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Fri 20th Dec 2019 - Propel Friday News Briefing

Story of the Day:

Experiential leisure at all-time high, rooftop venues on the rise: Prospects for the UK’s leisure industry are positive as consumer confidence soars to its highest level in a decade, according to a new report from CBRE. The report stated: “Young peoples’ appetite for new types of social experiences is leading many to new bar and game concepts such as crazy golf, shuffleboard and social darts. The most innovative venues are multi-dimensional leisure hubs that go beyond food and drink by considering extra elements such as atmosphere and live entertainment.” Regarding the restaurant market, CBRE said London remained “relatively insulated by an undersupply of premium stock”. It added: “A finite number of properties capable of operating as restaurants or bars as well as strict local authority control of the A3 planning class and premises licences has meant supply is generally outstripped by demand.” The report highlighted the rise in popularity of rooftop venues in the capital. It stated: “Whatever the concept, diners are paying for the ambience and view. Arrival experience continues to evolve with each opening and is a significant consideration beyond any standard restaurant requirement. We’re starting to see operators take ground-floor trading space linked to rooftops, giving them the best of both worlds. A small group of brands have carved out a reputation for doing rooftop destinations well – D&D London, Aqua and Rhubarb are well known in the category. Six years on, Sushisamba is still evolving its menu and remains a staple destination. Rent values are on the increase and turnovers are healthy. This growth shows there’s room in an already strong market. We expect to see rooftop venues as continued and permanent additions to high-rise developments.”

Industry News:

Propel launches Turning Data Into Strategy & Action Masterclass, open for bookings: Propel has launched the Turning Data Into Strategy & Action Masterclass in partnership with hospitality data consultancy DataHawks, with the event now open for bookings. The masterclass will take place on Tuesday, 25 February at Chartered Accountants Hall, One Moorgate Place, London EC2R 6EA. The event will look at why operators should be using data and address some of the common myths and language that surrounds it. Attendees will also learn how to use data to drive sales and long-term loyalty without sacrificing margin or brand credibility. DataHawks founder Victoria Searl will talk about building and optimising customer journeys, finding new customers and leads, and measuring the impact and effectiveness of offline marketing. Searl will reveal how to prepare for the unexpected by using data and tech; improve the impact and effectiveness of discounts, offers and rewards; retain revenue when closing sites; and what data to collect and why. Meanwhile Dan Brookman, chief executive of Airship CRM, will also talk about knowing and understanding your customers to drive personalisation and conversion. The event will be followed by drinks at The Tokenhouse in Moorgate. Tickets are £295 plus VAT for Propel Premium members and £345 plus VAT for non-members. To book, call Anne Steele on 01444 817691 or email

Food and leisure remain key factors in shopping centre visits: Food and leisure options continue to be a key factor when consumers decide where to shop, according to a new study. GlobalData’s Top 50 Shopping Centres Report found more than four-fifths (83.1%) of shoppers undertook leisure activities while visiting a shopping centre in 2019, up 2.5 percentage points on 2018, while almost one-quarter of all consumers visit shopping centres to eat out or use leisure facilities. Westfield’s two London centres – Westfield London and Westfield Stratford City –retained the top spots in the top 50 list, while Intu had the most centres in the top 20. Intu Watford was the biggest riser in this year’s rankings, climbing ten places, thanks in part to a £180m investment programme that boosted its food and leisure offer. Westgate Oxford and The Lexicon Bracknell both rose eight places. GlobalData retail consulting director Joseph Robinson said: “More than one-third (36.6%) of shoppers visit shopping centres at least twice a month, with the average shopper making 17.3 trips a year – up from 15.9 in 2018. Confounding today’s modern myth that young people don’t like to visit physical shops, the research shows under-35s remain the most frequent visitors. As retail spend continues to shift online, shopping centres play an important role in facilitating the multi-channel shopping journey, with the proportion of shoppers visiting to return or collect an online order rising since 2018.”

PCA survey highlights tied tenants’ concerns but pub companies refute figures: Tied pub tenants have revealed differing levels of satisfaction with pub-owning businesses in a survey carried out for the Pubs Code Adjudicator (PCA). However, pub companies said the figures were almost nine months out of date and didn’t fairly portray the current situation. The survey found tenants of the largest regulated pub company, Ei Group, expressed the greatest levels of dissatisfaction on issues ranging from support provided by business development managers to management of repairs. Meanwhile, almost half of Punch tenants said they didn’t expect to be running their pub in five years’ time. In contrast, Admiral Taverns’ tenants showed high levels of satisfaction with the company, with more than four-fifths (83%) likely to remain with Admiral for the next five years. More than three-fifths (61%) of Ei Group tenants said they received information they required about their tenancy from business development managers, compared with the overall average of 72%. Meanwhile, more than half (53%) were happy with the support they received, compared with 64% overall; while 48% had confidence in the way their tenancy was handled, compared with 58% overall. Three-fifths (60%) of Ei Group tenants were also concerned about how repairs and dilapidations were handled. PCA Paul Newby said: “Some tenants clearly feel their companies are falling short and the deputy PCA and I are engaged with pub-owning businesses to address the concerns.” Punch managing director Andy Spencer told Propel: “The PCA tied tenant survey taken in March 2019 canvassed 50 of our publicans from our estate of 1,200 pubs. We appreciate the feedback on how we can improve the relationship with our publicans and continue taking huge steps on our journey to create exciting possibilities through significant investment and a more flexible, pub by pub approach.” An Ei Group spokesman told Propel: “Ei Group remains committed to working openly and transparently with the PCA to secure greater clarity and an improved level of service for our publicans. But the figures the PCA has issued are almost 12 months old and we’ve already implemented a number of changes that more than address a large proportion of the publicans’ concerns.” Chris Jowsey, chief executive of Admiral Taverns, said: “We take great pride in our longstanding relationships with our licensees and operate a highly supportive approach. It’s good to see this recognised in an independent survey by the Pubs Code Adjudicator with fantastic feedback on the length of tenancies our licensees expect to have with us.” Ipsos Mori surveyed a representative sample of tenants of each of the six regulated pub-owning businesses – Admiral Taverns, Ei Group, Greene King, Marston’s, Punch and Heineken-owned Star Pubs & Bars. This is the second survey of tied pub tenants conducted by the PCA following one in 2017-18.

UK pub deals top £8bn in 2019: More than £8bn of deals have taken place in the UK pub sector in 2019, according to agent Colliers International. The company said increased pub visits had created a buoyant market, while the festive season would add a further boost. Recent data from the Office of National Statistics revealed the number of pubs had increased for the first time in ten years. James Shorthouse, head of alternative markets at Colliers International, said: “Continued wage growth and a belief some form of political stability has been restored are likely to support our prediction that UK pubs will thrive over the festive season. In addition, the midweek timing of Christmas will give additional peak trading days. Operators are already saying Christmas dining bookings are going well. The pub remains a feature of British social life and no doubt many customers will raise an extra glass now the uncertainty of Brexit is closer to being resolved.” The largest 2019 pub deal came in August when Hong Kong-based CK Asset Holdings bought Greene King for £4.6bn. Stonegate Pub Company announced it was buying rival Ei Group for £2.9bn in July.

Trade bodies back business rates relief: Trade bodies have welcomed news of additional support for hospitality businesses in 2020. In the Queen’s Speech the government announced all retail businesses with a rateable value of £51,000 or less would see their business rate discount rise to 50% from 33%, while independent pubs would see an additional £1,000 rates cut. UKHospitality chief executive Kate Nicholls said: “Rates have arguably been the single biggest barrier to growth for hospitality and a shake-up of the whole business tax system is overdue. Additional support for pubs, which have been hit so hard by rates in recent years, is a great first step. This support does need to apply to the whole of hospitality, though, and we’ll continue to push the government. We are also pleased to see the government move towards an immigration policy that supports the economy and businesses. A fair and managed three-tier system at all salary and skilled levels, hand-in-hand with investment in skills and training, is a must.” Mike Clist, chief executive of the British Institute of Innkeeping, said: “We are delighted the government has recognised the importance of supporting high-street businesses, in particular those in hospitality. Our members do more than just sell goods and services – they are a haven for the lonely and provide employment and a fantastic career opportunity for so many. They deserve the financial support this announcement gives to ensure they can continue to be vital hubs of the community.”

Long Live The Local targets more help for pubs in Christmas carol video: The Long Live The Local campaign has released a video calling on the government to cut beer duty to help pubs. The video features carollers singing “silent pint” rather than “silent night”. The campaign points to new research by the British Beer & Pub Association that highlights the importance of pubs. More than 200 million pints will be enjoyed during the festive period in UK pubs, with almost three-quarters (72%) open on Christmas Day and more than one-third (34%) serving Christmas dinner. Long Live The Local programme director David Cunningham said: “Pubs are a vital community hub, particularly at Christmas. What better place to toast the festive season and end the year? Sadly local pubs are still closing due to financial pressures. It’s easy to forget the stark reality pubs face amid the Christmas celebrations and we hope Silent Pint will remind the government how important it is to cut beer duty.”

Company News:

Barber paid £345,000 for Cabana’s five-strong London estate, Hache restructuring shareholder debt: Jamie Barber paid £345,000 to acquire the five-strong London estate of Cabana through his Hush vehicle. Barber founded the Brazilian barbecue group with David Ponte. The restaurants are being integrated into Hush while the group has raised funds from shareholders to improve liquidity and is restructuring shareholder debt. The details were revealed in Hush’s accounts for the year ending 30 December 2018, which showed turnover up 3.6% to £8.5m compared with £8.2m the previous year. Ebitda for the group was £168,500 compared with £239,000 the year before. Pre-tax losses narrowed to £650,000 from £993,000 the previous year. In his report accompanying the accounts, Barber stated: “The company performed well in 2018, benefiting from good summer weather, rebranding of the last Hush Brasserie in Holborn to Hache, and strong private dining revenue at Hush, which recorded its best ever performance. To date, 2019 has been impactful and challenging in equal measure. The record setting wet spring and early summer of 2019 marked a stark contrast with the long hot summer of 2018, when the sites are at their strongest. It is comforting to see, however, that Hush’s performance bounced back swiftly when the better weather returned in the late summer. In January the company acquired a former Cau site in Kingston for nil premium and in May opened its seventh Hache restaurant, dubbed Riverside Social. The Kingston restaurant is larger than a traditional Hache and has given us the opportunity to adopt a more modern all-day approach. In August the company acquired five Cabana restaurants based in London. These restaurants are currently being integrated into the group with an expectation Ebitda generated from these restaurants may contribute towards the group’s profitability without requiring a material increase in overheads. At the same time the company has raised funds from shareholders to improve liquidity and is in the process of restructuring its shareholder debt to reduce the ongoing interest burden and debt repayments. It is anticipated the opening of Kingston and the acquisition of Cabana will significantly boost the company’s revenue and improve performance. The difficult trading conditions in the sector continue to present opportunities and we’re looking at these opportunities carefully and cautiously.”  

Marston’s executives see drop in remuneration after missing bonus, Findlay volunteers to cut pension provision: Marston’s executives have seen a slight drop in their remuneration after missing out an their annual bonus, the company’s annual report has revealed. Chief executive Ralph Findlay and chief financial and corporate development officer Andrew Andrea fell about £3m short of hitting the company’s underlying profit before tax threshold target of £104m, while they were just below the required 10.5% return on capital target to trigger a pay-out. This meant Findlay saw his total remuneration fall to £722,432 for the year ending 28 September 2019, compared with £807,665 the previous year. This consisted of £563,900 salary, £17,557 benefits and £140,975 pension. Andrea’s total pay was down to £468,061 from £524,621 the year before. This consisted of £377,670 salary, £14,857 benefits and £75,534 pension. Both executives were awarded a 2% salary increase “in line with the average salary increases across the group”. The report also revealed Findlay has volunteered to reduce his pension provision from 25% to 20% of salary. Remuneration committee chairman Catherine Glickman said: “Ralph Findlay’s pension allowance is a legacy arrangement arising from his previous participation in the group’s defined benefit plan. Recognising the provisions of the Corporate Governance Code and the developing practice and shareholder sentiment in this area, the committee originally intended his pension would remain fixed at an absolute amount and would not increase over the next three years, thereby reducing his pension contribution in line with any salary increases. However, after further discussions with shareholders and in response to shareholder feedback, the chief executive has volunteered to reduce his pension provision to 20% of salary, effective from the start of the 2019-20 financial year. The committee will continue to review and consider evolving market practice and investor views with regards to the pension arrangements for existing executive directors recognising these are contractual rights.”

Young’s acquires historic Greenwich site: London pub retailer Young’s has acquired Enderby House in Greenwich, Propel has learned. The historic building on the Thames Path will be restored to offer 140 covers inside, 70 on a ground-floor terrace and 30 on the roof. There will also be a first-floor octagonal private dining room with panoramic views. It is the company’s fifth pub in Greenwich and 18th on the Thames. Young’s acquired the virtual freehold in a deal brokered by agent Fleurets. Young’s acquisition manager Brendan Brammer said: “This historic building, where the cables for the first transatlantic underwater communications were loaded on to Brunel’s SS Great Eastern, will be restored to former glories and reopen in the summer as a premium Young’s riverside pub with two terraces overlooking Canary Wharf.”

Itsu introduces touchscreens, extends hot food range: Itsu, the healthy Asian food chain created by Pret A Manger co-founder Julian Metcalfe, has introduced touchscreens that allow guests to customise their food. The technology has been installed at its new Lime Street site in the City of London, marking the brand’s evolution from its roots as a sushi restaurant. The outlet also offers Itsu’s largest range of hot, customisable food after hot food sales at Itsu’s 74 restaurants doubled in the past 24 months. The touchscreens and extended hot dish range will be rolled out to 23 venues in 2020 and form the direction for future sites. Meanwhile, the Lime Street site is only the third Itsu branch in London to open early and serve its new breakfast menu. Metcalfe said: “We are putting a bigger emphasis on hot food to show there’s something for everyone. Customers will also discover other innovations, including trialling new waste bins so we improve recycling, using fewer sushi fridges to save energy, and designing stores with better views of the kitchens.”

Glendola Leisure reports turnover and Ebitda boost: Glendola Leisure, led by Alex Salussolia, has reported turnover increased 3.0% to £38.9m for the year ending 30 March 2019, compared with £37.8m the year before. Ebitda was up 11.8% to £6.3m from £5.7m the previous year. Pre-tax profit was down 10.3% to £2.4m from £2.6m the year before. During the period the company acquired the Tipsy Bird in Belfast to add to its sites in London, Glasgow, Edinburgh, Manchester and on the south coast. In their report accompanying the accounts, the directors stated: “The group has traded well in a very challenging economic environment, which has seen increased costs and competition. The group has complied with all its bank covenants throughout the year.” At the end of the period the number of employees increased to 635 from 601 the previous year.

Sayers the Bakers bought out of administration: North west-based independent retail bakery Sayers the Bakers and sister brand Poundbakery have been bought out of administration saving more than 1,400 jobs. Karen Wood has acquired the business’ assets and formed a new company, Sayers and Poundbakery, which will be run by the former management team led by Mark James and David Silvester. The move comes after Sarah O’Toole and Jason Bell, of Grant Thornton, were appointed joint administrators to Sayers the Bakers. Operating since 1912, the £50m-turnover business employed more than 1,500 people at 167 Sayers, Poundbakery and Poundcafe stores and its manufacturing and distribution centres in Bolton. The new company will take on the bakery and distribution centre in Bolton and the majority of the bakeries in northern England, North Wales, Yorkshire and the Midlands. However, 11 stores will close. The administrators said efforts had been made to offer jobs to as many people as possible affected by the closures. The shops will continue to be branded as Sayers the Bakers and Poundbakery.

Brunning & Price buys Putney Heath pub: Brunning & Price, the gastro-pub brand owned by The Restaurant Group, has acquired The Telegraph in Putney Heath, south west London. The pub is named after Admiralty Telegraph, which stood at the site during the Napoleonic Wars to convey messages between London and Portsmouth. The pub will undergo a refurbishment ahead of a planned opening in April. Brunning & Price managing director Mary Willcock said the pub would feature “open fires, wooden floors, bookcases, decent old furniture, and lots of rugs and plants”. The food menu will feature “hearty pub classics complemented by more exotic influences from around the world”. Willcock said: “We think simple things done well are often the best and we want to create a friendly atmosphere in attractive surroundings. That, for us, is what being a good pub in the heart of its community is all about.’’ Brunning & Price operates 72 pub restaurants. Earlier this week the company reported turnover increased to £80.5m for the year ending 30 December 2018, from £72.5m the previous year. Pre-tax profit before exceptional items was up to £13.8m from £10.1m the year before. During the period the company opened six pubs, with all of them “performing well”. Savills and DCL acted on The Telegraph deal.

Joseph Holt appoints pubs director: North west brewer and retailer Joseph Holt has promoted Mark Norbury to its board as pubs director. Norbury, who has worked in the company’s pub division for the past 20 years, is in charge of the group’s 127 managed and tenanted pubs. Chief executive Richard Kershaw said: “We are delighted to welcome Mark to the board – he brings a wealth of experience. Over the past three years we’ve acquired seven managed houses and redeveloped a number of existing ones. We look forward to continuing the expansion of our pub division under Mark.”

Urban Pubs and Bars puts Well Street Pizza in Peckham on the market: Urban Pubs and Bars, led by Nick Pring and Malcolm Heap, has put its Well Street Pizza outlet in Peckham on the market. Last week Propel revealed the venue at the Mountview Academy Of Theatre Arts had closed a year after opening, with its options being reviewed. The leasehold interest is now being marketed by Fleurets on an offers invited basis. Andy Frisby, of Fleurets, said: “This unit would be suited to a bar restaurant and enjoys superb outside trading space.” Pring added: “Well Street Pizza in Peckham hasn’t met expectations, sadly. Well Street Pizza in Hackney, however, trades extremely well and is enjoying its fourth year of double-digit growth.” Urban Pubs and Bars operates 20 sites across London.

Davenports gets go-ahead to turn Birmingham bank into pub with rooms: West Midlands brewer Davenports has had its plans approved to turn a former HSBC bank branch in Moseley, Birmingham, into a pub with rooms. Empire Star, which has owned the Davenports brands for more than ten years, has embarked on a series of expansion projects looking to re-establish the brands in the free trade and through its new managed pub estate. The venue will reopen as The Counting House in the second quarter of 2020 following a £300,000 refurbishment. The pub will offer Davenports ale, wine, spirits and cocktails alongside 60 seats for diners. A second phase of the development will create nine boutique rooms invoking the “unique bohemian atmosphere of Moseley Village”. Brand director Simon Key said: “We want the venue to reflect our traditional values of great beer and traditional hospitality – with a Brummie accent and the odd flat cap. Our offer will be an extension of The Bulls Head in Bishopsgate Street, which gives an authentic flavour of Birmingham’s heritage and is described by customers as ‘one of the city’s hidden gems’.” Davenports was founded in 1829 and acquired the original Dare’s Southend Brewery in Balsall Heath in 1962.

The Apprentice winner eyes artisan bakery on ‘every UK high street’: Carina Lepore, who operates Dough Artisan Bakehouse in Herne Hill, south east London, has said she wants a “branch on every UK high street” after winning BBC show The Apprentice. Lepore, who employs her father as head baker, will use Lord Sugar’s £250,000 investment in an attempt to build an empire of high-street bakeries. She said: “It has been an amazing achievement for myself.” Lord Sugar took into account the high demand for cafes and food outlets when choosing his winner. He told the finalists: “When you look at the high street these days that’s all it’s packed with – food.”

Liberation Group invests in well-being of staff and estate: Channel Islands-based brewer and retailer Liberation Group has told Propel the company has been investing in its “property and team members’ well-being” in the past few months. Projects include The Quarrymans Arms, near Bath, which can now offer private dining; The Royal Oak in Prestbury, near Cheltenham, which has been remodelled to create a larger dining space; and The Bear in Cirencester, which has undergone a makeover inside and out. Meanwhile the company has reopened its staff accommodation in Guernsey following an £800,000 refurbishment. St Clare Court now offers 34 private rooms, a communal kitchen, working spaces, break-out rooms and social areas. Team members living at St Clare Court work at various Liberation Group sites on the island. Operations manager Lorna Fulton said: “St Clare Court is a prime example of the investment Liberation Group is willing to put into its property and, more importantly, its team members’ well-being. We don’t have a business without them so it goes without saying how important it is our team members feel supported and nurtured.” Jayson Perfect, managing director of managed pubs at Liberation Group, added: “It has been a busy few months. We’ve welcomed a number of exceptional new recruits to the team recently too and will introduce more in 2020.”

Whitbread wins appeal for Marylebone hub hotel: Whitbread has won its appeal to turn former offices in Old Marylebone Road into a 13-storey, 294-bedroom hub by Premier Inn. It will be Whitbread’s second-largest hub by Premier Inn after its venue in King’s Cross. Westminster City Council rejected Whitbread’s planning application in October 2018, blaming issues relating to the hotel’s service bay. Whitbread head of acquisitions Derek Griffin told Property Week: “With planning permission granted, we will move quickly to redevelop the site and deliver a package of benefits to the area, including 60 jobs on opening.” Whitbread operates eight hub by Premier Inns in London zones 1 and 2, with openings scheduled in Soho and West Brompton in 2020.

Merlin director returns to drinks industry as he takes Heineken role: Heineken UK has appointed James Crampton as corporate affairs director. Crampton joins from Merlin Entertainments, where he held the same role for four years. He has 20 years’ corporate affairs experience, including ten in the drinks industry. Before joining Merlin, Crampton spent almost eight years at Diageo in global and regional positions and also worked in communications at SABMiller. Crampton replaces David Paterson, who will take the role of Heineken Group’s regional corporate affairs director for Africa and the Middle East in January. Crampton will report to Heineken UK managing director David Forde when he joins in spring 2020. Forde said: “James will be a fantastic addition to the team. He joins the business at an exciting time and will lead a very busy corporate affairs agenda.” 

Budweiser partners with renewable energy supplier to launch green tariff for pubs: Budweiser Brewing Group UK&I has partnered with renewable energy supplier Opus Energy to launch an exclusive green energy tariff for pubs and bars. The deal follows the announcement the company will brew Budweiser with 100% renewable electricity for its UK operations by the end of 2020. The programme is being piloted at 100 pubs ahead of a roll-out in the spring. Budweiser guaranteed the tariff would be “cheaper than any deal found through price comparison or third-party alternatives, with a saving of up to 30% from standard renewal prices”. Budweiser Brewing Group UK&I president Paula Lindenberg said: “We know our customers are eager to save on energy costs and consumers are more environmentally conscious than ever so this is a sweet spot where we can make a difference.”

Zonal reports 30% sales growth for liveRES: Hospitality management solutions company Zonal has reported 30% year-on-year growth in sales for its online bookings and table management solution liveRES. Zonal has partnered the technology with several operators during the year, including Prezzo, brewer and retailer Wadworth and Indian street food concept Mowgli. David Charlton, liveRES commercial director, said: “We are seeing brands look to take back control of their guest journey from third-party operators to build engagement and improve the customer experience.”

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