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Wed 31st Jul 2019 - Propel Wednesday News Briefing

Story of the Day:

Greggs to trial opening until 9pm, sees growth opportunities around drive-thrus and travel hubs: Food-to-go retailer Greggs is to trial longer opening hours until 9pm at a “number of shops” that will include a new hot food offer, as it looks to make further inroads into the evening market. Chief executive Roger Whiteside also said he sees a “huge opportunity” for the company with openings of drive-thrus and further locations in travel hubs. Greggs is also looking to develop its coffee offer having overtaken Starbucks to become number three in the UK behind Costa and McDonald's. Having reported like-for-likes up 10.5% in its first half and sales up 14.7% to £546m, Greggs has decided to increase investment in strategic initiatives in the second half of 2019 “to help to deliver an even stronger customer proposition and further growth”. This includes developing its offer later in the day and will begin the longer opening hours pilot in the autumn. Speaking at a media conference call, Whiteside said: “Quite a few of our shops are in travel locations that are opening late into the evening. About 90% of our shops close at 6pm and what we want to do is take a number of them – don't ask me the exact number because we aren't saying – as part of an extended pilot and open them until 9pm. They will offer hot food options that are not available in our other shops and we want to see if we can get people coming to Greggs rather than going home and heating up a lasagne in the microwave. It's that business which we are competing for.” Greggs will open its 2,000th store in the next few weeks – the location of which was undisclosed because Whiteside said the company “wanted to make a song and dance about it”. While the company has outlined plans for 2,500 stores in the UK with 100 net new stores annually, Whiteside said he believes there is scope to go beyond that figure, albeit at a slower opening rate. He also revealed the company had managed to secure some excellent rent reductions “where contracts allowed”. Whiteside added: “I don't think there's an end number and we won't disclose a possible figure – we just think the pace will decline when we get to that 2,500 mark because the opportunities will be a bit more limited. We think about 500 of the 2,500 sites will be operated by franchisees. The growth in the food-to-go channel is coming off-premise through delivery and drive-thrus. We're opening our fifth drive-thru this week – at Snetterton, near Norwich – and third in partnership with Euro Garages. We see a huge opportunity here but the problem is because they are new-build, they don't become available very often unlike shop units. Two years ago we weren't interested in that format. Now we are and we're picking them up. Travel hubs are also great – we've just opened a new site at London Bridge and it's been a ‘riot’. We definitely want to open more of these type of locations.” Whiteside said the company was continuing to develop its offer, which he said was helping more people recognise the company as a “food-to-go rather than a bakery brand”. He added one-in-eight of new customers were buying the vegan sausage roll but sales of its meat sausage roll, pastries and “healthy balance” range were also continuing to thrive. He added: “There's still lots we can do, including around our breakfast, hot food and even our coffee offer. We're now number three in the market for coffee without having really done any development such as decaf or other options.” He added he did not see any of its sites going cashless given its low average transaction value meant most customers paid with cash.

Industry News:

Propel launches ground-breaking Operations Directors’ Conference: Propel has launched the Operations Directors’ Conference in which some of the sector’s leading operators will share expertise, ideas and insights into all areas of operations. The full-day event takes place on Wednesday, 25 September at One Moorgate Place in London and is open for bookings. The event, in partnership with Elliotts chief executive Ann Elliott, will see company leaders from across the industry talk about all parts of the operating model, from building and leading an effective operations team to maximising profitability. Speakers will include Soho Coffee Co managing director Penny Manuel, who will talk about the importance of operators in leading a business. Bill’s managing director Sarah Hills will discuss “getting the best out of absolutely everyone”, while Casper & Cole managing director Sam Lee will explain “why the detail matters”. Oakman Inns and Restaurants chief operating officer Dermot King will reveal how to lead an effective operations team in a dynamic world, while Vagabond managing director Stephen Finch will talk about how great operators maximise profitability. Tortilla managing director Richard Morris will look at what makes a great operator, while ETM Group owner Ed Martin will explain the importance of keeping operations at the heart of a business. Pret A Manger’s new chief executive Pano Christou will talk about operating in a fast-paced world, while former Fuller’s managing director Jonathon Swaine will look at the need to keep operations simple, focused and effective. There will also be two panel sessions. Miller & Carter retail operations director Sue Walsh, Pizza Pilgrims operations manager Charlie Warren, Caffe Nero managing director Glyn House, and Frankie & Benny’s managing director Ollie Humphries will discuss building the right operations team while protecting the brand and delivering consistency for guests. Meanwhile Ian Edward, co-founder of Hippo Inns; Peter Kemp-Welch, partner at Piper; and Paul Campbell, founder of Hill Capital Partners, will discuss investing in great operators. Ann Elliott said: “It is wonderful to partner with Propel on this event. We have put together a great line-up of speakers covering all areas of operations.” Propel managing director Paul Charity added: “I am delighted to launch the Operations Directors’ Conference. Effective operations and operators are so important to get the most out of your business and this is an opportunity to learn from some of the best in the sector.” Tickets are £295 plus VAT for Propel Premium subscribers and £345 plus VAT for all others. To book, email or call 01444 817691.

'Wider opportunity beyond premiumisation for operators to drive beer sales': Marston’s head of consumer marketing Louise Fleming has told Propel there is a wider opportunity beyond premiumisation for operators to drive beer sales. Marston's recently launched its latest On-Trade Beer Report, based on independently commissioned research, to help operators across the sector drive beer sales in the year ahead. Fleming said while premiumisation was dramatically impacting the category through consumers drinking less, but “better-quality” beer, there were other avenues that operators needed to tap into. “There's no doubt premiumisation is driving a lot of innovation in new beer products and we are seeing that through what is on offer in pubs, but there are other ways for operators to maximise sales,” Fleming said. “Additionally, we're seeing lots of opportunities around craft beer styles. People are looking for something modern with a bit more flavour. A contemporary style of ale, such as Hobgoblin, will appeal to younger drinkers looking for a beer with more flavour and hops. Within the rest of our portfolio we are seeing a rise in world beer too so operators can tap into this growth by extending their range there as well.” Fleming added while the low and no-alcohol segment was growing, it was still a relatively small part of its brewing production. However, the company recently launched Shipyard Low Tide and Fleming said it continues to monitor the category closely. Fleming said the key to the report was to help operators understand drinkers better in order to sell more beer. She added: “We want to grow our own sales of course but we also want total beer sales to grow. What we can do through the report is help operators get the right brands in their pub. We want them to see Marston's is a trusted, independent source.”

InterContinental becomes hotel brand to remove miniature toiletries in bid to reduce plastic waste: InterContinental Hotels Group (IHG) is to remove miniature toiletries from all its hotels for environmental reasons – making it the first global hotel brand to undertake such a move. The UK-based owner of Holiday Inn and Crowne Plaza hotels has pledged to take the small plastic bottles out of its 843,000 rooms by 2021. The move has already happened in about a third of its estate and is building on its efforts to reduce plastic waste as part of a broader sustainability agenda. Bulk items are replacing the individual toiletries. IHG chief executive Keith Barr said: “We collectively as an industry have to lead where governments are not necessarily giving the leadership to make a difference. Five years ago it was a tick-the-box exercise. Today it's follow-up meetings going through in detail what we are doing about our carbon footprint.” Last year, IHG said it would stop using plastic straws by the end of 2019. Barr added “the next big thing to tackle” would be the plastic plates and cutlery used for its breakfast service. In addition, the company has teamed up with artificial intelligence firm Winnow on a pilot to monitor waste across breakfast buffets in some of its hotels. IHG has committed to reducing its carbon footprint per occupied room by 6% by next year. Its high-end resort brand Six Senses has said it will go plastic-free across its whole supply chain by 2022.

Nottingham sees record number of venues receive Best Bar None accreditation: A record 116 venues within Nottingham city centre have gained accreditation this year for Best Bar None, the Home Office-supported community safety programme operated by pubs and bars in the UK. That beats last year's record figure of 85 and keeps Nottingham as having the largest number of accredited venues in the country under the scheme. To achieve Best Bar None status, venues have to demonstrate they have the correct policies and procedures in place to prove they are safe, responsible and well operated, while also complying with relevant legislation. They are then assessed on areas such as the prevention of crime and disorder; the measures they take to promote responsible drinking; their standards of safety and customer care; how they prevent and deal with public nuisance issues; the measures they have in place to protect children from harm and their approach to community engagement including membership of organisations such as Pub Watch. In Nottingham, the scheme has been run by the city's Business Improvement District (BID) since 2010. Nottingham BID director Andrew Crawford said: “We are delighted a record number of venues in Nottingham city centre have been successful in gaining Best Bar None accreditation. It spells good news for the city as it demonstrates licensed venues take safety seriously.” Mick McDonnell, national Best Bar None co-ordinator added: “When Nottingham Best Bar None hit 85 accredited venues last year it became the biggest scheme in the country. To exceed that by another 31 venues this year is amazing.”

Company News:

Comptoir Group chief financial officer resigns: Comptoir Group, the owner and/or operator of Lebanese and Eastern Mediterranean restaurants, has announced chief financial officer Mark Carrick has resigned. Carrick will remain with the company until the end of October “to ensure an orderly handover of his role and responsibilities”. Comptoir Group said the board has begun a process to identify a successor and a further announcement would be made in due course. Last week, the company announced trading for the 26-weeks to 30 June 2019 “was in line with management expectations and ahead of the same period in 2018”. It operates 25 managed restaurants and four franchise sites. 

Koh Thai appoints Sykes as group COO: Koh Thai, the tapas chain, has appointed Jeremy Sykes, formerly of Wagamama and Boston Tea Party, as its new group chief operating officer, Propel has learned. Sykes, who has been a business consultant for the past three years, spent almost 15 years at Wagamama as a regional director. He also spent just under 18 months as director of operations at Boston Tea Party. He joins up again with former Wagamama chief executive Steve Hill at Koh Thai. Established in 2009 in Bournemouth, Koh Thai currently operates 12 restaurants across Dorset, Wiltshire, Somerset and Hampshire. Last year, Buenos Aires Restaurant Holdings, announced a share merger with High Road Restaurants Group BidCo, owner of Koh Thai, to form a multi-branded restaurant group.

Inn Collection Group reveals plans for new-build Sunderland seafront site: The Inn Collection Group, which is backed by Alchemy Partners, has revealed plans for a 40-bedroom new-build inn on Sunderland seafront. The group has agreed terms with the city council’s development company to purchase an unused site for a three-storey venue in Seaburn, with plans expected to go before the authority's planning committee shortly. The Inn Collection Group’s managing director Sean Donkin said: “We are delighted to have secured a prime seafront site in Sunderland at an exciting time for the city as it gears up its coastal regeneration plans. Seaside towns and cities are riding high on the renaissance tide across the UK. There is real opportunity and optimism here in Sunderland to create a seaside destination of choice, and we look forward to being a part of the journey.” Sunderland City Council leader Cllr Graeme Miller added: “This additional accommodation will complement the Grand Hotel and Roker Hotel, and will contribute to the vibrant seafront location we know Seaburn can be. We are delighted The Inn Collection Group recognises the vast potential of the area.” The proposed development accompanies new strategic direction from The Inn Collection Group to develop a completely freehold estate as it continues to roll out “buy and build” growth plans, to more than double its ten-strong portfolio of pubs with rooms by 2022. The group will continue to seek out new development opportunities in the Lake District and Yorkshire as well as within its north east England heartland. If given the go-ahead, construction work is expected to start by the end of the year and open by December 2020. The new-build inn is part of a £1.5bn city-wide investment programme that will see the seaside, city centre and residential areas of Sunderland transformed through council-driven development projects.

Leon lines up third US opening: Natural fast food brand Leon has secured its second US site. The company, which is currently on site with its second US opening in New York Avenue, has secured a further site in Washington DC, Propel has learned. The group, which made its debut in the US last year in L Street, has secured a site at 1350 I Street. On its launch in the US, Leon mooted that it would look to open up to 20 more sites within the next three years. The company is further strengthening its presence in London, with a pair of openings, in Wimbledon and on the South Bank over the summer. The company, which last month signed a five-year exclusivity agreement with motorway services operator Roadchef, will open new sites at Southbank Place and in Wimbledon Hill Road. Earlier this year, Propel reported up to 20 new restaurants are planned over its current financial year – more than half of them overseas. In the UK, this will include a restaurant in Leeds.

Admiral Taverns appoints head of property: Admiral Taverns has appointed Andrew Hallam as head of property. Hallam, who has more than 25 years’ industry experience, was previously a director at Hallam Project & Property Consultancy. Prior to that he has held senior positions in the property team at Mitchells & Butlers and more recently led the property team at Tesco, where he was responsible for property development and acquisitions within its hospitality division. Hallam will report to Admiral Taverns property and strategy director Andy Clifford. The company has made a series of recent investments in its property division, underpinning the group’s ambitious growth and investment plans for its estate of circa 800 community pubs. Alongside Hallam these have also included further additions to the group’s surveying team, which saw regional surveyors Sally Sheil and Phil Hoddinott recently join. Clifford said: “Andrew brings with him a great breadth of leisure and consumer retail property expertise, which will be invaluable as we continue to deliver on our ambitious investment programme for our estate, which has seen us invest more than £8m in our last financial year and more than £25m over the past three years.” Hallam added: “Having spent more than ten years working alongside managed pubs and restaurants I’m really looking forward to working in the tenanted sector, helping the team to champion sustainable community pubs and the licensees behind them.”

Soho House set to head to Rome: Membership club Soho House is set to head to Rome. Private investment firm Cain International is to provide a €120m development bond to Italian development firm Barletta Group to support the expansion of the Soho House and Rosewood Hotels brands in the Italian market. The facility has an initial 42-month term, reports Property Funds World. Soho House Rome is to be developed on a site currently owned by Barletta Group in the heart of San Lorenzo. The site will comprise a 32-bedroom hotel, 40 serviced apartments, two restaurants and a Cowshed spa. It is due to be completed in 2020. Soho House is also due to open a site in Milan next year. Barletta Group has also agreed the acquisition of the Palazzo Dona’ Giovannelli, a 14th century residential property, in the Cannaregio district of Venice. This will be converted into a 46-bedroom five-star hotel under a management agreement with Rosewood Hotels. Due to complete in late 2021, this will be the second Rosewood Hotel in Italy.

Greene King disposes of Nottingham pub: Brewer and retailer Greene King has sold The Crown in Nottingham. The pub, located at the junction of Middleton Boulevard, Western Boulevard and Wollaton Road – known locally as Crown Island – has been acquired by a local investment company in a deal brokered by agent Everard Cole. The new owner intends to continue operating the pub and has retained the Greene King tenants. Believed to date to the 1930s, the ground floor of the two-storey property features an open plan trading area, with a large central bar servery, split into various areas and has seating for about 130 people in total. There is accommodation on the first floor and a large beer garden at the front of the building. Everard Cole director Jon Heald said: “The pub courted a tremendous amount of interest and we received numerous offers. Historically, the pub has traded very well and it’s encouraging to see the pub is set to continue and not developed into some alternative use.”

Indian restaurant operator opens third site as he doubles up in Tiverton: Tiverton-based Indian restaurant operator Maroof Ahmed has opened his third site after doubling up in the Devon town. Ahmed has launched Nawab in Bridge Street in a premises formerly occupied by restaurant Ma Karm Thai. He decided to open a second site in Tiverton because his other restaurant – The Ganges in Bampton Street – was “very busy”. He told Devon Live: “It is exciting to have a second location in the town. Nawab offers a more modern Indian menu than The Ganges – seafood and lamb chops for example.” Ahmed also operates the Royal Spice in New Milton, Hampshire.

Tattu reveals further details for forthcoming Edinburgh restaurant: Contemporary Chinese restaurant group Tattu has revealed further details about its forthcoming Edinburgh site – its fourth to date. Opening in October the 140-cover split-level restaurant will occupy the ground and basement level of the newly refurbished Mint Building in West Register Street. Tattu Edinburgh will pay homage to the relationship between “traditional and contemporary”; complete with a Chinois-style interior that features antique furnishings partnered with polished marble walls and reflective finishes. As well as its signature dishes, the Edinburgh menu will also include a number of exclusive plates, including dedicated tempura and raw sections. Tattu managing director Adam Jones said: “As a cosmopolitan city where ‘traditional meets contemporary’, Edinburgh completely resonates with Tattu and the kind of unique experience we want to create for our diners.” Earlier this month, Propel revealed Tattu has started working with Clearwater International on options that could include bringing in a strategic partner to help it with plans for expansion in the UK and overseas, with the US a possible destination. Tattu currently operates restaurants in Manchester, Leeds and Birmingham.

Crazy golf operator Caddies gets go-ahead for second site, in Derby: Crazy golf operator Caddies has been given the go-ahead to open its second site, in Derby. The concept was launched in Southend in May last year. Now Caddies has secured permission from Derby City Council to convert the former Sports Direct store in St Peter's Street, reports Insider Media. A statement submitted to the council on behalf of the applicant said: “The unit is currently vacant with an unappealing and oppressive frontage and the building is unutilised and adds nothing to the vibrancy of the area. The proposal represents a sustainable city centre enterprise that will provide economic investment, job creation and an innovative leisure establishment that attracts a wide and diverse clientele.”

Center Parcs to extend apprenticeship programme: Holiday park operator Center Parcs is extending its apprenticeship programme to have at least 150 apprentices across the business in 2020. It comes as Center Parcs marked its first apprenticeship graduation, which saw 92% of the graduates achieve a distinction or merit. A total of 36 apprentices graduated at Center Parcs Sherwood Forest with a Level 3 team leader apprenticeship, alongside an Institute of Leadership & Management Level 3 diploma in management. A total of 20% of the apprentices have either been promoted, or moved roles as a result of their new skillset. Center Parcs has been working with HIT Training since 2017 to run the Level 3 team leader apprenticeship standard. Center Parcs performance and development manager Tracey Anderson said: “We are so proud to be growing our own talent, and the results of this apprenticeship course speak for themselves. We now have 36 incredible individuals working across the business who can inspire and tutor others with what they have learnt after 18 months of tailor-made training.” HIT Training managing director Jill Whittaker added: “We are committed to delivering inspirational training across the hospitality sector and I am excited to announce the partnership with Center Parcs will continue in 2020, with at least 150 apprentices being in place across the business.”

Diageo reveals location of new global headquarters in London: Diageo is moving its global headquarters from London's Park Royal to Soho, nearly halving the space its 900 employees occupy. The company will move to 16 Great Marlborough Street in spring 2021 when its current lease expires. The business plans to create a “more agile working environment” for its staff in its new city centre headquarters. This will cover 105,000 square foot, compared with its current 200,000 square foot of space. Ahead of Diageo’s move, the building will be completely refurbished with its staff included in the design process. As well as office space, the new building will contain a customer collaboration centre and a “brand experience”. It will also include a retail space open to the public, selling the company's brands. Diageo chief executive Mairéad Nayager said: “We are excited to be bringing our people together at last under one roof and closer to our consumers. We intend to create a world-leading workspace for them, designed to meet the needs of Diageo today and in the future. Our new headquarters will provide the most inclusive of working environments for all of our people and enable us to retain and attract the best talent in the future.” JLL advised Diageo while the landlord, Lazari Investments, was advised by Knight Frank and CBRE.

Five Guys to open Bromley site next month: Better burger brand Five Guys will open a site in Bromley, south west London, next month. The company will open the venue at a former Argos store in Market Square on Monday, 5 August, reports MyLondon. It is one of a series of openings planned by Five Guys with sites in Cambridge, Plymouth and Worcester among those lined up. The company is also thought to be in negotiations on two more central London sites. Earlier this month, Five Guys JV, the UK joint venture between Sir Charles Dunstone and Five Guys founders Janie and Jerry Murrell and their three sons, reported turnover rose 23% to £149.6m in the year to 28 December 2018.

UK-registered food delivery startup acquires Ukrainian counterpart: Menu Group, a UK-registered food delivery startup operating in Armenia, Georgia, and Belarus, has completed the acquisition of Ukrainian counterpart The deal will see Menu Group enter the Ukrainian market and provides it with access to's business operations in the country, which covers 29 cities and more than 1,500 restaurants. Following the acquisition, Menu Group plans to integrate its own logistics system with to's. In the next year, Menu Group will deliver food in at least five Ukrainian cities using a hybrid business model, combining a market place and its own delivery chain. First launched in Armenia in 2012, Menu Group has raised $6m from angel and early-stage investors. Additionally, Menu Group is on track to raise $10m towards launching operations in Kazakhstan and other countries in the region.

Everards launches first phase of food, drink and leisure development: Leicestershire-based brewer and retailer Everards has launched the first phase of its food, drink and leisure development. Everards Meadows in Leicester is opposite Fosse Shopping Park and features 70 acres of green space, Rutland Cycling store and a second site for coffee shop Jenno’s. The next phase, which is under way, will see Everards’ new headquarters, brewery and beer hall built along with further retail, food and drink phases. Work is due to complete next summer.

Mowgli gears up for Cardiff and Leicester openings: Indian street food concept Mowgli, which is backed by Foresight Group, is gearing up for two openings. Founder Nisha Katona will open a site in Church Street in Cardiff this week followed by Leicester's St Martins in mid-August. Mowgli operates two sites in its home city of Liverpool and two in Manchester, alongside restaurants in Birmingham, Nottingham, Oxford and Sheffield. Katona is also set to open a venue in Bristol in October after acquiring the PizzaExpress restaurant in Corn Street while an outlet in Preston is also in the pipeline.

Lake District hotel and restaurant goes on market for £1m: A Lake District hotel and restaurant has gone on the market for £1m. Geoff and Debra Armstrong are selling Westlakes Hotel & Restaurant in Gosforth through agent Christie & Co. The property, which occupies a Georgian property built in about 1830, features ten bedrooms as well as a dining room for up to 28 people, including non-residents. There is also a residents’ lounge and bar, dedicated conference room hosting up to 28 delegates, plus outdoor seating for a further 42 people. Debra Armstrong said: “We bought this hotel 14 years ago for a change in lifestyle. The conference room has been an excellent addition to the business and brought a different stream of business during the day, which has worked very well.”

North east-based operators get go-ahead to open second Italian restaurant: North east-based operators Arben and Kushtrim Gegaj have been given the go-ahead to open a second site for their Italian restaurant Due Fratelli. They have been granted a premises licence by Newcastle City Council for the former Orion bingo hall in Westerhope. The building in Stamfordham Road, which was also previously a cinema, will now be converted into a restaurant, reports Chronicle Live. The Gegajs have owned and operated Due Fratelli in Newbiggin-by-the-Sea since 2012.

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