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Tue 28th Jan 2020 - Propel Tuesday News Briefing

Story of the Day:

Pod administrators begin investigation into directors’ conduct: Administrators of Pod, the 22-strong healthy eating operator acquired by Azzurri Group, are investigating the conduct of its directors. A progress report by administrators Damian Webb and Allan Kelly, of RSM Restructuring Advisory, revealed the investigation was “ongoing”. The report stated: “In accordance with our statutory obligations, we have filed the appropriate documentation in relation to the conduct of the directors. We can advise you, following our initial assessment, further investigations were undertaken in relation to certain areas of concern that were raised by shareholders and other parties. Our investigations are ongoing.” The majority of the Pod estate was sold to Azzurri, owner of the ASK Italian, Zizzi and Radio Alice brands, in a pre-pack administration in June 2019 for a total of £1.6m. A total of £750,000 was paid on completion with the remainder deferred subject to the successful assignment – or new lease granted – of a further seven leasehold properties. In the reporting period, three of those properties have been assigned with £425,000 accordingly paid by Azzurri. A further assignment with a consideration of £25,000 was completed after the period. The remaining three properties are in negotiation. The £1.6m Azzurri paid was more than £1m below its original offer that failed to gain shareholder approval. Azzurri has started to convert some of the Pod sites to Coco di Mama. As previously reported, secured creditor NatWest was repaid the £387,000 it was owed in full. Preferential creditors are owed £20,000 and expect to be paid in full while unsecured creditors, who are owed £2.8m, are expected to receive a dividend.

Industry News:

Sign up to Propel Premium and save money: Readers signing up to the new-look Propel Premium Club can save money by receiving a pair of free tickets to one of four conferences in 2020. Subscribers will be able to choose to use a pair of free tickets to one of the following conferences – The Delivery Conference (Tuesday, 21 April), The Finance and Investment Conference (Thursday, 14 May), The Casual Dining Summit (Monday, 12 October) or The New Concept Conference (Monday, 19 October). The normal cost of two tickets to these events is £490 plus VAT for operators and £690 plus VAT for suppliers. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, regular exclusive videos, discounts to attend Propel conferences and events, and regular columns from Mark Wingett. Subscribers also receive access to our database of multi-site companies, which has grown to 1,500 businesses. Propel managing director Paul Charity: “Our new-look Propel Premium Club means subscribers can actually save money by signing up.” An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email anne.steele@propelinfo.com

Peter Backman – all-important Christmas period ‘not as good as it could have been’, coffee market showing signs of overcapacity: Industry analyst Peter Backman has said sector trading in the final quarter of 2019 and the all-important Christmas period “wasn’t as good as it could have been” – storing potential issues. Backman’s latest quarterly briefing states the market is in “real decline” and while the food-to-go sector is in a “good place” despite a “difficult” festive season, the coffee shop market is showing signs of overcapacity. Backman said: “The last quarter, being the Christmas quarter, was very important for those sectors that rely on the festive season’s trade to provide significant turnover and profits – and that includes principally full-service restaurants and pubs. In fact, business in the period wasn’t as good as it could have been and stored potential issues concerning available ‘cash’ to support businesses through the tricky first few weeks of the year. The food-to-go/limited-service restaurant sector is less reliant on the festive season but it too had a difficult time. The market has stabilised in nominal terms, which means that after allowing for inflation at about 2%, the market is in real decline. Promises made during the election are likely to have limited impact on expenditure in the short term. On a positive note, pubs have continued to perform well for the past 18 months and increased demand has focused on alcohol sales. Food sales were up in the past quarter but haven’t risen as rapidly as wet sales. This continued strong performance suggests the big shake-out in the pub sector, which has lasted for two decades, may be coming to an end. The pub operators that remain standing are in tune with what the core market demands. The torrid time the restaurant industry has suffered over the past few years has continued during the past few months driven by lack of consumer confidence and clearly defined offers, falling standards of food and service, poor reputation caused by issues such as allergens and, of course, rising costs for property, food and labour. Delivery is seeing a boost from the emergence of delivery kitchens, which are likely to expand and transform the sector and will probably have an impact on the grocery retail market too. My view is all these conditions will continue during the next two quarters, possibly further. While uncertainty relating to Brexit has, for now, been resolved, the economy is slowing and as long as global economic conditions remain in a state of confrontation and trade wars, there will be little or no change to the outlook for UK plc in general and the foodservice sector specifically.”

Street Food Union launches Bayou Bar takeover scheme to help startups: Bayou Bar, the Tooting-based joint venture between Street Food Union and Slingin’ Po’ Boys headed by Nick Willoughby, is hosting a takeover scheme that helps startups. The initiative allows entrepreneurs to take over Bayou Bar in Tooting Broadway Market to create their own pop-up experiences for a day with the support of the venue’s team. The site has already hosted Syrian brunch concept Mo’s Eggs and salt-beef sandwich specialist Rubens Reubens, which took over Bayou on Sunday (26 January). A third takeover will take place on Sunday, 9 February by plant-based Mexican street food concept PEP Kitchen. Street Food Union mentors traders and offers them training on finances, product buying and festival events. Willoughby said: “We are incredibly excited about allowing new food businesses to host their takeovers with us at Bayou Bar and hope these two are the first of many. From experience, we know how hard it can be to set up a food business and how many different things need to be considered to make it a success. We’ve seen entrepreneurs’ businesses flourish and grow but we have also seen them fail. By establishing these pop-up takeovers, we hope to ensure as many people’s ideas become reality and new traders go into the journey with open eyes and the knowledge and practical support to make it happen.”

Vegan pioneer Bindu Patel passes away: Bindu Patel, chef owner of vegan restaurant Sanctua in Leicester, has died suddenly aged 37. Opening her plant-based restaurant in April 2019, she was named a “vegan pioneer” by Olive Magazine for her low-waste, sustainable approach to cuisine. In November, Sanctua was named Asian restaurant of the year in the Great Food Club Awards and best vegan and vegetarian restaurant at the Asian Curry Awards. Before opening Sanctua, Bindu Patel worked at Michelin-starred restaurants Gymkhana, Trishna and Le Gavroche. She had also been a lawyer and farmer. George Shaw met Bindu when representing the Asian Catering Federation (ACF). He said: “Bindu was a talented, intelligent woman who personified the key messages the ACF wanted to communicate with its members – to move away from cheap curry-house cooking, offer authentic, regional healthy dishes, and employ more women in the kitchen. She will be greatly missed.” Bindu Patel leaves a husband, Neil, and three children aged eight, seven and five.

Company News:

Pizza Pilgrims secures Camden site for convertible restaurant and training academy: Pizza Pilgrims, founded by brothers Thom and James Elliot, has secured a site in Parkway, Camden, for a convertible restaurant and training academy, Propel has learned. The company, which recently opened its 12th site, in London’s Victoria, has acquired the 40 Zero site from Various Eateries for an opening next month. During the day the site will house a 20-cover restaurant and two training rooms, transforming in the evening to a 100-cover restaurant. As well as training staff, the space will also host talks by experts from inside and outside the sector. The Elliots said they hoped the academy would champion the hospitality industry and provide people with a range of skills to pursue a long-term career. Thom Elliot told Propel: “The academy will offer training to anyone who wants to build a career in the sector, whether that’s someone who is homeless or an ex-offender as well as delivering training for Pizza Pilgrims employees. We also want to put on talks for people in the sector but outside our own business. Moving into a ‘village location’, we know we won’t need to offer a traditional restaurant space during the day, with delivery set to play a bigger part, so we can concertina the space from 20 covers in the day to 100 in the evening.” Elliot said the site could also offer seating that would allow trainees to overlook the kitchen but also customers to watch sports on a retractable screen. The company operates 11 sites in London and one in Oxford. Stonebrook London acted on the Camden deal.

Former Fuller’s group people director joins Bill’s: Bill’s, which is backed by Richard Caring, has appointed David Hoyle, formerly of Fuller’s, as people director, Propel has learned. Hoyle joins the 78-strong Bill’s after nine years at Fuller’s, where he worked as group people director. Before that Hoyle held senior roles at Compass Group and the Department for Transport. His appointment follows the departure of Odette Schwartz, who joined Bill’s as people director from Wahaca at the start of last year. Baton Berisha, managing director of Bill’s and The Ivy Collection, told Propel: “David has a wealth of experience that will be invaluable at such an exciting part of our journey. On behalf of the entire team at Bill’s I would like to thank Odette for her hard work and wish her luck for her future endeavours.” Bill’s has reshuffled its management team this year with executive chairman David Campbell and managing director Sarah Hills stepping down from the business. Berisha, already managing director of The Ivy Collection, took on management of Bill’s with immediate effect.

El Mexicana set for expansion after seven-figure funding deal: Mexican burrito brand El Mexicana is set for expansion after securing a seven-figure funding deal from alternative lender ThinCats. El Mexicana is set to expand its network of restaurants from 17 to 22, starting with a site in Doncaster. Managing director John Coverly told BDaily: “We are excited to work with ThinCats as part of our ambitious growth strategy.” Stuart Thompson, regional director of business development at ThinCats, said: “This is an excellent business with an exciting product run by two experienced businessmen. We’re delighted to support this growth and continue to support small and medium-sized enterprises with capital to pursue their ambitions. We look forward to working with the El Mexicana team again to support its continued success.” The El Mexicana menu features twists on classic Mexican dishes such as tacos and burritos as well as burgers, chicken wing roulette and cocktails. El Mexicana was founded in 2011, with its first restaurant opening at Meadowhall shopping centre in Sheffield.

Bird opens first site under new backer to kick off 2020 expansion plans: Fried chicken and waffle chain Bird has opened the first site under its new backer, Crown Partnership. The restaurant has opened in Electric Avenue, Brixton, and marks the brand’s sixth outlet and first in south London. It is the first of several openings planned in 2020 with Bird looking to expand in the capital and beyond. The 40-cover Brixton site sees the brand incorporate new design features to reflect the “ever-changing and growing restaurant market”. The site serves Bird’s signature fried chicken and waffles alongside Bird Brew lager and local craft beer. Bird said as demand for its meat-free alternatives continued to grow, more menu items would be added. Bird has reported three consecutive years of like-for-like sales growth, which the company attributed to a “focus on consistency and listening to customers”. Crown Partnership acquired Bird in August as part of a pre-pack administration. 

Hubbox to open ninth site, at Cheltenham’s Brewery Quarter, as Alchemist confirms April launch: Hubbox, the south west-based burger and barbecue concept led by Richard Boon, has signed to open a site at The Brewery Quarter in Cheltenham. The venue will launch in the spring for the brand’s ninth site. In September, Propel revealed Hubbox had secured further equity investment from chairman Alex Reilley and Simon Henderson, of Provenance Investment Partners, and appointed its first full-time finance director, Chris Hugo. Private equity fund Provenance made a £2.2m investment in the then five-strong business in January 2017. Meanwhile The Alchemist, the 18-strong Simon Potts-led bar and restaurant concept, has confirmed it’s also due to open its site at the development, in April. The moves come as The Brewery Quarter announced it saw more than 5.25 million visitors in 2019, its busiest year so far and a 5% year-on-year increase. The development also enjoyed a record number of visitors in December, more than 500,000. Nikki Kontarines, asset manager of Martin Commercial Properties, which manages the scheme, said: “We stride confidently into 2020 with some incredible visitor numbers behind us and some exciting openings ahead.” Other operators at The Brewery Quarter, which relaunched in 2017 following a £30m regeneration, include Mitchells & Butlers brand Son of Steak, Loungers’ Cosy Club, Brewhouse & Kitchen, Five Guys, Nando’s and Prezzo. Hubbox is also believed to have secured sites for 2020 openings in Cardiff, Barnstaple and Plymouth.

Rogan eyes pub sector return: Two Michelin-starred chef Simon Rogan has told Propel he retains a passion to open another pub – but this time on his own terms. Rogan, who is chef proprietor of eight restaurants including L’Enclume in Cartmel, Cumbria, and Roganic in London, said adding a pub to his burgeoning portfolio was definitely on his mind. He said: “Pubs offering traditional pub fayre are an obvious choice. That’s what we’d look to do. There are five pubs in Cartmel and I’d like to do a pub in the village as I have a great love of pubs offering well-cooked food.” Running a successful pub would be an opportunity for Rogan to erase the memory of a previous encounter that ended disappointingly – he took on the Pig & Whistle in Cartmel. He said: “It was dying a death and I thought I’d have a crack at it – but it was a tied pub. The building had issues but they wouldn’t let us change anything. I’d do a pub again – but not if it’s tied.” Rogan cites Fuller’s as a “top-end operator” in the pub food field and he is linked to the company through its sponsorship of the UK’s team in the Bocuse d’Or world chef championship. With Rogan the current Bocuse d’Or president, the move presents Fuller’s with an opportunity to expose its chefs to Rogan’s skills. Rogan said: “It isn’t only about the competition, it’s about raising the profile of chefs in the UK. Fuller’s has a lot of chefs we can help make better cooks. Perhaps they’ll also get the chance to become candidates in the competition in the future or become upper-end chefs. We’ll be doing what we can to raise the standards of them all.” Rogan’s concentration of outlets in Cartmel is almost akin to Rick Stein in Padstow – with L’Enclume, Rogan & Co, Aulis Kitchen and 16 accommodation rooms in the small village. However, he said he had become less visible now as his success helped to attract other operators to the area. He said: “There’s now a wine bar, brewery, cheese shop, upmarket deli and gift shop. We call it Team Cartmel and I’m proud to have been a catalyst. We’re part of an expansion of Cartmel that attracts visitors from around the world.” Even though he is interested in returning to the pub sector, Rogan said the most likely expansion would involve more versions of Roganic and his chef’s table concept Aulis, which both have outposts in Hong Kong. He told Propel international expansion of Aulis with an overseas partner was “on the cards”. Our full interview with Simon Rogan will appear in the next edition of Propel Quarterly magazine, which is due to be published in March. To order a free copy, email anne.steele@propelinfo.com

KFC serves customers through security wiring to prevent attacks on staff: Staff at a branch of KFC are serving customers from behind security wiring to protect them from being attacked. The restaurant in Chelmsley Wood in Solihull has introduced the security measures to stop intruders getting behind the counter. Employees now serve food from behind metal rods bolted from counter to ceiling, with gaps wide enough to serve a family chicken bucket. The measures were introduced after a girl leapt over the counter and struck a member of staff, reports Birmingham Live. Several fast food restaurants in the Midlands have moved to protect staff and customers in recent years. In 2018, McDonald’s and KFC branches in Walsall town centre started employing bouncers on the door.

Taco Bell UK to launch value menu this week with items starting from £1: Mexican restaurant brand Taco Bell is to launch a “craving value” menu across its UK estate on Thursday (30 January), with items starting from as little as £1. The permanent menu will offer eight items including a cheesy roll-up, fries or nachos with a nacho cheese dip for £1. The £2 options will include a crispy chicken taco, while customers can opt for a £5 Chalupa Box, which includes a chalupa supreme, a taco, fries, cinnamon twists and a soft drink. Taco Bell Europe general manager Jorge Torres said: “During a time when value means the most, we’re excited to be able to offer our fans even more flavourful options.” Earlier this month Taco Bell made its West Country debut by opening a site in Plymouth, the 43rd Taco Bell in the UK. There are more than 425 Taco Bell restaurants across 27 markets outside the US, with the goal to expand the brand’s international presence to 9,000 restaurants by 2022.

Stray’s secures former Patisserie Valerie site in Lincoln for fourth outlet: Independent coffee and live music venue operator Stray’s is to open an outlet in Lincoln for its fourth site. The company has secured the former Patisserie Valerie venue in High Street in a deal brokered by agent Banks Long & Co. Stray’s will invest more than £150,000 in the site ahead of an opening in the spring. Stray’s launched its first site in Newark in 2003, opening a second outlet in Oakham and with another set to launch in Stamford in March. Co-owner Mat Short said: “We know our brand is ideally suited to Newark and we see a synergy with Lincoln, where we’re confident we can build a loyal customer base in a city where people love to live, shop and support independents that use local suppliers and create local jobs. These are large premises in Lincoln High Street so they will take several weeks to fit out in our quirky style.”

Star Pubs & Bars reports 10% rise in licensee applications: Heineken-owned Star Pubs & Bars has reported a 10% rise in applications to run its pubs and an increase in the percentage of licensees on substantive leases during the past 12 months. The announcement follows a 12.5% increase in applications in 2018. The company said it also saw a higher level of interest in leasing pubs generally in 2019. Traffic for its recruitment website was up 49%, with more people accessing it from mobile phones, while its pub open days saw record attendance levels – up between 80% and 90%. More multiple operators also took on pubs in 2019. Star Pubs & Bars recruitment manager Hance McPherson said: “Entrepreneurial spirit in the licensed trade is alive and kicking. Operators can see the opportunities well-invested pubs offer and are keen to partner with pub companies that have a clear business strategy to help them deliver long-term growth. We’re launching a new advertising strategy putting licensees at the heart of our campaign, showing the myriad roles they do daily while highlighting key aspects of our support.”

Bobo Social to make London return at Elephant Park: London high-end burger and small plates concept Bobo Social will return to London next month. Having been housed in Charlotte Street until 2019, founder Mike Benson is bringing the concept to Elephant Park, the £2.3bn regeneration project being delivered by Lendlease and Southwark Council. The restaurant will open in Sayer Street on Monday, 10 February offering burgers, steak, small plates, cocktails, craft beer and wine. 

Burger Priest to open Stratford site: Burger Priest, the church-themed burger restaurant concept launched by Bar Sport founder Scott Murray, is opening a site in Stratford-upon-Avon, Warwickshire. The company will launch the venue at Bell Court after agreeing a deal with owner Blue Coast Capital. Burger Priest will occupy the unit opposite Italian wine cafe Veeno, joining all-you-can-eat, pan-Asian buffet chain Kungfu in recently signing a contract at the leisure complex. The Burger Priest restaurant will have room for about 40 diners and offer outdoor seating. A spokesman for the brand told the Stratford-upon-Avon Herald: “We are excited to open the next restaurant in our planned expansion for 2020 at Bell Court. The new development is high quality and a perfect fit for a new growing brand such as ours.” Burger Priest restaurants feature seating in the form of church pews, while diners select their meals from hymn-board menus.

Fine-dining restaurant London Stock opens at Young’s brewery development: Modern fine-dining restaurant London Stock has opened at Ram Quarter, the redevelopment of Young’s former brewery in Wandsworth. London Stock has taken a 2,333 square foot unit on a 15-year lease in a restored listed brewery building. Led by Le Cordon Bleu-trained chefs Assem Abdel Hady and Andres Bernal, the London Stock team has worked at two Michelin-starred restaurants such as Umu and Dinner by Heston, and one-starred restaurants Nobu, Pollen Street and Hind’s Head. The 80-cover London Stock celebrates the “best of British ingredients” and offers a seven-course tasting menu, three-course lunch menu and a special vegetarian section. The London Stock website states: “Gastronomes can choose to dine in the main restaurant or at the intimate chef’s table, sampling the seasonally changing menu.” St John’s Hill-based Story Coffee, which was founded by Sof Alam and Jo O’Sullivan, has signed a 20-year lease to open a 1,411 square foot cafe and wine bar at Ram Quarter for its third site.

Aperitivo-led bar launches in Edinburgh: An aperitivo-led bar has opened in Edinburgh. Alex and Rachel Palumbo and Andrew Keams have launched Hey Palu in Bread Street. The venue pays homage to Italian cocktail culture with a traditional aperitivo menu, bar snacks and decor reminiscent of 1930s Italy. Hey Palu is split into two areas – the Campari bar and the Martini space – while there is also an off-licence. The drinks menu focuses on cocktails alongside wine, beer, cider, spirits and alcohol-free alternatives. The food menu has a sharing focus with platters and small bites. The Palumbos worked together at Salt Room in Brighton, while Keams and Andrew Palumbo met in Edinburgh while working for Compass Group.

JKS Restaurants to open third Hoppers site, in King’s Cross next month: JKS Restaurants, the London restaurant group founded by Jyotin, Karam and Sunaina Sethi, is to open a third site for its Hoppers concept, in King’s Cross next month. The restaurant will launch in Pancras Square on Tuesday, 11 February with a menu featuring new bar bites, seafood grills, beachside snacks and dishes exclusive to the venue. The centrepiece will be an iron-clad concrete island bar complemented by terracotta-toned floors and cast iron-framed lanterns in the main dining area. The bar will be much larger than at Hoppers’ sister sites in Marylebone and Soho, offering cocktails and beer on tap. Sunaina Sethi said: “With a bigger bar at King’s Cross, we’ve had scope to expand Hoppers’ beverage offering. There will be plenty of options.” Hoppers Restaurants director Karan Gokani added: “It has been great to see London embrace Hoppers since we opened in Soho four years ago and we look forward to continuing the journey in King’s Cross.” JKS Restaurants also backs Michelin-starred Trishna in Marylebone, Indian restaurant and bar concept Brigadiers in the City of London, and leading concepts such as Bao. Its portfolio also includes delivery brand Motu and Iranian-influenced restaurant Berenjak.

The Curry Leaf Cafe closes Brighton station site: Brighton-based The Curry Leaf Cafe has closed its site at Brighton station, blaming rising costs and competition from big chains. Founder and commercial director Euan Sey opened the street food and craft beer kiosk at the station four years ago. Its two restaurants in the city – in Ship Street and Upper St James’s Street  – remain open. Sey, who launched the business in 2014, told Brighton & Hove News: “We would have loved to keep the operation going but sadly rising costs and increased competition from the large chains made continued trading at that location unsustainable. The restaurant and street food sides of the business have always been separate and the two cafes are thriving despite the difficult climate the casual dining sector faces. We plan to turn our full focus on making them even more successful while exploring potential sites for our first Curry Leaf Cafe outside Brighton.”

Edinburgh-based coffee shop to open second site, next month: Edinburgh-based coffee shop Fortitude is to open its second site in the city. Fortitude has been operating in York Place since 2014. Now founder Helen Coburn will open a second site, at former coffee and cycle shop Ronde in Stockbridge next month. The new site will offer a “simple” food menu of breakfast, brunch and lunch options. Coburn told the Edinburgh Evening News: “It has taken us a long time to get to this point but we’re so excited by this project. This cafe will give us a bit more space to explore new menu ideas. Our aim is to serve our full range of speciality coffee in a relaxed and welcoming space.”

North of England-based holiday park operator gets go-ahead for third site: North of England-based holiday park operator Callaly Leisure has been given the go-ahead for a new development at Widdrington in Northumberland for its third site. Chevington Castle Holiday Park will be built on a 256-acre site east of Widdrington Moor, creating 130 jobs. It will include 275 static caravans, 200 pitches for touring caravans, an entertainment building, cafe, outdoor play area and nine-hole golf course. A lake at the site will be used for watersports, while a small beach will also be created, reports Insider Media. Callaly Leisure’s other sites are Riverside Rothbury in Rothbury, Northumberland, and Cottage & Glendale in Port Carlisle, Cumbria.

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