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Morning Briefing for pub, restaurant and food wervice operators

Thu 8th Aug 2019 - Propel Thursday News Briefing

Story of the Day:

Deliveroo launches rescue team to keep struggling restaurants trading: Deliveroo has set up a new team that will focus on identifying restaurants in need of support – offering them a place in a local Editions delivery-only kitchen in order to keep them trading. The “restaurant rescue team” will look for restaurants that are at risk of closing, or have closed, which would be able to continue trading with support from a Deliveroo Editions kitchen. For a limited period, the restaurants entering Editions through the rescue team will also receive support that is not available to other restaurants on the platform. The selected restaurants will enjoy preferential commission rates, and Deliveroo will cover the costs of rent, equipment, maintenance, utilities, food safety setup and audit costs. Deliveroo will focus its efforts initially in London and then expand to other areas of the UK. The company said it was committed to supporting the industry at a time when the economic challenges of recent years have put a strain on restaurant finances, from rising business rates to increased food and labour costs. Deliveroo said its Edition sites have already helped a number of restaurants survive. After moving to the UK from Lebanon and working in the restaurant sector, Fadi Chafe founded Waleema – a modern Lebanese restaurant. However, the costs of running a bricks and mortar restaurant meant it had to close. Waleema subsequently moved to Deliveroo Editions and has since expanded to multiple locations – including Deliveroo’s Whitechapel and Battersea Editions sites. Meanwhile, Chinese restaurant The Good Earth had to close its West Hampstead site of more than 20 years despite strong sales due to the ongoing challenges hitting the industry. It was the brand's first outlet to shut in its 40-year history. However, The Good Earth has maintained its presence in the area by switching to the Editions site in nearby Swiss Cottage, allowing some jobs to be saved. 

Industry News:

Operators invited to take part in haysmacintyre’s benchmarking survey, biggest in sector: Operators are invited to take part in the sixth annual haysmacintyre UK Hospitality Index. The index, for multi-site pub, restaurant and foodservice operators, is the sector’s biggest benchmarking survey, with more than 110 companies taking part last year. Covering trading, staffing, trends, capital and funding, and property, the index will deliver quality financial data and benchmarking intelligence to help hospitality businesses understand their sector’s key metrics and how they compare and can improve operations. To complete the survey and receive the final report, click here. The survey closes on Thursday, 22 August and information provided will be reproduced anonymously in this year’s Index. Data and comments will not be attributed to respondents unless permitted.

James Hacon to look at future viability of the food hall model in latest Premium column: James Hacon, managing director of Think Hospitality, will look at the future viability of the food hall model as part of the latest opinion piece, which will be sent to Propel Premium subscribers on Friday (9 August) at 5pm. Jon Midmer, of global executive search firm JMA, will explore the value of escapes and escapism, and the role hospitality plays; while Propel insights editor Mark Wingett will look at what the end of the Giggling Squid sales process means for the wider sector. Subscribers can also read about the latest industry whispers in Premium Diary. 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

BGF boss – venture capital business model does not work: Stephen Welton, who runs BGF, has questioned the business model of Britain’s venture capital firms. The total amount of venture capital money invested in Britain rose 37% to £4.4bn over the first six months of this year, according to KPMG. However, venture capitalists are shying away from investing in early-stage UK startups in favour of placing bigger, fewer bets on scale-ups. However, Welton, who runs Britain’s most active scale-up investor, with multiple investments in the leisure sector such as Mission Mars, Giggling Squid and Coaching Inn Group, said the venture capital model is flawed because it relies on identifying potential unicorns – companies that will eventually be worth $1bn or more – to offset losses made by other investments. BGF’s own approach is to spread its money thinner, making multiple investments across about 50 companies each year. Welton said: “The venture capital industry doesn’t work in my view. The venture capital industry is all based on looking for a unicorn. Some will find them, but the vast majority will not. Venture capital as an asset class over a long period of time has shown some exceptional returns at the very top and then some poor-to-mediocre returns. If you look at the venture industry, if I had to make ten bets and I thought five or six of them are going to fail, which is the working model, you really do need that one out of ten that’s going to provide exceptional returns. The vast majority haven't.” To date, BGF has invested more than £2bn in more than 285 companies, making it the most active investor in the UK as well as globally by number of transactions. BGF was launched in 2011 in the wake of the financial crisis, as funding for scale-ups dried up. 

Intu tests direct retailing at Nottingham coffee shop: Shopping centre owner Intu is creating its own community-based stores as it looks to breathe new life into the high street and give a fresh boost to independent retailers. It is testing the move to direct retailing with the launch of The Birdhouse Cafe – a coffee shop in Nottingham’s Intu Broadmarsh that promotes a number of local businesses. The concept is planned for more of Intu’s shopping centres as part of its five-year transformation strategy. Each venture will operate as a standalone, rent-paying tenant, led by a retail specialist and run in partnership with local suppliers. The Birdhouse Café works with Nottingham-based coffee roaster 200 Degrees, Ugly Bread Bakery and soft drink company Belvoir, and also provides retail and events space to other small and startup brands. Trevor Pereira, commercial director at Intu, said: “We wanted to test whether a landlord can make this kind of move into direct retailing and explore the benefits it would provide our visitors, existing brands and the wider community. It was important to us the new business we created would operate as a standalone venture with its own team that would have to face the same challenges as any other retailer, so that we could really test the concept. We’re seeing some strong, early successes for the Birdhouse Cafe in Nottingham. Our ambition is to grow this concept at other Intu destinations across the UK as part of our new strategy to transform our centres and nurture the best brands. We think this has the potential to show how small and independent businesses can thrive alongside international names to create the best possible retail and leisure experience.” 200 Degrees coffee solutions consultant Tim Moss added: “Our roots are in Nottingham and we think what Intu and the Birdhouse Café is doing for the independent business scene here is fantastic. Initiatives like this could make a real difference for startup brands looking to establish a high-street presence for the first time.” 

UK food industry again asks government for Brexit no-deal waivers: The UK food industry has again asked the government to waive aspects of competition law to allow firms to co-ordinate and direct supplies with each other after a no-deal Brexit. The Food and Drink Federation (FDF) said it has repeatedly asked ministers for clarity on a no-deal scenario. Existing rules prohibit suppliers and retailers discussing supply or pricing. The industry said leaving in the autumn could pose more supply problems than the original Brexit date last March. The FDF, which represents a wide range of food companies and trade associations, said: “We asked for these reassurances at the end of last year but we're still waiting.” FDF chief operating officer Tim Rycroft added: “In the event of no-deal disruption, if the government wants the food supply chain to work together to tackle likely shortages – to decide where to prioritise shipments – it will have to provide cast-iron written reassurances competition law will not be strictly applied to those discussions.”

Licensing update: Licensing solicitor John Gaunt & Partners produces a useful monthly summary of topical issues and the latest can be accessed here. This edition includes a reminder to operators to be extra vigilant and robustly implement age verification systems during the upcoming school exam results season.

Company News:

McDonald's loses claim for exclusive rights to ‘Mc’ prefix: McDonald's has lost its exclusive claim to the “Mc” trademark on some of its food products within the EU after a dispute with an Irish fast food chain. Supermac's, which owns more than 100 fast food restaurants in Ireland, complained to the European Union Intellectual Property Office (EUIPO). The EUIPO ruled McDonald's had not proved genuine use of the “Mc” prefix on some of the products it trademarked. However, the EUIPO upheld McDonald's rights to own the “Mc” trademark on chicken nuggets and some of its sandwich products. The ruling also stated since both firms had succeeded in some parts of the case and failed on others, each party must pay its own costs. Supermac's was founded by Galway businessman Pat McDonagh in 1978 and is now the largest Irish-owned fast food restaurant firm in the Republic of Ireland. McDonagh claimed the latest ruling was a “victory for small businesses”. “The ‘Mc’ is back,” he said in a company statement. “McDonald's tried to argue because it had some products that started with ‘Mc’, the term ‘Mc’ was so synonymous with it, so it had the right to own and trademark ‘Mc’. We are delighted the EUIPO found in our favour and we can now say we have rid Europe of the McDonald's self-styled monopoly of the term ‘Mc’.” However, a statement from McDonald's pointed out the EUIPO ruling had reinforced its ownership of the ‘Mc’ trademark on a selection of its fast food products.

Award-winning multiple operator eyes growth to five sites: Award-winning multiple operator Dianne Irving is eyeing growth to five sites after taking on her third venue – and second with Heineken-owned Star Pubs & Bars. Irving has co-invested £330,000 with the pub company in The Howard Arms in Carlisle. The pub now commemorates the period from 1916 to 1972 when the government took Carlisle’s pubs into state management in a bid to curb excessive drinking in the city. Everything in the pub from the menu to the furniture harks back to the early days of that time and has a 1920s feel. The idea was the brainchild of Irving, who has two other pubs in the area, including the White Mare at Beckermet, which is also with Star Pubs & Bars. She said: “It’s a fascinating and little known part of pub history that changed the face of Carlisle’s pubs. Civil servants ran all pubs following strict rules; beer’s alcoholic content was reduced, food and activities introduced, coffee and cakes stocked and women encouraged to visit. As one of the last remaining traditional pubs in the city centre I thought it would be fun to recreate those days and give The Howard Arms a point of difference as a place of historical interest.” The menu offers traditional home-cooked British. The activities have a 1920s theme, with games such as cribbage and skittles as well as a piano for sing-alongs. Irving added: “I approached Star with the idea and it loved it. We’ve taken The Howard Arms back to the 1920s but we’re also serving modern ‘essentials’ such as prosecco and barista-quality coffee.” Irving is now looking to expand further with a view to having five leased pubs in and around Carlisle. She added: “Having lived in the area for the past 30 years, I’ve got a good local knowledge that helps identify strong pub business opportunities. Leased is the way to go as far as I’m concerned as I don’t want to put capital into a freehold.”

Pret A Manger secures third Philadelphia site as it pursues rapid expansion in city: Pret A Manger has secured a deal to occupy the ground-floor retail space at the Graham building office tower near City Hall in Philadelphia. Pret has signed a lease for a 1,780 square foot store at the 30 S 15th Street building, which it hopes to open by the end of the year, Jacob Cooper, a partner with MSC Retail, said in an email. The company, which already has locations at 30th Street Station and the University of Pennsylvania campus, “is aggressively pursuing expansion in the city”, said Cooper, who represented the chain in the deal. Most of Pret's US shops are in New York, Chicago and Washington. At the Graham building, it will replace Parliament Espresso and Coffee Bar, owned by Constellation Catering.

Five Guys lines up further UK openings: Better burger brand Five Guys has added further sites to its UK openings pipeline, as it remains on track to open 15 sites this calendar year. The company, which recently opened in Bromley and in London’s Portobello Road, has lined up openings in the Ashford Designer Village and in Resorts World Birmingham for before the end of the year. It is currently on site in the Drake’s Circus scheme in Plymouth. It also has sites secured in Market Street, Cambridge; Gloucester Quays; and Cathedral Square, Worcester. The company is also thought to be in negotiations on three more central London sites. Earlier this summer, 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.

Domino's spends £7m stockpiling pizza toppings in case of no-deal Brexit: Domino's has spent £7m stockpiling pizza toppings, including tomato sauce and frozen chicken, in case a no-deal Brexit disrupts supplies. The company revealed it had conducted a “£7m increase in inventory levels for Brexit planning” on imported ingredients including tuna and pineapple. It has had to buy extra tomato sauce because this is imported from Portugal – unlike the flour and cheese used in its pizza bases, reports The Daily Mail. Domino's Pizza revealed in its interim results its net debt, which rose to £238.8m from £182.1m the previous year, had been impacted due to “Brexit-related stock building”. It added: “A potential no-deal Brexit carries the increased risk of disruption to raw material supplies into the UK and foreign exchange volatility that could increase food costs.”

Camile Thai Kitchen to ramp UK presence: Dublin-based healthy food delivery company Camile Thai is to further ramp up its presence in the UK, with two openings. The company, which currently runs 25 sites in the UK and Ireland, will take its estate of sites in London to five with an opening in Islington. It will also open a site in Croydon, at Boxpark. Daniel Greene, marketing manager at Camile Thai Kitchen, said: “The new branches will be firstly a delivery-only outlet, in partnership with Deliveroo, in Roman Way, Islington, and secondly a dine-in and home delivery outlet in Boxpark. Camile is continuing to grow in south London primarily, where existing locations in Battersea, Clapham, Tooting Bec and Bermondsey are performing well.” 

50,000 people petition Starbucks over extra charge for non-dairy milk: A petition by the People for the Ethical Treatment of Animals (PETA) is asking Starbucks, which has 988 stores in the UK alone, to ditch a charge for vegan milk. The animal rights group said in light of the fact so many consumers are choosing coconut over cow’s milk for environmental, animal welfare and health concerns, it’s time for Starbucks to rethink its approach to costing. “Starbucks should be encouraging customers to choose animal-friendly, vegan milks rather than cow’s milk,” PETA said, citing other coffee houses that offer alternative milks for free. The petition, which currently has 49,194 signatories, states: “I love Starbucks and frequent the chain to order coffee with either coconut, soy, or almond milk. But I’m disappointed I continue to be charged extra for ordering dairy-free milk in my drink. Customers shouldn’t have to pay more for choosing a healthy, animal- and environmentally friendly option. By charging an additional fee for vegan milks, Starbucks is likely deterring some people from trying them in their drinks. Everyone should be able to order non-dairy milk at no extra charge. A massive chain such as Starbucks can afford to offer vegan milk without tacking on a surcharge, and I hope you’ll consider making this move to ‘earn points’ and not only keep customers who already order dairy-free milk coming back but also encourage others to make healthier, more compassionate choices.” PETA said Costa Coffee no longer charge extra, despite doing so when it first introduced alternative milks on its menu last year.

L’Atelier de Joël Robuchon to return under new guise, in Mayfair: London restaurant L’Atelier de Joël Robuchon is to make a return under a new guise – and evolved concept – in Mayfair. Following the death of Joël Robuchon in August last year, L’Atelier de Joël Robuchon shut this year. Now it is reappearing this autumn under a new format at the Clarges Street development. Le Deli Robuchon is launching on the ground floor with Le Comptoir Robuchon above, reports Hot Dinners. Former Chiltern Firehouse restaurant manager Jacob Willemsen will look after Le Deli, while Martin Renshaw, general manager at Hide, will be in charge of Le Comptoir. The food is being billed as “a tribute to the world of Joel Robuchon”, using recipes and dishes from his chefs around the world. At Le Comptoir, dishes will include “The best of London” such as seared foie gras with Granny Smith apple and hibiscus, and “The best of the world” featuring beef and foie gras burger, aromatic sauce and pickled shallots.

Vita Mojo makes international debut: Vita Mojo, the healthy quick service concept backed by Elior Group, has launched its first site overseas, in Spain. The site is located inside the Basque Culinary Center, San Sebastian. The concept, which operates four sites in London and is known for offering personalised meals to customers, has set up a site in LABe, a “digital gastronomy” lab inside the culinary centre. The company said: “LABe is an experimental space, or living lab of gastronomical innovation. It has been designed to bring together technology and people in a multi-disciplinary approach to really explore the future of food and the role of digitalisation and technology within that space. Among other draws, there is a 360-degree experiential dining room where your senses will be tingled with taste, visuals, sounds and smells – and of course a Vita Mojo, where you can grab something to take away or eat in, overlooking the city.” Earlier this year, the company began further rolling out its new cloud-based operating system. The company developed Vita Mojo Operating System at its cashier-less and digital-only restaurants. It has since implemented it across other brands, including healthy Asian takeaway concept Wokit, and recently started working with Chilango.

Subway partners with Beyond Meat to test plant-based options: Subway has partnered with Beyond Meat to test plant-based options. From next month, Subway will pilot the Beyond Meatball Marinara sub in 685 restaurants in Canada and the US for a limited time. The partnership will bring together dedicated culinary teams from both brands to explore new plant-based protein offerings. The Beyond Meatball Marinara takes its inspiration from the brand's classic sandwich but with a plant-based twist – featuring the first Beyond Meatball, created just for Subway. Len Van Popering, Subway chief brand and innovation officer, said: “Our guests want to feel good about what they eat and they also want to indulge in new flavours – with our new plant-based Beyond Meatball Marinara sub we are giving them the best of both worlds.” Ethan Brown, Beyond Meat founder and chief executive, added: “We're excited to partner with Subway to deliver plant-based proteins to their guests. We look forward to a long-term partnership.” 

Sydney-based chef to open central London cafe: Sydney-based chef Damian Monley is to open a cafe in central London. Monley, the former owner of the Flat White Cafe in Sydney and Madame Char Char in Surry Hills, is launching Liv in Belgravia. The all-day venue will open in Holbein Place next month in the premises previously occupied by Como Lario. Lunch dishes will include 17-hour Wagyu beef brisket with Japanese slaw; and crispy salt and pepper chicken in a soft roll with kimchi slaw and sweet soy mayo. Liv plans to open for dinner later in the year, reports Hot Dinners. Coffee will be a key part of the drinks menu overseen by an in-house Italian coffee expert, and regular guest roasts from brands such as Alchemy and Dark Arts Coffee. Downstairs, fresh, cold-pressed juices will be served at a bar along with cocktails and wine.

Cirque Le Soir team to open second site this month, in Manchester: The team behind London's Cirque Le Soir is opening a second site this month, in Manchester. Cirque will take over the former Press Club site in Queen Street, which was most recently home to Toy Box. Bosses said they are transforming it into a “club beyond imagination”, with a mini-funfair inside and a new performance stage in the former bar area. Operations director John Common told the Manchester Evening News: “We’ve been planning to open our new concept Cirque for some time. Manchester is an amazing city with buzzing nightlife – it’s the perfect fit for our brand and culture. So when we found the perfect space, we decided to bring the circus to town. The new club is a take on our London venue, with circus-style performances and a truly immersive nightclub experience.” Cirque Le Soir was founded in Soho by entrepreneur Ryan Bish ten years ago. Cirque Manchester will open on Sunday, 25 August. 

Fledgling escape room business gets go-ahead for first site: Fledgling escape room business Escape Stations has been given the go-ahead to open its first site, in Nottingham. Escape Stations has been granted permission by the city council to open the venue in the basement of Gothic House in Barker Gate. The space was formerly used as a restaurant, reports Insider Media. Escape Stations was incorporated at Companies House in January by Thomas and Elizabeth Armstrong.

End of an era as Stonegate close Nottingham Yates's to convert into Slug and Lettuce: Stonegate Pub Company has closed the Yates's site in Nottingham, which has traded for 90 years, to convert it into a Slug and Lettuce. There' is already a Slug and Lettuce at The Cornerhouse in Nottingham, but the new site in Long Row will feature the brand's “new style” with birdcage booths and neon signs. It is due to open on Monday, 9 September. The rebrand brings 90 years of Yates's in the city centre to an end. The Talbot, which opened in 1876, was sold at auction in 1929 to Yates Wine Lodge. Upstairs, the 900-capacity pub will have more of a restaurant feel. Bo Cranson, area sales manager at Stonegate, said: “There are going to be more booths upstairs and downstairs and the decor will be completely different. It's the new-style Slug and Lettuce – like Leeds, Sheffield and Milton Keynes.”

Caffe Nero opens site at University of Warwick sports hub: Caffe Nero has opened a site at the sports and wellness hub at the University of Warwick. It comes as part of a wider retail strategy to bring more high-street brands to the university's campus. The hub opened in April and is part of a £49m project to create a world-class sports facility in Coventry and Warwickshire. Glyn House, UK managing director at Caffe Nero, told Insider Media: “Caffe Nero was founded on the principle of being a place in the community where people could come together in a welcoming friendly and accepting environment, and that’s exactly what the university was looking to create with us.” Lisa Dodd-Mayne, director of sport and active communities at the university, said: “It was important to us we had a coffee chain that was passionate about providing a premium experience for customers during their visit to the sports and wellness hub, and Caffe Nero ticked that key box. We want as many people as possible to be able to use the facilities and having a cafe of this stature is an important part in fulfilling this objective.”

Levy UK introduces new plant-based menu in partnership with Matt Pritchard: Catering company Levy UK has introduced a new plant-based menu after partnering with “Dirty Vegan” television chef Matt Pritchard. The agreement will see Pritchard deliver the plant-based menu, called Dirty V, at Cardiff City Football Club this month before being rolled out across other Levy UK venues. Following workshops with Pritchard and Levy’s culinary team, the Dirty V menu will be available across retail concessions within the stadium and feature seitan kebabs as well as dirty fries and bean burgers with southern slaw and avocado. Jonathan Davies, managing director at Levy UK, said: “Matt Pritchard and Dirty V is an exciting catering prospect for our business and the opportunity to deliver something new that challenges traditional formats is what Levy UK is all about.” Pritchard added: “Levy UK is turning around the standard of food served at sporting and entertainment venues, and recognises the plant-based movement is no passing trend.”

Nando's extends free food offer to GCSE students: Nando's is extending its free food reward for students to GCSE pupils. A spokesman said: “Nando’s, having been a shoulder to cry on, and a friend to celebrate with for many in previous years, is again offering our free peri-peri to A-Level students this results day. But that’s not all. For the first time, due to popular demand, GCSE students can get in on the action, too. Nando’s will be giving away a free firestarter or quarter chicken to any student who brings in their results this August.”

The Alchemist to launch Burning Man-inspired charity initiative: The Alchemist, the 16-strong Simon Potts-led bar and restaurant concept, is to put a charitable spin on the idea of a mutually beneficial exchange to help raise awareness for a nationwide issue close to the business' heart – food poverty. Teaming up with local charities based near its sites across the UK and inspired by US event Burning Man’s theme of gifting, The Alchemist will for one day – on Thursday, 29 August – encourage donations to local food banks by offering customers a cocktail in exchange for one non-perishable food item. One cocktail will be given for every customer that donates a food item to The Alchemist, but larger donations will be accepted and encouraged. Once donated, the food items will then be taken to a designated local charity and made available to those in need. The company’s sites will accept any tinned, dried and packaged foods throughout the day, as long as they are in date, and unopened. The Alchemist has partnered with Foodinate, a charity that works to end food poverty by running a “meal for a meal” initiative, since last May. To date, The Alchemist has provided 33,000 meals for the initiative. Hannah Plumb, head of Restaurants at The Alchemist, said: “This activity is a fun and engaging way to encourage customers to donate to their local food banks, who are in need of donations now more than ever.”

Zonal hires M&B service transition head as group product director: Hospitality management solutions company Zonal has strengthened its senior management team with the appointment of Alison Vasey to the newly created role of group product director. Vasey has joined from Mitchells & Butlers, where she worked for eight years, latterly as head of service transition. She will take responsibility for the strategic direction and definition of Zonal’s product range across the group. Vasey said: “Zonal has an impressive range of business products that support both operator and customer journeys and I look forward to working with its customers and research and development teams to create new solutions that will benefit the sector for decades to come.” Zonal chief operating officer Peter Edwards added: “Working closely with our customers, Alison is a key appointment in a role that will lead our product strategy and tactics, defining what gets developed and when.” 

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