Propel Morning Briefing Mast HeadAccess Banner  
Propel Morning Briefing Mast Head Paul's Twitter Link Paul's Twitter Link

Navitas Banner
Morning Briefing for pub, restaurant and food wervice operators

Mon 12th Aug 2019 - Propel Monday News Briefing

Story of the Day:

Sector like-for-likes up 1.2% in July but restaurant groups see more closures than openings: Britain’s managed pub and restaurant groups saw collective like-for-like sales grow 1.2% in July against the same time last year, according to the latest Coffer Peach Business Tracker. Restaurant groups saw like-for-likes up 3.8% against last year, when hot weather and the Fifa World Cup hit trading. However, they registered more closures than openings during the month. Meanwhile, managed pubs, which had a bumper time in 2018 because of the tournament and sunny weather, saw sales slip back as expected, but by just 0.2%. Regionally, trading outside of the M25 was slightly better than in London, up 1.3% against 1.0%. Restaurants had a better time outside the capital, up 4.3% against 2.4%, while pubs held up better in London, with like-for-like growth of 0.1% against a 0.3% decline outside. “Considering the barnstorming July pubs had last year, holding relatively steady this July will be seen as a good performance, and restaurant groups will be more than relieved with their sales recovery,” said Karl Chessell, director of CGA, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM. “Following a good showing in June when collective like-for-likes across the sector grew 1.4%, the eating and drinking-out market is showing some resilience. Nevertheless, with Brexit looming, there will be real nervousness about a crash in autumn.” Trevor Watson, executive director, valuations at Davis Coffer Lyons, added: “These figures are very much ‘steady as she goes’ for both the pub and restaurant sectors. Pub like-for-likes were always going to be challenging against a World Cup year and the exceptional weather of 2018. Decent weather in 2019 as well has no doubt helped sustain performance on the wet-led side. We continue to see very good results from quality operators with good demand for new sites across the country from both established and emerging operators across both sectors.” Total sales across the 54 companies in the Tracker, which include the effect of net new openings since this time last year, were ahead 3.6% compared with last July. “While managed pub groups continue to expand slowly, during July restaurant groups registered more closures than openings,” said Chessell. Underlying like-for-like growth for the Tracker cohort, which represents both large and small groups, was running at 1.8% for the 12 months to the end of July, up from 1.6% at the end of June.

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.

Imbiba chairman – BGF boss wrong to simply say venture capital in Britain does not work: Imbiba chairman John Connell has argued BGF boss Stephen Welton is wrong to simply say venture capital in Britain does not work, and entrepreneurs need “more than just money” in the early stages. Responding to a story in which Welton questioned the business model of Britain’s venture capital firms, Connell told Propel: “Stephen is an extremely successful investor, over an extended period, but I believe he is simply wrong to say venture capital in Britain does not work. There exists in Britain an enormous entrepreneurial desire among many young people, albeit not to the same extend as the US with its frontier spirit. The early stages of any new business will be unpredictable. The entrepreneur needs to keep working at their business until they gain consistency and eliminate volatility, which is why they need more than money. They need operational, marketing and financial control input, which we provide at Imbiba. Throwing money at people rarely works. It takes time to define and refine a new business and entrepreneurs need help and encouragement during that period. Furthermore, we like people who may have failed but have learned from their mistakes. While investment is all about probabilities, probable things fail to happen and improbable things happen all the time. At Imbiba we believe the best way to anticipate the future is to specialise in a sector you know very well, with more observations and therefore the greater the certainty of prediction. All investment is made in the face of uncertainty and while specialisation, as with Imbiba, does not guarantee success we believe it reduces the element of risk. Let’s give Warren Buffett the last word in referring to potential entrepreneurs: ‘What is needed is not intelligence but moral fibre – the firmness of character to act on one’s beliefs’.” Imbiba has backed sector companies including independent neighbourhood bar group Darwin & Wallace; wine bar business Vagabond; and City of London-based, all-day market food concept Farmer J.
Mark Wingett – The Giggling Squid sales process tells us exactly where the market is: The Giggling Squid sales process, which has now ended, tells us a lot about the current state of the merger and acquisitions market, Propel insights editor Mark Wingett has argued. In his latest Propel Premium Opinion article, he stated: “I understood up to eight private equity firms had shown an initial interest in the business, which posted Ebitda of £3.28m to the end of March 2018, but was thought to have a current Ebitda run rate of just under £6m. There was also a healthy pipeline in place, boosted as the process went on with sites secured in Cambridge (beating off strong competition to secure the ex-Jamie’s site) and in Leicester. A site in Weybridge has since also been secured. Those private equity players were a good mixture of the long-term sector supporters – Piper, Active and LDC (complete with ex-Luke Johnson right-hand man Joe Tager on board); those keen to return to the sector – Primary and CBPE; one looking to make its first move into it in True Capital; and one relatively new, TriSpan. It was a healthy mixture, especially in the current climate. However, the problem was initial interest didn’t move forward into the bid process. The confidence in Giggling Squid remained but not in the overall consumer spending environment – and then in May came Jamie’s Italian's collapse. If investors were nervy before that, they would have had a month of wall-to-wall press coverage on the demise of Jamie Oliver’s restaurant empire and the supposed woes of the casual dining market to digest. The upshot was initial interest in Giggling Squid dwindled, so CBPE, the former backer of Cote, became the only show in town. Go back a few years and you would get four or five interested parties ready to bid, and then two or three put through for a competitive bidding process. The market now has shrunk that down. Still there was confidence a deal could be agreed. However, the lack of confidence in the market has also impact multiples and what is a fair valuation of a business. Giggling and backer BGF valued the business in excess of £50m, working on an eight times-plus multiple, while I understand CBPE was more comfortable with a 7.5 multiple and bid at about £45m. Both parties stuck to their guns and therefore the process came to a natural conclusion. Of course, speculation has centred on whether Giggling and BGF were asking for too much. Looking at the progress/growth trajectory Giggling Squid has been on and should continue on, you would argue the price they stuck to was fair. And with the state of the market and lack of any recent comparable sales evidence you could also state a case for where CBPE pitched its offer. With circa 15 investments in the sector, BGF has very much been a positive force, but it still needs a positive exit. It seems with more of a bank mentality, rather than a private equity one, it is happy to be a long-term holder/supporter of businesses.”    
US restaurants see sales and visits plummet in July: US restaurants saw sales and visits plummet during July – posting the worst year-on-year results in almost two years. Like-for-like sales were down 1.0% during the month – a 1% drop from June, according to data company TDn2K’s Restaurant Industry Snapshot, which is based on weekly sales from more than 31,000 restaurants and 170 brands that represent almost $72bn in annual revenue. It is the first time since September 2017 the industry has seen sales growth numbers this low. Like-for-like visits fell 4.0% during July – a 0.8% decline from June – and the weakest for the industry since August 2017. Victor Fernandez, TDn2K, vice-president of insights and knowledge, said: “Without a doubt, we are experiencing a year-on-year slowdown in restaurant like-for-like sales coming, in part, from lapping over tougher sales comparisons dating to the second quarter of 2018. But July’s unique challenges for chain restaurants likely play a significant part in the downfall we saw in the results. Once a significant portion of restaurant guests are taken off their usual routines, they tend to shift some of their spending toward other food-at-home or food-away-from-home options.” Fernandez said the expectations for the rest of 2019 are for a continued slowdown in like-for-like sales growth, with some weak months ahead as the industry laps stronger results in the second half of 2018.
Job of the week: COREcruitment is seeking a marketing director on behalf of a medium-sized London-based foodservice business. Candidates need to have director-level marketing experience, proven knowledge of driving change in a growing team and excellent management skills, preferably with experience within the high-street casual dining, quick service restaurant, cafe or licensed trade. The position offers a salary of up to £120,000 plus benefits. For more details or a confidential chat, email

Company News:

Costa reduces cup sizes, increases prices: Costa Coffee has reduced the sizes of its cups while hiking up prices. Despite the coffee company cutting its cup sizes by up to a third, all of the different options have seen a 10p price increase. It means a customer who previously paid £2.45 for a medium will now have to order the new large, priced at £2.85, to get the same amount of coffee. As part of the changes, the company's former small cup, measuring 12 ounces, has been rebranded as a medium. Meanwhile, the old medium, which is 16 ounces, is now called a large, with the old large, 20 ounces, rebranded as the new cup size, “extra-large”. As part of the new line up, Costa has also introduced a new small option, which contains just eight ounces, making it a third less than the original. The change, which is currently being trialled in Hampshire, Gloucestershire, South Yorkshire and Birmingham, has been introduced to both the company's paper takeaway cups and its in-store china. Whitbread, which owns the Premier Inn hotel chains and Beefeater restaurants, sold Costa to Coca-Cola for £3.9bn in January. Under the deal, Coca-Cola took on Costa's 2,400 shops in the UK and a further 1,400 in 31 other countries around the world, including in China, Saudi Arabia and India.
FCA launches investigation into Goals Soccer Centres: The UK’s financial regulator, the Financial Conduct Authority (FCA), has launched an investigation into alleged fraud at five-a-side football pitch operator Goals Soccer Centres, reports The Sunday Times. Goals said earlier this month it would delist its shares from London’s AIM market in September after an investigation into its accounting uncovered “improper behaviour” going back almost a decade and made it impossible to file last year’s accounts on time. The company, in which retail tycoon Mike Ashley’s Sports Direct holds a stake of almost 19%, had said its audit for full-year 2018 had been suspended and its shares would stop trading on the index from 30 September. 

Tossed promotes Neil Sebba to managing director: Tossed, the London-based healthy eating brand, has promoted Neil Sebba to managing director, Propel has learned. Sebba joined in 2010, when Tossed had just five sites, and worked for eight years as finance director. He became business development director of the now 35-strong Tossed at the start of this year. Vincent McKevitt, who remains in situ as founder, said: “The board and I are delighted to promote Neil to the role of managing director to lead the next stage of the business’ development. Our recent innovations in hot food, technology, vending and delivery have laid the foundations for the next few years of growth. I’m immensely proud of where Neil and the senior team are taking the business; on average they have been with Tossed for more than six years, and ultimately it’s their hard work that has got us to where we are.” Sebba added: “This wonderful business sits at the forefront of health and technology in food-to-go. Working with Vincent, Angelina Harrison (commercial director) and the senior leadership team to bring healthy, customisable, made-to-order food to more people is an honour, and I am excited about us delivering on its next stage of growth.” An early adopter of technology, Tossed was the first restaurant chain or retailer in Europe to go completely cashless, in 2016. It has recently developed Speedy Greens, a vending solution to extend its product reach directly into offices and travel hubs. In 2015, Tossed completed the sector’s biggest equity crowdfunding on Seedrs and in 2018, Tossed acquired its direct competitor Vital Ingredient.

Daughter of Chris Corbin lines up two new ventures: Amy Corbin, daughter of Corbin & King co-founder Chris Corbin, is lining up two more sites having launched her debut restaurant last year. Amy Corbin and her partner Patrick Williams opened Kudu in Peckham, south London, in January 2018. The restaurant in Queens Road offers South African-inspired dishes with locally foraged ingredients. Now the pair have revealed they are opening two more sites in Peckham. Announcing their plans on Instagram, they said one venue will be a tapas restaurant called Little Kudu, and a second will be a cocktail bar named Smokey Kudu. All three will operate under the newly formed “Kudu Collective”.

Private club for wine-lovers 67 Pall Mall to begin international expansion with Singapore launch: 67 Pall Mall, the world’s first private members’ club for wine-lovers, is to open its first international site, in Singapore. 67 Pall Mall Singapore will launch in autumn 2020 at the Shaw Centre in the Orchard Road district, in what will be the start of an overseas expansion programme. As with its counterpart in St James’s in London, the 15,000 square foot site will be home to 5,000 wines spanning 42 countries, including 1,000 wines available by the glass. The food menu will combine signature dishes from London with a selection of regional plates. Members will be able to store and enjoy their own wine in the club for a small corkage fee. Members will also have access to a calendar of events, curated and presented by all three of Singapore’s resident masters of wine. Founder and chief executive Grant Aston said: “We are thrilled to be able to bring people together with a shared passion for fine wine, and to take the 67 Pall Mall journey to the next level. Singapore is a sophisticated market with an increasing appetite and appreciation for wine, making it the natural choice in our first step to international expansion. By merging the best of what we have established in London with Singapore’s unique culture and heritage, we are creating a haven for wine lovers that is deserving of this thriving and cosmopolitan city-state.” Membership of 67 Pall Mall Singapore will give members access, at no extra charge, to 67 Pall Mall’s London clubhouse, which opened in 2015, as well as clubs that open in future.
Claw to move from Kingly Court to Covent Garden: Seafood restaurant Claw will be moving from its restaurant in Kingly Street to a new site in Covent Garden, opening in early September. The new site has not been specified, but Kerb is launching a new permanent street food market in Seven Dials in early September. Claw founder Fabian Clark told Propel: “We’ve loved every minute in Kingly Street and we have a very loyal customer base, who we look forward to seeing just up the road. The move allows us to return to our roots in street food – our most popular dishes were definitely the crab and lobster rolls, and our mac ‘n’ cheese, so these will be the hero in our new spot, which we’ll be launching in a few weeks.” The new menu will be introducing a shrimp roll and a Lobster Mac. There will also be a new wine and beer list, with as much sourced from the UK as possible. 
Greene King launches games concept Greene Room: Brewer and retailer Greene King has launched a new games concept, called The Greene Room, at the Thieves Kitchen in Worthing. The venue features social darts, shuffleboard, pool, table football and live sport. The concept bills itself as The Greene Room – King of Games. Greene King business development manager Mike Williams said: “Day one was a huge success.”
KAM Media appoints new marketing director: Insights agency KAM Media has appointed Katie Jenkins as its new marketing director. Jenkins will join founder Katy Moses and strategy and insight director Blake Gladman in driving the future growth strategy of KAM Media. She will be responsible for expanding KAM Media’s presence as research and insight experts in existing and new channels while leading the integration and implementation of KAM Media’s events, PR and digital marketing strategies. Jenkins has worked in the UK retail industry for more than 17 years, most recently as head of customer proposition for Bolt Learning, where she developed the customer proposition for the fast-growing technology startup. Moses said: “Having worked with Katie for five years in a previous life, I am convinced she is the right person to take KAM forward with us, and to join in the shared vision that Blake and I have for the business.” Jenkins added: “I can’t wait to start and help Kate and Blake to create this exciting new chapter for the business.”
Zia Lucia team to launch pasta concept: The team behind Islington-based pizzeria Zia Lucia are to launch a pasta restaurant concept this month. Claudio Vescovo and Gianluca D’Angelo are launching Berto, which will be next to Zia Lucia in Holloway Road. Just as Zia Lucia uses different flours to create four signature pizza doughs, Berto will serve a selection of pasta dough made from traditional, wholemeal and gluten-free flours. The concise menu will focus on simply served fresh pasta, made on-site daily. The concept is named after Vescovo and D’Angelo's expert pasta maker, friend and teacher, known as Berto, who owns a pasta shop in his home town of Ronciglione, just north of Rome. Berto will train the in-house team at the restaurant. The 45-cover venue will be centred around a pasta bar. The drinks menu will include a broad selection of Italian wine, alongside beer from north London brewer Hammerton Brewery and cocktails.
Stonegate reveals 32% reduction in chef turnover and 1.8% food margin increase on back of extended apprenticeship programme: Stonegate Pub Company has revealed it has reduced chef turnover 32% and increased food margins 1.8% having extended its apprenticeship programme back-of-house. Stonegate has used the Apprenticeship Levy to expand its Albert’s Theory of Progression programme with the help of Remit Group. Stonegate has invested in the training and development of its team members with programmes that are worth £5,000 per person. Jemelle Bish, apprenticeship manager at Stonegate, said: “In 2017, when the levy went live, our apprenticeship provisions were already bedded into the company. However, we used the levy as an opportunity to fine-tune our strategy and used the government changes to create corporate standards. We had already experienced great success with our apprenticeship programme, with more than 2,000 learners achieving their qualification and knowing the success of apprenticeships to our business and we saw this as a real opportunity to turn our focus to a key area of development needed, namely our kitchen workforce of 2,600 employees. The success of the chef apprenticeship programme has been seen at all levels. We have seen a 1.8% improvement in food margin in sites with apprentice chefs on the programme, repaying the apprenticeship levy investment many times over. Not to mention the success we have seen in chef retention too – with chef turnover reducing by 32%.”
M&B to open second Son of Steak, in Cheltenham next month: Mitchells & Butlers (M&B) will open the second site for its fast-casual concept Son of Steak next month. The company will launch the venue at The Brewery Quarter in Cheltenham on Monday, 23 September after transforming its former Harvester restaurant. The site will undergo an extensive refurbishment and will create 106 covers inside with a further 42 outside. General manager Phil Davies said: “With us being a new, exciting brand, the question of deciding where we’d launch our second site was really important. We’ve chosen an area of town that is growing in popularity and attracting a lot of great brands.” Son of Steak was launched in Nottingham in 2017. Seen as a fast-casual relative to M&B’s successful steak restaurant concept Miller & Carter, Son of Steak’s menu focuses on hand-selected products including wet and dry-aged steak, selected for its flavour and sourced from cattle reared on sustainable British and Irish farms before being matured for at least 28 days. A range of sides and sauces include freshly hand-cut chips cooked on-site and secret steak sauce, while more adventurous guests can sample a steak bao bun inspired by Taiwanese street food. Son of Steak also offers mojitos on tap. Propel revealed in April that M&B was exploring opportunities for Son of Steak and had lined up the Cheltenham site.
New York's spiralling minimum wage had no effects on sector employment growth: The introduction of a $15 minimum wage for New York City restaurant workers, a 20% increase, has not caused the devastation to employment numbers that was predicted, a new study has found. The New York minimum wage stood at $7.25 in 2013, but the subsequent rise has not stopped the city’s restaurant industry outperforming the rest of the US in job growth and expansion, claimed the study. Researchers from the New School and the New York think tank National Employment Law Project found no negative employment effects of the city increasing its minimum wage to $15. Restaurant workers in the city saw a pay increase of between 20% and 28%, representing the largest hike “for a big group of low-wage workers since the 1960s,” James Parrott, a director of economic and fiscal policies at the New School and an author of the study, told Gothamist. 

Great British Bake Off: The Professionals contestant to open second cafe: Great British Bake Off: The Professionals contestant Marta Child is to open her second cafe. Child, who owns Bom Bom Patisserie in Loughborough, competed in the Channel 4 show with teammate Julie Eldridge, who taught her while she was doing a course in patisserie and confectionery at Loughborough College. Now Child and husband Dan are opening a second site in Loughborough, at Canal House in Lisle Street. The building has a co-working space, part of which will be the Bom Bom Patisserie kitchen and cafe. The venue is opening in mid-September. Child told Leicestershire Live: “The site attracted us because it’s a location lacking a nice place to eat, and the concept of the co-working space provided by the Canal House really appeals to us.” Child founded Bom Bom Patisserie in 2012. The business originally operated from her Loughborough home before the cafe opened in Derwent Drive in 2016. 
Cumbrian brewer acquires two micro-breweries: Kendal-based Bowness Bay Brewing has acquired two micro-breweries as part of plans to grow its market share. Standish-based Windmill Brewery and Cumbria's Appleby Brewery have been snapped up, with founder Richard Husbands noting talks had been ongoing for “some time”. He told Insider Media: “Windmill and Appleby have established customer bases with strong products and we'll continue to operate the brands, particularly where there is a strong geographical association with customers. With Windmill being based in Standish, it gives us the ability to expand our reach into Lancashire and Cheshire. Appleby also has existing contracts with Booths, Co-op and Westmorland, while Windmill has existing contracts with Co-op. These relationships will dovetail nicely with our growth plans for these sectors. Acquisitions that provide us with the ability to grow or give us new routes to market will certainly form part of our growth plans, but that’s not the focus. Our priority is to ensure we continue to brew high-quality beer our customers like and want.” Bowness Bay Brewing has recently undergone an expansion programme, which includes the opening of a new bar called the Barrel House. This will stock new brands and beer from the acquired businesses.
24-hour Starbucks drive-thru in Swansea changes hands: A 24-hour Starbucks drive-thru in Swansea has changed hands in a £1.15m deal. Savills sold the site in Fabian Way to a private buyer on behalf of MVJ Capital. The drive-thru, which was built in 2015 and lies off the A438, is let to Magic Bean Co. MVJ Capital managing director Matthew Pearcey told Insider Media: “We have owned this asset since development but the current strength in the drive-thru investment market gave us a one-off opportunity to exit at such an attractive level.” Bromwich Hardy acted for the buyer.
London Beer Factory seeks new brewery to increase capacity tenfold as it undergoes rebrand: London Beer Factory is on the hunt for larger premises as it looks to increase capacity up to tenfold having seen significant growth in demand across the on and off-trade. The company has taken the decision to move away from its industrial park site in Gipsy Hill, south London, as it looks to expand production. Managing director Sim Cotton told Propel: “We installed a new canning line in November capable of packaging 2,400 cans per hour and we've been running it flat out since it was commissioned. We are now growing at a rate of 100% year-on-year. As a result we are actively looking for a much larger premises to relocate – a site capable of increasing our capacity by ten times and able to accommodate an on-site taproom.” London Beer Factory is also undergoing a rebrand to give it a more “progressive, modern, and clean look”. Cotton said: “We have evolved. Refocused, redesigned and reinvigorated – we are proud to be stepping out as our true selves. We not only outgrew our previous branding but our identity itself. What the brewery stood for was lost in the last designs.” The brewery will transition to the new look over the next three months, with all beer out of the brewery from Monday (12 August) featuring the new branding.
BrewDog opens Berlin brewery: Scottish brewer and retailer BrewDog has opened its new brewery in Berlin. BrewDog acquired the brewery and taproom in the Mariendorf neighbourhood of Berlin from Stone Brewing in April. Now it has reopened the site following a revamp, which includes a 2,500 square metre taproom and 5,000 square metre beer garden. BrewDog has also installing eight 50-litre brewkits that can be hired while the brewery also features a co-working space and beer school. The company has put in a vintage arcade games area as well as shuffleboard tables. The outside area features ping pong tables and giant games. The site also features a craft beer museum.
Franklin & Sons unveils online gin ‘n’ tonic menu creator: Franklin & Sons, the premium tonic, mixer and soft drinks brand from Global Brands, has unveiled a new online system designed to aid on trade venues in creating and printing their own gin ‘n’ tonic menus. Launching with more than 500 gins and many pairing combinations, the system will help operators tailor a menu to their specific needs, free of charge. The system allows venues to simply log on and choose their gin selection, and a pairing tonic water and accompanying garnish are then suggested. Venues can choose hand-drawn illustrations to accompany, or a classic text menu. There is no limit to the number of menus or combination venues can create. Franklin & Sons brand manager Rosie Crossman said; “We developed this online menu system to support customers in creating and showcasing the perfect gin ‘n’ tonic serves. The system is easy to navigate, menus can be designed in a matter of minutes, printed and arrive with customers within five days.” Any venue stocking Franklin & Sons can create their menus by clicking on the “menu portal” tab on the Franklin & Sons website.

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Jameson Banner
Co-Kitchens Banner
HDI Banner
Meaningful Vision Banner
Ponte Banner
Lamb Weston Banner
Unilever Banner
Unilever Banner
Santa Maria Banner
Contract Furniture Group Banner
Tofoo Pro Banner
Propel Banner
Venners Banner
Wireless Social Banner
Payments Managed Banner
Deliverect Banner
Hospitality Rising Banner
Cynergy Bank Banner
John Gaunt Banner
HGEM Banner
Zonal Banners
Access Banner
Purple Story Banner
Propel Banner
Christie & Co Banner
Beyond the Bean – Zuma Banner
CACI Banner
Sector Banner
Airship – Toggle Banner
COREcruitment Banner
Tofoo Pro Banner