ponty Tavern in Pontefract – are currently operating and are cash-generative. However, operating costs are higher than they could be because it isn’t possible to sign long-term supply contracts. The other three pubs – the Crown Inn in Addingham, The Red Lion in Driffield and The Wakey Tavern in Wakefield – are closed because there are no funds available to complete required refurbishments. Propel has also learned the two offers on the table were for The Wakey Tavern and the Countess of Rosse and represented on average 10%-plus excess against their valuations. An email from Crowdstacker to investors, which has been seen by Propel, stated: “We believe operating all the pubs for at least 12 months (with long-term supply agreements in place across all the pubs) represents the best opportunity to return capital to investors. A new company has been set up to trade the pubs.” Authentic Alehouses launched in July 2017 with a £5m crowdfunding campaign on Crowdstacker that was later doubled. Harper also led Burning Night Group, which went into administration in October after raising £7.5m on the same platform. In December, Burning Night Group was bought out of administration by a special purpose vehicle created by turnaround specialist Access Commercial Finance, which was a secured creditor of Burning Night Group.

Pizza Pilgrims plans training academy: Pizza Pilgrims, founded by brothers Thom and James Elliot, is planning to launch a training academy in London next year, Propel understands. Speaking at the Global Restaurant Investment Forum in London, Thom Elliot said the company hoped to open the academy next year and was in talks regarding a possible site. He said: “Everyone is looking for fantastic staff and launching an academy would be part of our attempt to find a solution to that problem and add another layer of attraction for future team members. It would allow us to train our staff in a kitchen and front-of-house environment and allow them to test what they have learned on the public – a kind of throwback to the old catering schools.” The company currently operates 11 sites – ten in London and one in Oxford. It opened its latest site earlier this year at Westfield London’s new food court. Elliot said the company had raised further funds from existing investors earlier this year but it would “continue to take a steady approach to expansion”.

Wagamama to close New Zealand restaurants: Wagamama, The Restaurant Group-owned chain, is closing its New Zealand sites. The company posted a statement on its website announcing the closures. It stated: “We are very sorry our time in New Zealand has, for now, come to an end. We’d like to raise our chopsticks and thank all our loyal customers who have visited us at Wagamama New Zealand over the years. We hope one day to be back on your shores.” No date was given for the closures. Wagamama operated restaurants in Auckland’s Newmarket and Sylvia Park and on Wellington’s waterfront.

KFC vegan burger back in stock after trial stores sell out in three days: KFC’s Imposter vegan burger is back in stock at its 20 trial stores after the menu item sold out in the first three days. KFC introduced the Imposter at sites in Bristol, London and the Midlands last month as part of a four-week pilot. KFC tweeted: “Demand for the Imposter burger was unfathomable! We’ve worked some magic and got it back in our trial restaurants but, be warned, good things don’t come to those who wait – it’s only available until 14 July.” The meat-free burger consists of a “Quorn fillet coated in the Colonel’s Original Recipe herbs and spices” and topped with iceberg lettuce and vegan mayonnaise. KFC previously said it had been prompted to make the move by customers seeking “broader choices”.

Bala Baya eyes West End opening and international play: Bala Baya, the Tel Aviv-inspired concept from former Ottolenghi chef Eran Tibi, is hoping to launch a flagship West End site before exploring international expansion opportunities. Speaking at the Global Restaurant Investment Forum in London, Tibi said he planned to open a “bigger, wilder” West End site in the near future. He also said he was looking for a partner to aid expansion of the concept overseas, someone who could help with “investment and strategy”. He said: “Internationally, I think there are some really good opportunities for the concept, especially in what I would call fun places such as Los Angeles, Miami, Dubai and Ibiza. It is all about debauchery – but in a good way!” The debut Bala Baya opened in Southwark at the start of 2017. The restaurant – based in one of the arches in Union Street – was the first standalone project by Israel-born Tibi, who has also worked at Made In Camden and Zest at JW3.

Patisserie Valerie launches summer menu and redesigned gateaux range following shake-up: Patisserie Valerie has launched its summer menu and redesigned range of patisserie and gateaux following a shake-up by new owner Causeway Capital. The offer includes five individual patisserie – strawberry gateau, double choc, Black Forest chocolate, baked cheesecake and mille-feuille. There is also an all-day brunch menu that includes smashed avocado on bloomer toast, eggs benedict and Madame Valerie’s vegan breakfast. Meanwhile, the lunch to dinner menu has been stripped down and includes dishes such as croque monsieur, salad, stuffed croissants and sandwiches. There is also a new cold drinks range in partnership with Cawston Press. Patisserie Valerie managing director Paolo Peretti said: “We are really excited to share some of the hard work that’s gone on behind the scenes at Patisserie Valerie in the past few months. We’ve not just put the butter back in our pastry we’ve upgraded the quality of the ingredients, from Italian amarena cherries on our Black Forest gateau to Mediterranean figs in our vegan super wholefood salad. Hopefully this investment in quality shows our commitment to grow the Patisserie Valerie brand to keep it at the heart of the high street.” Causeway Capital acquired Patisserie Valerie out of administration in January after it was unable to secure new bank finance following the discovery in October of “potentially fraudulent” accounting irregularities that left a £94m black hole in its finances.

Large rent hike forces Flat Iron to close Notting Hill site: Flat Iron, the “single steak” dining concept backed by private equity firm Piper, closed its site in Golborne Road, Notting Hill, last month because of a “large rent increase”. The company told Propel all team members had been relocated within the business, including at the Spitalfields site that opened on Monday (1 July) and its Arcade Food Theatre site that will launch on Monday, 22 July beneath Centrepoint in Tottenham Court Road. Founder Charlie Carroll told Propel: “I have always loved Golborne Road – although it’s not well known it has the most amazing community and vibe. We are sad to leave but, given the rent hike we have been asked for and the amazing value we strive to offer, a small neighbourhood site with limited transport links no longer adds up. We are fiercely proud of what we did with the site and hope we were a valued part of a community we love. We are focusing on our new Flat Iron restaurant in Spitalfields and launching Flat Iron Workshop at Arcade Food Theatre.” Flat Iron, which is led by Jo Fleet and includes Tom Byng as a non-executive director, secured £5m of funding from UK-based SME lender ThinCats in January to fund expansion plans during the next three years through further openings in the capital and a regional launch.

Great Northern Inns acquires 11th site: Nottinghamshire-based Great Northern Inns has acquired a bar and brasserie in Newark for its 11th site. The company has added The Ram in Castle Gate to its portfolio. Its menu features home-cooked favourites, traditional pub grub, tapas and pizza alongside real ale and wine. All staff members have been retained with several new positions created. Great Northern Inns director David Willans told West Bridgford Wire: “We have been looking to expand into new areas of Nottinghamshire and the location and huge potential of The Ram presented a fantastic opportunity.” Several long-standing members of the company’s management team have been brought on as partners in the new venture. Willans added: “It is so rewarding that individuals we have employed for many years have the opportunity to become partners in our new ventures and hopefully this gives younger staff members incentive and insights into the company’s values.” Great Northern Inns operates Copper Cafes in West Bridgford, Mapperley and Nottingham city centre as well as seven bars in and around Nottingham.

Rockfish to open seventh site, in Weymouth next month: Sustainable seafood restaurant brand Rockfish will open its seventh site, in Weymouth, Dorset, next month. The company is transforming a former pub on the seafront. The restaurant in The Esplanade will also feature a terrace and private “captain’s room”. Founder Mitch Tonks shared his plans for the restaurant in a video on the company’s website. He said: “Weymouth has to be one of the loveliest beaches in the country. There’s a mile of fine sand that gets raked every day, deckchairs get set out and I think Weymouth is the epitome of an English seaside town. It’s the perfect place for a Rockfish restaurant.” The Weymouth restaurant is one of two sites opening in Dorset this year after the company received seven-figure backing from HSBC. The other will be in Poole. Tonks opened the first Rockfish restaurant in Dartmouth, Devon, in 2010.

Paul Ainsworth opens cookery school and chef’s table for fourth Padstow venue: Restaurateur Paul Ainsworth has opened a cookery school and chef’s table for his fourth site in Padstow, Cornwall. Ainsworth and wife Emma have launched Mahé, which adjoins his Paul Ainsworth at No.6 venue. Mahé takes its name from an island in the Seychelles where Ainsworth’s parents met. During the day, Mahé hosts a cookery school in which six people build chef skills and create their own dishes to take home. Classes are tailored to guests and taught by Michelin-starred chef John Walton, who has been head chef at Paul Ainsworth at No.6 since it opened in 2009. In the evening, Mahé hosts ten diners for a chef’s table experience featuring a bespoke menu. Ainsworth, who also operates Rojano’s in the Square and Padstow Townhouse in the Cornish town, said: “John and I have had so much fun putting these classes together. It’s a dream come true to open Mahé.”

Gloucestershire-based hotel and leisure group ‘well placed for growth’ as it reports turnover boost: Gloucestershire-based hotel and leisure group Calcot Health has said it is “well placed for growth” after completing several refurbishment and enhancement projects at its properties. The company operates Calcot Manor in Tetbury, three other Cotswold properties and The Lord Crewe Arms Hotel in Blanchland, Northumberland. Calcot Health saw turnover rise to £17,118,627 for the year ending 31 December 2018 compared with £16,608,399 the previous year, according to accounts filed at Companies House. Pre-tax profit fell to £199,239 compared with £489,286 the year before as a result of the refurbishments, which led to partial closures. In their report accompanying the accounts, the directors stated: “The company is committed to maintaining the quality of the assets and completed several refurbishment and asset enhancement projects in the early part of the year, which required partial closures to the hotels. Despite these interruptions the business grew revenues, achieving improved occupancy and dining numbers in all properties. This was insufficient to cover the rapidly rising wage levels in the sector as well as the refurbishment costs, and profits slipped back on the previous year. The hotels are well positioned and in good shape following this ongoing focus and investment.”

Rudy’s to open fourth site, in Birmingham this month: Neapolitan pizza concept Rudy’s, which is owned by Mission Mars, the north west-based operator behind Albert’s Schloss, will open its fourth site, in Birmingham this month. The company will launch the 100-cover venue on Monday, 15 July in the former Amantia restaurant in Bennetts Hill. Rudy’s Birmingham general manager Gavin Curtis said: “We are overwhelmed with the response we have had so far from the people of Birmingham. We are passionate about following Neapolitan traditions, which makes Rudy’s Pizza what it is today.” Rudy’s opened its debut site in Ancoats, Manchester, in 2015 and has added a site in the city’s Peter Street and a venue in Liverpool. Rudy’s makes its dough on-site each day, taking 24 hours to double ferment and 60 seconds to cook. The business was acquired by Mission Mars in 2017. 

Cosy Club offers ‘free teas for those in need’: Cosy Club, the Loungers-owned concept, has launched an initiative that aims to combat loneliness in a partnership with charity Independent Age. Free Teas For Those In Need will take place from 10am to 11am each Wednesday in the brand’s 25 sites across the UK. Cosy Club managing director Amber Wood said: “There’s no catch to Free Teas For Those In Need, we just believe it’s a nice thing to do and hope everyone passes this on to someone they know or family members who may benefit from meeting new people.” Lucy Harmer, director of services at Independent Age, said: “Free Teas For Those In Need will help bring communities together and, on a practical level, provide our volunteers and the older people we help with a safe, neutral place to meet. Hopefully it will also encourage people of all ages to mix more, with new mums drinking tea alongside older people to help them realise they have more in common than they think.”

Craft beer and whisky demand drives malt firm’s turnover past £200m, investing £51m to increase capacity at two Scottish sites: Essex-headquartered malt company Bairds has seen turnover pass £200m as craft beer and the whisky industry drive increased demand for malt. The company, which operates five production facilities in the UK, is investing £51m to expand capacity at its Arbroath and Inverness sites in response to demand. Bairds saw revenue rise to £209,180,000 for the year ending 30 September 2018, compared with £187,443,000 the previous year. UK and Ireland revenue was up to £184,399,000 compared with £168,705,000 the year before, while sales to the Americas, Europe and the Middle East, and the Asia-Pacific markets were all up. Ebitda was down to £9,888,000, compared with £11,493,000 the previous year. Pre-tax profit fell to £3,115,000 compared with  £4,535,000 the year before, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: “The company experienced an increase in the volume sold in the craft beer sector as brewers increase production to meet market demands. In 2018, the demand for malt volume from the whisky sector was in line with previous year volumes. The prospects for 2019 deliveries are indicating the business will see slightly increased volumes into the craft beer and distilling sectors. In response to the strong growth of the whisky sector and customer demand, the company is investing £51m to expand capacity at its Arbroath and Inverness sites. The investment will add 79,000 tonnes of annual malting capacity by upgrading the Arbroath facility and constructing a malting plant at the Inverness site. Work has started at both sites, with the Arbroath expansion due to be complete by December 2019 and the Inverness project towards the end of 2021.”

Azzurri Group to open third London site for Radio Alice brand, in Canary Wharf next week: Azzurri Group, which owns and operates ASK Italian, Zizzi and Coco di Mama, will open a third London site for its Radio Alice brand, in Canary Wharf next week. The pizzeria will open on Monday (8 July) in Jubilee Place. The sourdough pizza brand was founded by Matteo and Salvatore Aloe, who opened their first pizzeria in Bologna in 2010, and Emma King, co-founder of Gail’s bakery, who together launched Radio Alice in Hoxton Square in 2016, followed by a site in Clapham in 2017. Radio Alice celebrates small-scale Italian producers with pizza toppings featuring regularly changing seasonal ingredients from organic farms. Aloe said: “We are excited by the opportunity to open at Canary Wharf in such a bustling location.” The concept, which is named after a 1970s Italian pirate radio station, was launched by Azzurri Group in 2016.

Bedlam reports revenue up 47% in latest quarter: Sussex-based craft brewer Bedlam, which is currently aiming to raise up to £800,000 on crowdfunding platform Crowdcube to support expansion, has revealed revenue was up 47% year-on-year in its latest quarter. In volume terms, Bedlam said it sold about 168,000 pints between 1 April and 30 June, generating revenue of £169,000. The company, founded in 2011, is offering 14.67% equity as it looks to raise at least £550,000 on Crowdcube, giving the company a pre-money valuation of £3.2m. So far, 108 investors have pledged £351,390 with 17 days remaining. The company has a stretch target of £800,000, which would lead to the equity on offer rising to 20%. Bedlam has put together a four-year plan, which would see further investment in its brewery and expansion of the business. If it achieves the stretch target, it will open a brewery tap in Brighton. In 2016, Bedlam raised £500,000 on Crowdcube, which enabled the company to relocate and build a brewery at the foot of the South Downs, ten miles north of Brighton.

Clive Schlee talks about love for Pret and his own future in exclusive interview: Outgoing Pret A Manger chief executive Clive Schlee has talked about his love for the brand and his own future in an exclusive interview. Schlee talks to Mario C Bauer, AmRest brand ambassador and Curtice Brothers co-founder and WhiteSpace partner, as part of the Curtice Brothers’ “Teddy Talks” series. Schlee also discusses the early years and people focus at Pret. Propel readers have been given access to the 40-minute interview, which can be seen here. Schlee announced this week he would retire as Pret chief executive after 16 years in September, with chief operating officer Pano Christou taking over the reins.

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