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Tue 7th Jan 2020 - Propel Tuesday News Briefing

Story of the Day:

Hickory’s to accelerate expansion plans after securing £13m funding package: American-style smokehouse and barbecue brand Hickory’s Smokehouse, which is backed by Piper, is to accelerate its expansion plans after securing a £13m funding package from alternative lender ThinCats. The company, which was founded by Neil McDonnell in Chester in 2010, currently operates 11 sites across the north west and Midlands with the next site due to open in Wilmslow this spring after the company took the lease of the Boddington Arms, which was previously operated by Mitchells & Butlers. Backed by Piper since October 2014, Hickory’s works with partners on existing sites (leasehold and freehold) and will open its first new-build, in Staffordshire, this year. In September head of property Jim Bishop told Propel the company was eyeing expansion outside its heartland as it looked to open up to three sites a year. He said the company was seeking sites in Yorkshire, while its Worcester restaurant gave potential to extend into Cheltenham and Bristol. In December the company opened its first venue in Shropshire, in Shrewsbury, after converting the Waterfront nightclub in Victoria Quay, creating 70 jobs. The site offers 170 covers and a large bar, while a 16-seat cinema room screens family films. Regarding the new funding package Hickory’s managing director John Welsh said: “We are pleased to have secured this deal with ThinCats as we step up our roll-out plans and continue looking for potential new restaurants. We’ve broadened our target area and are keen to find sites on either side of the Pennines and increase our presence in the Midlands. Nothing is off limits – we’ve had particular success in converting old pub sites and are excited about our first new-build. We look forward to bringing our own style of Southern hospitality to new communities in the coming years.” Dave Sherrington, regional director of business development at ThinCats, added: “The team at Hickory’s has built an impressive estate across the north west and Midlands with great potential for further growth as it expands its unique offering to new areas.” Flat Iron, which is also backed by Piper, secured £5m of funding from ThinCats in January 2018 to fund expansion.

Industry News:

New video collection will help operators map their 2020 marketing strategy: Operators can map their marketing strategy for 2020 through a video collection that features all sessions from the Social Media for Profit Masterclass. The videos reveal how to build sales and brands using social media and are taken from the social media boot camp hosted by Mark McCulloch, who has more than 20 years’ brand, marketing, digital and social media experience that includes senior positions at Pret A Manger and YO! McCulloch reveals the hot trends and tips for 2020 and what social media strategists should focus on including channels, content and untapped areas you may be neglecting. He also reveals how businesses can grow their reach by creating a personal brand and using their most senior people to make that brand more human, relevant and accessible. McCulloch is joined in the video series by Alison Battisby, founder and director of social media consultancy Avocado Social, who has ten years of social media experience and is a Facebook-accredited trainer. She reveals the best way to use Instagram to drive bookings and the do’s and don’ts of working with influencers. She also reveals how to ensure your social media adverts are working successfully. Meanwhile, Move Digital founder and managing director Geraint John reveals why voice activation is so important, what it can do for your business, where to start and how to build your voice strategy before you launch a new way to reach your customers that will leave your competitors behind. The full video collection is £295 plus VAT. To order, call Anne Steele on 01444 817691 or email

Yum! Brands to add fourth concept with $375m deal for The Habit Burger Grill: Yum! Brands has announced it plans to buy Habit Restaurants, operator of The Habit Burger Grill, in a $375m (£284m) deal, which would give the KFC, Taco Bell and Pizza Hut owner its fourth restaurant brand and first fast-casual concept. The Habit Burger Grill, which was founded in California in 1969 and went public in 2014, operates almost 300 company-owned and franchised restaurants in the US and China. Yum! Brands chief executive David Gibbs said: “We have emerged from our three-year transformation stronger and in a better position to accelerate the growth of our existing brands and leverage our scale to unlock value from strategic acquisitions. As a fast-casual concept with strong unit economics, The Habit Burger Grill is a fantastic addition to the Yum! family and has significant untapped growth potential in the US and internationally. The Habit Burger Grill offers a diverse, California-style menu with premium ingredients at a QSR-like value. The transaction is a win-win because it allows us to offer an exciting new investment to our franchisees and expand an award-winning, trend-forward brand through the power of Yum!’s scale and strengths in franchising, purchasing and brand-building.” Habit offers a wide range of options including burgers, chicken sandwiches and ahi tuna. Russell Bendel, president and chief executive of The Habit Burger Grill, said: “Over the past few years we’ve focused on becoming a total access brand by growing our delivery business, expanding our online ordering and mobile channels, and enhancing the in-store experience by introducing drive-thrus, kiosks and technology-centric solutions for operations. We’re proud these and other actions have made The Habit Burger Grill an attractive candidate for a transaction of this kind.” In 2017 Pegasus Foods confirmed it had signed an exclusive contract to bring The Habit Burger Grill to the UK and the Netherlands. The franchise agreement marked The Habit Burger Grill’s first international agreement in Europe but a debut UK site failed to materialise.

Restaurant chiefs call for wine duty cut: Restaurant executives have written to the government calling for a cut in wine duty. Signatories include Corbin & King chief executive Jeremy King, Brasserie Bar Co chief executive Mark Derry, Camino managing director Richard Bigg, Vinoteca director Charlie Young, Hawksmoor wine director Mark Quick, and Coal Shed and Salt Room director Razak Helalat. The letter states tax on wine has risen 12% since the duty escalator was scrapped in 2014, compared with 2% for spirits and a 0.2% decrease on beer. There has been no cut in wine duty for 35 years. The letter states: “In the past 12 months, still and sparkling wine volume sales in the on-trade sector have fallen by £146m (4.5%). This is more than any other category of alcohol. Sales of still wine have fallen particularly sharply, by 7.7%. We are experiencing first hand how the hospitality industry is being hit by this fall in wine sales. Cutting wine duty will not only benefit consumers and the wine industry but also provide a much-needed lifeline to the UK’s struggling hospitality sector.”

Burger King’s new plant-based burger unsuitable for vegans: Burger King’s new plant-based burger in the UK is unsuitable for vegans because of the way it is cooked. The soy-based version of the chain’s Whopper beef burger is cooked on the same grill as meat, meaning many non-meat eaters will refuse to eat it. Instead, the company is aiming the new burger, which it has named the Rebel Whopper, at “flexitarians” – people who eat meat but are reducing their intake of animal products. Toni Vernelli, international head of communications and marketing at Veganuary, a campaign that encourages people to go meat, dairy and egg-free during January, complimented the burger. He said the method of cooking made “no difference” to those trying to cut down on meat but could encourage meat-eaters to lower their consumption. “What does make a big difference to animals and the planet is when non-vegans choose a plant-based menu option, enjoy it and then order it again,” he said. “And that’s exactly who Burger King’s plant-based Whopper is aimed at, flexitarians who want to reduce their meat consumption for health or environmental reasons or are considering going vegan.”

CVAs ‘merely delay the inevitable failure’ as more than half result in administration: Company voluntary arrangements (CVAs) “merely delay the inevitable failure”, according to Colliers International, which has released data that reveals out of 23 businesses that have undergone a CVA since 2016, 13 have gone into administration. David Fox, co-head of retail agency at Colliers International, said: “The CVA was designed to help struggling businesses and avoid administration by lowering costs, rent roll, undertaking store closures and reducing staff numbers. However, it does nothing to address the high debt levels. That requires restructuring, refinancing and/or debt write-off. For many brands the CVA, therefore, fails and an administration results. It’s clearly not a mechanism that can be guaranteed to deliver a long-term viable solution, it merely delays the inevitable failure, pushing out the problems for the next couple of years and creating even more polarisation in the market place.” 

Job of the week: COREcruitment is working with a mid-sized hospitality business that is looking for an innovative, creative and motivated head of sales with proactive and reactive sales experience and large-scale team management skills. A part of the senior management team, the head of sales will be responsible for systems and process innovation, driving change and modernisation, customer engagement and championing financial targets. The salary is up to £75,000 plus benefits. Email for more information.

Company News:

Remarkable Pubs reports 6% like-for-like sales growth in December: Remarkable Pubs, the predominately east London collection of 16 privately owned pubs, has reported 6% like-for-like sales growth in December. Drinks sales rose 6% during the month, while food sales increased 8%. Managing director Elton Mouna told Propel: “I am delighted to announce our fifth consecutive year of December like-for-like sales growth. General managers have consistently excelled, embracing our culture of ceaseless improvement through empowerment. A record 70% of the estate was open for business on Christmas Day and I had the pleasure of experiencing the atmosphere in seven when delivering champagne, thanks and moral support. Our new pub, the Holly Tree in Leytonstone, which isn’t included in the like-for-like sales figures, traded above expectations in its first ten weeks. The significant investment and repositioning of this business saw December sales grow 397%. 2020 has the hallmarks of being another positive year for Remarkable Pubs. We have a very strong pub management team in place, a planned programme of small improvement works, a strong sporting calendar and the all-important collective determination to succeed. In the second half of 2020 refurbishment of our latest acquisition, the Boleyn Tavern in East Ham, will complete when we open the doors to what will be a stunning, painstakingly detailed refurbishment of a Victorian masterpiece brought back to its former glory by Remarkable Pubs founder Robert Thomas. In summary, 2019 was a good year for Remarkable Pubs and we have high and realistic exceptions for 2020.” The Holly Tree opened in October featuring a miniature railway in its garden. 

TGI Friday’s UK appoints Sycamore as chief operating officer: TGI Friday’s UK has continued to reshape its management team by appointing Tom Sycamore as chief operating officer, Propel has learned. Sycamore stepped down as operations director UK and Ireland at PizzaExpress in the summer. He spent four and a half years at PizzaExpress after joining from Mitchells & Butlers, where he spent three years. Before the end of last year, Robert Cook-led TGI appointed Dan Staples as chief marketing officer and Suzanne Peacock as people and culture director, while chief strategy officer David Carroll left the business after ten years. Cook joined TGI as chief executive at the beginning of December with a remit to focus on growth through improved customer experience, operational excellence and accelerated evolution of the business. Last month the company’s backer, Electra Private Equity, reported TGI Friday’s had achieved growth in the past 12 months with like-for-like sales up 1.5%, total sales up 2.4% and Ebitda up 0.5%. Total Ebitda was £26.9m, while the company has net debt of £47.4m. Chairman Neil Johnson said: “We have made tangible progress in both our larger businesses, TGI Friday’s and Hotter Shoes. At TGI the new management’s focus on improving customer experience and operational excellence gives confidence it is on the right track to further develop the business and deliver profitable growth.”

Coaching Inn Group reports record December trading with like-for-likes up 4.5%: Coaching Inn Group has reported record festive trading with like-for-like sales up 4.5% for the five weeks to 31 December. The company saw net sales of £3,228,584 – a 7.1% increase on the previous year – in part reflecting the acquisition of the Bell Hotel in Stilton, which completed in the middle of the period. The last two weeks proved particularly strong, generating a like-for-like sales improvement of 7.7% during the main holiday period. The 16-strong estate achieved average weekly sales of £42,000 net per site during the period, with average sales rising to £49,000 during the final two weeks of the month. Chief executive Kevin Charity said: “Against a tough backdrop of some excellent sales figures last year, we were particularly pleased with the strong trading we delivered this year. Each site continued to show how central they are to the communities in which they operate, as well as the robustness of our business model with bedrooms again aiding the increase in sales with like-for-like room revenue up 10.3% in the final two weeks as our festive packages continue to prove popular.” The Coaching Inn Group, which is backed by BGF, completed a £22m refinance last month with which it hopes to increase its 16 strong estate through further acquisitions.

Pure to make airport debut: Healthy food-to-go group Pure is to make its airport debut with an opening at Gatwick this year. Propel understands the 21-strong group, in which Whitbread has a 51% stake, has lined up an opening in the airport’s North Terminal. Last year the Spencer Craig-led company opened its 21st site, in Liverpool Street Station. Pure opened at Unit 54, Broadgate Link, which became the fourth station site for the brand adding to venues in Waterloo, Victoria and London Bridge. Said Takhamt joined the business in August as its first chief operating officer following roles in operations and development at Pret A Manger, Itsu, EAT and Cojean.

Arc Inspirations reports 6% like-for-like sales growth amid record-breaking December: Arc Inspirations, the Leeds-based operator of a number of fast-growing brands, has reported a record festive trading period that included the biggest sales day and week in the group’s 20-year history. The company saw 6% like-for-like sales growth during the period, with total sales up 10.5% and improved gross margin to 74.5%. The performance followed a strong December 2018, which saw like-for-like sales rise 6.5%. Several of the group’s sites saw record weeks, with Arc’s three Manchester bars growing like-for-like sales by 12%. The company said the results showed its strategy of operating sites in “clusters” was “continuing to pay dividends”. The company saw net sales top £1m in consecutive weeks in December, while Manahatta in Deansgate was the stand-out performer in its estate, achieving net sales of £145,000 for the week ending 15 December. As reported by Propel last month, the group posted its biggest trading day on Saturday, 14 December, while New Year’s Eve saw an 11% increase in sales. Pre-booked sales grew during the period – up to 31% of total turnover from 24% the previous year. Chief executive Martin Wolstencroft said: “This success shows our differentiated proposition is attractive to customers seeking memorable experiences and underlines the opportunity for the business to continue opening sites in carefully selected locations in regional cities.” Arc operates 17 north of England venues mainly under its Banyan Bar & Kitchen, BOX and Manahatta brands. 

Ole & Steen hires former Chilango staffer as marketing director: Danish baker Ole & Steen has hired Katie Lister as UK marketing director. Managing director Simon Ward-Nicholson told Propel: “Katie is a very talented and experienced commercial marketing director who joins us from Chilango having held senior marketing roles at Byron and Starbucks. Katie will lead the commercial, marketing and food team in the UK, working closely with myself and our chief commercial officer in Denmark to grow the brand. We have a very exciting pipeline ahead with new openings planned in H1.”

The Piano Works reports like-for-like sales up 15% in December, plans third site: The Piano Works’ two 400-capacity venues in Farringdon and the West End grew year-on-year like-for-like sales by 19% to £9.2m net of VAT for the calendar year ending 30 December 2019. For the five weeks of Christmas, like-for-like top-line sales were up 15% to £1.9m, yielding a 32% net profit (Ebitda). Managing director Alan Lorrimer said: “We are very pleased with our continued growth this year, especially with the prophets of gloom around us foretelling a downturn. Our two non-stop live music venues continue to demonstrate our target market loves the concept of audience-requested music and the non-competitive, communally bonding experience of singing along with highly skilled musicians. We plan to open a third site and will continue to invest in our existing sites to ensure our customers’ experience remains differentiated and consistent.” Operations director Tristan Moffat added: “At the beginning of the year we created SingEasy within our Leicester Square site, a 100-capacity space where singing waiters metaphorically juggle serving food and drinks while leading our guests in a singalong. This year we’ve upgraded our sound systems, provided our musicians with vocoders, synths and drum pads to provide an authentic sound to current chart requests and installed low-light controllable cameras that will allow us to live stream and record our guests’ requests and reactions.”

Inn Collection Group acquires second Lake District site as part of buy and build plans: The Inn Collection Group has boosted its pubs with rooms portfolio by acquiring The Pheasant Inn in Bassenthwaite Lake, Cumbria, as part of its “buy and build” expansion plans. The 15-bedroom, 17th century coaching inn will continue trading before undergoing a full-scale redevelopment to fit the group’s eat, drink, sleep and explore brand. Inn Collection Group managing director Sean Donkin said: “We are delighted to start 2020 with this landmark addition to our growing portfolio. We search long and hard for sites that have extra special quality when it comes to location and offering for our customer base. The Pheasant delivers on every level. We will invest significant capital in this extraordinary venue as we broaden our customer base and long-term presence across the north of England.” The Pheasant brings the group’s portfolio to 12 inns across Northumberland, County Durham, Yorkshire and Cumbria. The company recently opened its debut venue in the Lake District, the Ambleside Inn in Ambleside, while work on the 40-bedroom, new-build Seaburn Inn on Sunderland seafront is set to begin this month as the group looks to more than double its portfolio of freehold pubs with rooms by 2022. 

Loungers to make Black Country debut after securing Wolverhampton site: Cafe bar brand Loungers has secured a former Topshop store in Wolverhampton for its first outlet in the Black Country. The city centre site in Dudley Street has been closed since April but will reopen under the company’s Lounges brand. Loungers is also due to open a Cosy Club in Nottingham on Wednesday, 29 January. The former Victoria Club casino site will be the largest for the brand to date. Loungers operates circa 160 sites under the Lounges and Cosy Club brands. 

SushiDog sniffs out second London site: SushiDog, which launched at Westfield Shopping Centre in 2018, has announced expansion plans across London starting with its first bricks and mortar site, which is due to open in Covent Garden in March. The venue is a 300 square foot unit on the corner of Tower Street and Earlham Street in Seven Dials. Danielle Leslie, a surveyor at agent Restaurant Property, acted for YOLO, the former dessert-only bar and seller of the site. SushiDog was founded by Greg Ilsen and Nick Goldstein in August 2017 and started trading at Westfield London in May 2018. A spokesman said: “We have been delighted with how our concept has worked at Westfield London. What’s been great to see is we appeal to such a wide range of demographic – from office workers to children. We have had a lot of demand to bring our concept to the Covent Garden area so we’re excited about opening our second store there in March. We’re looking to apply our bright and bold brand colours to make it warm and inviting for our customers!”

Caravan opens Strand coffee shop for seventh site: London-based restaurant and coffee-roasting concept Caravan has launched its latest store after taking over The Savoy’s Melba cafe in the Strand as part of its partnership with the hotel. The deal also sees Caravan supply coffee to all the hotel’s venues. Anne Lomas, The Savoy’s director of restaurants, said: “The new collaboration will solidify The Savoy as serving the leading premium coffee in London.” Active Partners-backed Caravan’s other London sites are in King’s Cross, the City, Exmouth Market, Bankside and Fitzrovia, while new concept Vardo launched in Chelsea last year. Graham Hollinshead, former managing director of Soho House joint venture Quentin Restaurants, joined Caravan as operations director in October. 

MasterChef finalist launches crowdfunding campaign to open central London restaurant: Sven-Hanson Britt, a finalist in MasterChef: The Professionals, has launched a £30,000 fund-raise on crowdfunding platform Kickstarter to launch a long-term restaurant and bar residency in central London. Britt plans to launch farm to table concept Oxeye at Melbourne Hall in Derbyshire next year and funds raised from the campaign will be used to launch a residency celebrating produce grown on the Melbourne estate. The venue will also feature a wine bar – Bar Rex. The pitch states: “Oxeye London is a farm to table restaurant celebrating produce grown on the Melbourne estate and from some of the best farmers and suppliers in the UK. Oxeye’s influences come from the kaiseki cuisine of Japan combined with British ingredients, tradition and cooking techniques. Oxeye Derbyshire is coming soon but needs to be built from the momentum of our London opening. We will hopefully keep London and Derbyshire running in tandem in 2021! Our challenge with Oxeye London and Bar Rex is to keep the energy and vibrancy of our new opening throughout the whole of 2020. We want to transfer this dynamism to Oxeye Derbyshire and a more permanent Oxeye London when we’ve finished with this residency.” 

Compass Group appoints chief marketing officer, chairman Paul Walsh to step down: Paul Walsh will step down as chairman and director of Compass Group to focus on his other business interests, the company has said. Walsh will remain chairman until his successor is appointed, with senior independent director John Bason leading the search. Walsh said: “It has been a privilege to serve for the past six years as chairman of Compass, which is a world-class business and a true British success story on the global stage. We have a strong and well-established chief executive in place and I will work to ensure a seamless transition to my successor.” Meanwhile, Compass Group UK and Ireland has appointed Ian Cranna as chief marketing officer. Cranna left Starbucks earlier this year after more than 15 years with the company including as vice-president marketing. Compass supplies contract catering to offices, schools, hospitals and sports centres and employs 600,000 staff worldwide.

Crussh rolls out retail range to 300 Sainsbury’s stores: Crussh Fit Food & Juice Bars is to roll out its retail range to more than 300 Sainsbury’s stores in the UK in May. The move follows the range’s debut in 61 Sainsbury’s convenience stores in London. The move is the next step of the healthy food and juice chain’s strategy to strengthen its convenience and food-to-go offering and expand into areas outside traditional high-street stores. The exclusive retail range includes Crussh health pots priced from £2.80 and wraps priced from £3.65, including a number of vegan and protein-based lines. Crussh chief executive Shane Kavanagh said: “We are thrilled customers will be able to buy our ‘fit food’ in Sainsbury’s stores from Exeter to Edinburgh, giving us a great opportunity to bring our food to new customers while providing something new and exciting for Sainsbury’s shoppers.” Crussh continues to operate its concessions site in Sainsbury’s Pimlico, which opened in 2017 selling its full range of ‘fit food’, freshly made juice and smoothies, and organic coffee.

Zia Lucia to make City debut next month for third London site: Zia Lucia is to open a City of London site next month for its third pizzeria in the capital. The brand, which operates restaurants in Islington and Hammersmith as wells as pasta concept Berto, also in Islington, will open a venue in Piazza Walk, Aldgate, Hot Dinners reports. Zia Lucia offers four types of slow-fermented dough – vegetable charcoal, wholemeal, gluten-free and traditional – alongside starters and desserts. 

Staycity reports 11% Ebitda rise, secures new €22.5m financing deal for expansion: Aparthotel operator Staycity Group has reported it expects turnover for the year to December to have grown 14% to €78m (£66m), with Ebitda rising about 11%. The year saw the group invest significantly in central functions to support the opening of 1,800 rooms in its secured pipeline during the next two years. The company also reported it had secured a new €22.5m financing deal with Dunport Capital. Chief financial officer Wayne Arthur said: “The year was a challenging one, particularly in the UK where confidence has been fragile due to Brexit uncertainty. Despite these challenges, we delivered a record like-for-like occupancy of 87.3% and are delighted to have signed a new €22.5m loan facility with Dunport Capital – after five years of fantastic support from Proventus – which has secured Staycity with a flexible, seven-year loan as well as significant interest savings and a supportive Dublin-based partner.” Staycity co-founder and chief executive Tom Walsh added: “I am delighted with the progress made in 2019. Not only did we deliver industry-leading occupancy levels, we’ve also gained our strongest ever guest satisfaction scores. We are on target to deliver revenues of more than €100m in 2020 along with continued profit growth. The new year will see us continuing to work towards our target of operating 15,000 apartments by 2024.” Staycity plans to open a 224-apartment property in Manchester in March and a 142-apartment building in Dublin in November. Late last year the company announced it would launch a property development joint venture, Realstay Developments, headed by investment specialist Frank Dowling. 

Bibendum sees WSET pass rates rise following new training approach: Drinks distributor Bibendum has reported its refreshed approach to teaching WSET has led to pass rates “well above the global average”. The company’s Level 2 pass rate for 2018/19 was 95%, compared with a global average of 90%, while Level 3 was 100% for tastings (global average 87%), 92% for multiple choice (89%), and 63% for written answers (59%). More than 80% of students passed with a merit or above. Bibendum’s new approach included mock exams and questions on the company’s Looop online training system. Head of customer training Julia Bailey said: “These results are testament to how hard all our educators worked this year and, of course, our students.” 

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