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Mon 20th Jan 2020 - Propel Monday News Briefing

Story of the Day:

Chopstix eyes further growth on back of strong end-of-year performance: Chopstix, the Asian quick service restaurant concept, is set for further expansion in 2020 on the back of a strong performance at the end of last year. The business, founded by Sam Elia and Menashe Sadik, has already secured four openings for the first half of the year – three for its core eponymous brand in the soon-to-open Skelton Lakes services near Leeds, Tower Hill in London and Liverpool’s Lord Street – plus a site in Cardiff’s St David’s scheme for sister concept Yangtze. Chopstix currently has 70 stores in its portfolio – 52 company-owned stores across its Chopstix and Yangtze brands and 18 franchise restaurants with Welcome Break in the UK and Applegreen in Ireland. The company is in legals on a further four sites, including two in central London as its looks to strengthen its estate in the capital. The continued expansion of the business comes after it secured a new £5m debt facility from Metro Bank in August, while it posted a 10.7% increase in like-for-like sales for the first 36 weeks of its current financial year boosted by a strong festive trading period. During that six-week period until 5 January, overall sales growth was 32%, with Chopstix like-for-like sales up 16.8%. The company has also completed seven major refurbishments during the past six months, with those sites experiencing an average uplift in sales of more than 30%. At the same time the company has strengthened its senior team with four appointments. Amanda Smyth, formerly of Fuller’s, has joined Chopstix as head of people; Jo McGovern, formerly of The Ivy Collection, has joined as financial controller; Lynn Flaherty, formerly of Robinsons and Greene King, takes up the role of head of recruitment; and Leah Henery, formerly of KFC and Pizza Hut, has joined as operations manager. Managing director Jon Lake told Propel: “After a very encouraging end to 2019, Chopstix is in a good position to secure further growth in the coming 12 months. We are fortunate to have such fantastic teams in place driving and supporting the Chopstix and Yangtze brands. They have achieved some amazing results this year and these have continued over the Christmas trading period. With a strong pipeline of sites and a number of operational improvement projects to be implemented, 2020 is set to be a very exciting year for the business and we’re delighted our new ‘fab four’ are joining at this time.”

Industry News:

Propel Multi Club Conference open for bookings, Dodo Pizza to present, two free places for operators: The first Propel Multi Club Conference of 2020 is open for bookings. The full-day event takes place on Thursday, 5 March at the Millennium Gloucester hotel in London. David Sweeney, UK head of business development for Dodo Pizza, which runs more than 500 stores eight years after being founded, will set out how the company, which plans to become the UK's second largest pizza delivery company, has set about creating a new pizza offer, underpinned by advanced and innovative technology. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at
TRG shares fall after UBS expresses concern over menu price inflation: The Restaurant Group's shares dropped by 7.5% or 11p on Friday (17 January) after UBS published a ‘Sell’ note, claiming dishes at TRG’s (TRG) Frankie & Benny’s and Chiquito chains were too expensive. The company, which also owns Wagamama, cut its prices a couple of years ago amid worries families were choosing to eat at other restaurants with better offers. However, after a comparison of past and present menus, analysts at the Swiss bank reckon the average cost of a meal at Frankie & Benny’s has gone up by 4% since the reset. The prices of some items, such as margherita pizzas, have jumped by more than 10%. “We believe this will continue to mean these brands struggle to appeal to their core audience of the family value segment of the market and, as a result, expect further market underperformance in 2020,” UBS analyst Heidi Richardson stated. It was also noted TRG faces another £27m in increased costs this year – following the same level of cost increases last year, meaning this year's cost increases will be harder to mitigate. UBS argued the 25% increase in the value of the company's shares in the past few months is hard to justify. Meanwhile, TR continues to build its Wagamama site pipeline – it has unveiled a plan to convert its Frankie & Benny's site in Crawley, based in Crawley Leisure Park, to Wagamama. 
Tourism hotspots crack down on alcohol-fuelled holidays: Spain's Balearic Islands have passed a law banning pub crawls and happy hours in three popular tourist destinations in a bid to crack down on alcohol-fuelled holidays. Restrictions apply to the tourist hotspots of Playa de Palma and Magaluf in Majorca and Sant Antoni in Ibiza. The regional government said it was the first law of its kind in Europe. The new law includes a string of measures aimed at cracking down on so-called "booze tourism", where visitors are encouraged to binge drink. Organised pub crawls can no longer be advertised or held in Playa de Palma, Magaluf or Ibiza's West End. The law also bans happy hours and says party boats can no longer advertise in the three areas or pick up or drop off tourists there. Alcohol vending machines, free bars and adverts for alcoholic drinks are also forbidden, while authorities said shops selling alcohol must close from 9.30pm to 8am. The new regulations have also outlawed “balconing”, where people jump from hotel balconies, often into swimming pools. The practice has been linked to a number of tourist deaths and injuries. Authorities said those caught taking part in the activity would now be forced to leave their hotel and could face fines. Local businesses caught violating the new law could face fines of up to €600,000 (£510,000) or be shut down for up to three years. The regional government said the new measures would “fight excesses” and “force a real change in the tourism model of those destinations”.
Sustainability key to hospitality’s prosperity but not all customers willing to pay for it: The UK’s hospitality sector is working hard to promote sustainability – but there’s room for improvement if it wishes to continue to lead the way, according to a new report. The sixth UKHospitality/CGA Future Shock report also revealed that despite customers being increasingly interested in sustainability, not everyone is prepared to pay for it. More than two-fifths (40.6%) said they would pay more for ethically sourced food and drink, while more than one-quarter (25.2%) would pay a premium for environmentally friendly packaging and 22.7% for a reduced carbon footprint. However, the largest proportion (43.4%) said none of those things would justify paying more. The report highlights the work currently being undertaken by businesses to promote sustainability. Crucially, it also examines areas in which the sector must do more to respond to increasing customer demand and possible future legislation. Food waste is also identified as a priority among industry leaders as well as the importance of technology to tackle the issue. UKHospitality chief executive Kate Nicholls said: “Sustainability is arguably the key issue of our time. It will become more important and hospitality needs to lead efforts to promote sustainability yet further. This urgency makes our latest Future Shock arguably the most important to date.” Karl Chessell, business unit director, food and retail at CGA, added: “Our research for this edition of Future Shock highlights the mounting importance of sustainability in consumer choices and behaviour. The environmental impacts of restaurants, pubs, bars and hotels are under intense scrutiny and all operators will need to demonstrate a genuine commitment to sustainability as we enter the new decade. As the case studies in this report show, hospitality businesses of all sizes are actively engaging and investing in this urgent issue – but there’s much more work to be done.”

Foodservice prices continue to ease but fruit category sees large increase: Prices across the foodservice sector dropped to their lowest point for seven months in November, the latest Foodservice Price Index from CGA and Prestige Purchasing has revealed. The index has fallen by four points since August, pushing overall prices to their lowest since April 2019. The new report forecasts more falls in the next few months. However, operators need to carefully monitor contrasting trends in the key foodservice categories of vegetables and fruit, the index suggested. Good growing conditions for seasonal vegetables such as onions and potatoes have resulted in the vegetable category of the index falling both month-on-month and year-on-year. But the fruit category has recorded large price increases, with previous overproduction in Spanish citrus crops leading to low tree energy in 2019 and yields for farmers that were down 60% to 80% – forcing prices upwards and leaving the category with year-on-year inflation of 16.2% in November. Prestige Purchasing chief operating officer Phil McGuinness said: “The slowing of inflation should provide some reassurance to purchasers for the year ahead. With 2020 looking likely to bring falls in multiple categories, along with certainty around Brexit bringing 12 months of stability, we are likely to see further reductions within the index.” CGA client director food and retail Fiona Speakman added: “After an extended period of turbulence in foodservice prices, the signs of stability revealed in the latest index are a relief. It’s particularly pleasing to see an easing of inflation in the vegetable category, but rising fruit prices and the imminence of Brexit are reminders of the need to stay vigilant on trends and purchasing strategies in 2020.”
Hospitality Action launches mental health awareness campaign: Industry charity Hospitality Action has launched a mental health awareness campaign. The organisation has joined forces with Compass Group UK & Ireland to launch a year-long focus on protecting the mental health of workers. The programme aims to dispel the stigma attached to mental health problems in the hospitality industry and provide support to those who need it by equipping operators with the knowledge, resources and tools they need to safeguard against situations that could result in a mental health crisis. Compass Group will also champion the campaign among its own workforce. The business will create a network of mental health ambassadors to ensure it is embedded at every level of the organisation. The first steering group meeting will take place on Tuesday (21 January), with senior industry figures developing tools to help the sector tackle the issues causing workers’ mental health to suffer. Hospitality Action chief executive Mark Lewis said: “In the past two years Hospitality Action has seen a marked increase in cases involving a mental health problem and sadly we have seen the aftermath of far too many suicides – particularly those of young men. Mental health problems and self-harm are currently a major problem in businesses across the UK. We want to act quickly to provide practical, simple information and tools that are easy to implement and can help break the taboos that surround talking about mental health.”
Job of the week: COREcruitment is seeking a commercial director on behalf of a mid-sized fresh food hospitality business that’s looking to expand. The individual needs to have experience in the restaurant sector and quick service restaurant market as well as business-to-business sales and food product account management. Ideally they will have a proven track record of scaling a business and breaking into new markets. The position offers a salary of between £100,000 and £150,000. For more information or a confidential chat, email

Company News:

Oakman Inns appoints Koula Achillea as new finance director: Oakman Inns and Restaurants has appointed Koula Achillea, formerly of Butlin’s and Warner Leisure Hotels, as its new finance director, Propel has learned. Achillea spent almost six years as finance director at Butlin’s. She replaces Joseph Evans, who the company announced was leaving Oakman as its chief financial officer this year, after six years with the business. Last week, Oakman refinanced the debt on two of its properties – The White Hart in Ampthill, Bedfordshire; and The Royal Foresters in Ascot, Berkshire. Cynergy Bank provided circa £11m in newly negotiated loans for the two properties – £3.172m for The White Hart and £7.809m for The Royal Foresters. Both loans were previously being charged at a higher interest rate and the new deals significantly reduce interest charges. Last month, Oakman, which owns and runs 24 sites, reported like-for-like sales increased 7.3% for the 15 months ending 30 June 2019. Turnover for the period was £46.7m, while site Ebitda was £8.6m and group Ebitda was £4.2m.

Gordon Ramsay set to launch concept roll-out in the UK: Gordon Ramsay is set to launch a concept roll-out in the UK. Propel revealed last year Ramsay had formed a joint venture with Lion Capital to ramp up his presence in the US. The deal will see Lion Capital, which formerly backed Wagamama and Loungers, invest $100m in five concepts during the next five years. Propel understands one new concept will be Ramsay’s Kitchen, with Los Angeles mooted as the first destination. At the time it was thought Ramsay would team up with Lion or another private equity firm to set up a similar joint venture in the UK. Propel understands this has moved closer to fruition and could see Ramsay launch multiple sites across several concepts in the UK. It’s thought Bread Street Kitchen would be the main growth concept but other concepts such as Street Burger/Pizza could also play a part. Propel also understands the chef hasn’t ruled out opening one or two more Lucky Cat restaurants in the UK, with an international launch for the Asian-focused concept on the cards too.
Mother Clucker heads to west London with White City opening, exploring franchise opportunities: Buttermilk-fried chicken specialist Mother Clucker has headed to west London for its latest site and is exploring franchise opportunities, Propel has learned. Mother Clucker has opened a 50-cover restaurant – its largest to date – in White City, at the White City Place development. The launch adds to sites at Flat Iron Square in London Bridge; Truman’s Brewery in Brick Lane; BackYard Cinema in Wandsworth; Clerkenwell, where Loughton-based Wing Shack is operating a pop-up; and at Stansted airport in partnership with transport hub foodservice specialist SSP. It also operates out of the Deliveroo Editions kitchen in Whitechapel. Ross Curnow, who founded Mother Clucker in 2013, said the White City site showed the company’s intention to continue growing despite the challenging market. He said: “We are stoked to be in the west of London. We have a great community here already, the offices of White City Place are filled with awesome people! We’re thrilled to continue to open more owner-operated sites as well as exploring franchises and delivery in 2020.” The group is chaired by John Upton, former managing director of natural fast food brand Leon and ex-member of McDonald’s UK leadership team.
Carluccio’s receives offer for St Christopher’s Place flagship site: Carluccio’s, the Mark Jones-led chain, is considering the sale of its flagship St Christopher’s Place restaurant in central London, after receiving an unsolicited offer of more than £1m for the site. Propel understands the site has five years left on its lease to run and Carluccio’s has a right to renew for 20 more years, something the business was expecting to take up. However, after receiving the unsolicited offer, the company has hired property firm Davis Coffer Lyons to evaluate the site, which is understood to trade very well, in order to get a “fully rounded view” ahead of any lease renewal. The circa 70-strong Carluccio’s, which underwent a company voluntary arrangement in 2018, has closed a number of sites over the past few weeks as part of actively managing its estate. It recently sold its site in Oxford to Lussmanns, as it was too small for its Fresca remodel programme and was believed to be a loss maker for the business. It has also closed its site in Brighton after Propel understands it received an offer from the landlord, which was too good to refuse. As previously revealed by Propel, the site has been let to Five Guys, on what is thought to be a new longer lease. In December, Carluccio’s told Propel it had seen sales uplifts of between 15% and 35% from sites refurbished with its Fresca design. The company now has seven Fresca refurbished sites – in Chester, Newcastle, Dawson Street Dublin, Heathrow Terminal 5, Canary Wharf, Bluewater and Richmond. The refurbishment programme was paused for Christmas, and will start again with the new lower capex version at the company’s Waterloo station site this quarter.

Daniel Batham reports turnover and pre-tax profit boost: Midlands-based brewer and pub operator Daniel Batham has reported turnover increased to £6.2m for the year ending 30 June 2019, compared with £6m the year before. Pre-tax profit was up to £1.7m from £1.6m the previous year. Gross profit margin remained at 68%. The number of employees increased during the period to 116 from 111 the year before. A dividend of £500,000 was paid. The company operates 11 pubs.
Greene King trials shuffleboard club to tackle loneliness among young people: Brewer and retailer Greene King is trialling a partnership with shuffleboard company Shufl, which will see pubs host free weekly shuffleboard nights. As part of Greene King’s No One Alone campaign, which launched in November to tackle loneliness, Shufl Club will launch in select pubs in Chiswick, Guildford, Southampton, Swansea and Worthing. A recent YouGov survey found almost one-third of people aged between 22 and 37 said they “always” or “often” feel lonely, while two-fifths (20%) of millennials believe they “have no friends”. Greene King communications director Greg Sage said: “Loneliness affects all ages and we think it’s important to provide an opportunity for young people to meet others at a fun, engaging evening in our pubs. As part of No One Alone, we want to provide more opportunities for individuals to come to our pubs to connect with others, build relationships and gain a sense of inclusion within their community.” Shufl commercial manager Ben Minter added: “Our goal is to establish the club as a regular feature and we look forward to supporting the communities around the selected Greene King pubs.”
Bitters ‘n’ Twisted Venues shuts Bodega Cantina site in Sutton Coldfield, expects 2020 to be year of consolidation: Birmingham-based multiple operator Bitters ‘n’ Twisted Venues has shut its Bodega Cantina site in Sutton Coldfield and expects 2020 to be a year of consolidation. The company, founded by Matt Scriven, opened the venue, which was its fifth under the South American concept, in Birmingham Road almost two years ago. Scriven told Propel the lease had come to an end and he had taken the decision not to renew. He said: “It wasn't really working out for us so rather than sign a new lease we've decided to exit. We've managed to deploy half of the staff from Sutton Coldfield to our Bodega Cantina site in Birmingham and one of our other city venues, Buffalo & Rye.” Scriven said the other Bodega Cantina sites were doing “pretty well”. He added: “We're not looking at openings this year – we're going to concentrate on looking after our sites that are performing.” Bitters ’n’ Twisted Venues also operates Bodega Cantina sites in Worcester and Leicester along with Birmingham venues Island Bar, The Jekyll & Hyde, The Rose Villa Tavern and The Victoria. Its Bodega Cantina site in Derby closed in 2018.
Pret reveals biggest Veggie Pret menu launch: Pret A Manger has announced its biggest Veggie Pret menu launch to date, which includes 19 new recipes – 15 of them vegan. All new dishes will be exclusive to Veggie Pret and launch in shops in London and Manchester on Tuesday (21 January). Three new categories are part of the launch, which builds on the exclusive Vegan Classics range. The introduction of poké bowls, smoothie bowls and Buddha bowls will “offer more choice to customers throughout the day”. Pret global head of food innovation Hannah Dolan said: “This launch is an opportunity for us to establish Veggie Pret’s menu, offering customers something different to what they have seen so far. We wanted to put a real focus on creating new vegan dishes so we looked at where we could use vegetables and fruit to deliver flavour rather than mock meat or fish.” Launched in 2016, Veggie Pret grew to seven shops in 2019 with three further openings planned for early this year. At the Propel Operation Directors’ Conference in September, Pret chief executive Pano Christou said the company planned to have 25 to 30 Veggie Prets open by the end of 2020 as it looked to become the “number-one destination for meat-free food on the go”. Pret bought 90-strong EAT in June last year and plans to convert “as many sites as possible” to Veggie Pret.
Yauatcha to make its Middle East debut: Al Khozama, a leading developer of luxurious commercial properties in the Kingdom of Saudi Arabia, and Hakkasan Group have partnered to open the first Yauatcha in the Middle East. They will open the brand at Riyadh's newly refurbished Al Faisaliah Mall – Mode. Grant MacPherson, senior vice-president of restaurants for Hakkasan Group, said: “Yauatcha isn't just another Chinese restaurant – it's blazing a trail on exemplary cuisine. We recognise Saudi Arabia’s a well-travelled nation with high expectations for unique experiences. Yauatcha really embraces the innovative, forward-thinking aspects of modern Cantonese culture and has a fresh and immersive take on fine dining, complementing Saudi Arabia's sophisticated palate.”
Britvic to overhaul executive pay after criticism: Britvic will overhaul its executive pay policy after being criticised for excessive bonuses ahead of its annual general meeting (AGM), The Mail on Sunday has reported. The newspaper stated: “Chief executive Simon Litherland was paid £3.45m over the year to September 29 2019, while new finance chief Joanne Wilson earned £732,000 after working at the company for just three weeks. Wilson's payout was largely a £706,300 ‘golden hello’ to compensate for the loss of incentives she would have received from Tesco, where she was chief financial officer at its customer data arm Dunnhumby. Litherland's £623,500 base salary was boosted by £2.66m of ‘performance related pay’, plus a £153,400 pension contribution and other benefits. Shareholder advisory firm Glass Lewis said it has ‘severe reservations’ and urged shareholders to vote against the firm's remuneration report at its AGM on 31 January 31 .Glass Lewis said: ‘Our concerns are heightened by the generous incentive arrangement... with remuneration running consistently in advance of corresponding levels at the company's peers’.”
Zia Lucia to open fourth pizzeria next month as it makes City debut: Zia Lucia is to open a City of London site next month for its fourth pizzeria in the capital. Founders Claudio Vescovo and Gianluca D’Angelo will open the venue in Piazza Walk in Aldgate on Friday, 7 February. The site, which will have a seated capacity of 60 including outdoors, will feature a rustic wooden pizza bar and an open kitchen with a hand-crafted pizza oven. Zia Lucia offers four types of slow-fermented dough – vegetable charcoal, wholemeal, gluten-free and traditional – alongside starters and desserts. The brand operates restaurants in Islington, Hammersmith and Boxpark Wembley as well as pasta concept Berto, also in Islington.
Former Annabel’s club manager launches Indonesian concept at Camden Market: Pino Edwards, a former club manager of Richard Caring’s private members’ club Annabel’s, has launched an Indonesian restaurant concept at Camden Market. Edwards has opened Pino’s Warung in the Asian Alley space, reports Hot Dinners. He aims to showcase his home-country cuisine with three signature dishes – bakso, a 24-hour simmered bone broth with meatballs made from premium cuts of meat; gado gado – an Indonesian salad with blanched vegetables, fried tofu and fresh tempeh served with Edwards’ home-made peanut sauce; and chicken satay made using organic chicken and cooked over a Japanese charcoal grill. Asian Alley underwent a revamp during the festive period, doubling in size and expanding the range of food on offer. Now taking over two arches, the alley features food from Malaysia, Thailand, China, Korea and Japan.
Stonegate offers LaLigaTV as part of UK-first pub company partnership: Stonegate Pub Company has started broadcasting Spanish football at its sports-led venues as the first UK pub group to collaborate with La Liga on in-venue promotions. LaLigaTV was introduced to the UK last week through the Spanish league’s broadcast partnership with Premier Sports. Elliott Cantor, sports digital marketing manager at Stonegate Pub Company, said: “To be the first pub company in the UK to offer extensive coverage of LaLigaTV is a fantastic opportunity. We pride ourselves on our innovative initiatives and continuous improvement to our offer. Recent research has shown more than one-quarter (26%) of UK consumers are already avid fans of La Liga football – this is a huge market for us. Sport has always been an important part of our strategy and we are dedicated to investing in our sports pubs.”
Mission Mars to open Leeds site for pizza concept Rudy’s next month: Neapolitan pizza concept Rudy’s, which is owned by Mission Mars, will open its fifth site next month, in Leeds. The company, which opened its latest site in Birmingham last summer, is converting the former Evans Cycles unit in New Station Street. The 100-cover restaurant will create 40 jobs. Rudy’s opened its debut site in Ancoats, Manchester, in 2015 and has since added a site in the city’s Peter Street and a venue in Liverpool. Rudy’s makes its dough on-site each day, taking 24 hours to double ferment and 60 seconds to cook. The business was acquired by Mission Mars, which is behind Albert’s Schloss, in 2017.
International property and investment business seeks operator to run debut hotel: International property and investment business Jahama Group is to develop its first hotel and is seeking an operator to run it. The company has secured pre-planning consent from South Lanarkshire Council for a 100-bedroom hotel in Clydebridge on the outskirts of east Glasgow. The scheme is earmarked for a redundant ten-acre site to the east of sister company Liberty and its Clydebridge Steelworks. Once built, Clydebridge Hotel will also feature a restaurant, cafe, bar and fitness club. Jahama Group chief executive Dilip Awtani said: “For this project we are also keen to partner with branded operators that could work with us to turn the hotel in Clydebridge into a popular destination.” Jahama Group is part of a collection of industrial companies that form the GFG Alliance. Sanjeev Gupta, founder and executive chairman of the GFG Alliance, said: “We recently received permission to build a zipwire leisure facility in the Highlands at Kinlochleven so the tourism industry is becoming an increasingly important part of GFG’s Scottish portfolio.”
TGI Friday’s crowns UK bartending champion: Rob Stephens has been crowned TGI Friday’s UK Bartender Champion 2019. Stephens, who has worked for the company for more than 20 years and is from Basildon in Essex, will now represent the UK and challenge the world’s best bartenders in TGI Friday’s World Bartender Championships, which will take place in the US in March. Stephens’ win came at the end of a competition that began in May and judged entrants on challenges including overall service, quality of cocktails and technique.

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