James Brown, the former BrewDog Bars chief executive, and since last October, the chief executive of the newly renamed Prezzo Italian, is so ready for the elephant-in-the-room question, he answers it before I can ask it. “One of the most influential sector investors said to me ‘are you mad’? And I think that was probably the feeling of most people in the sector when the news broke that I was going to head up this business!” His decision was both professional and personal. The former was the need for a new challenge with something of scale. The latter, with two young children under three, was the desire to be closer to home after years of country and continent hopping, overseeing his former company’s growing international bar footprint. Six months on, we are sitting inside what is the first significant step in taking on the challenge of rejuvenating the 25-year-old, 96-strong, Cain International-backed brand – the first Prezzo Italian, just off London’s Kensington High Street – and Brown has no regrets about the decision he made. 

 

He said: “I was coming up to a decade at BrewDog and I was starting to think about what I wanted to do next. My time at BrewDog was great – running around the world, opening new sites, bringing together new teams – but I’ve got two young kids, and especially when the older one got to three, I wanted to be closer to home rather than being in Vegas for two weeks.” Brown is too modest to say it, but I understand that he had more than a few options presented to him when word that he was leaving BrewDog began to spread. Prezzo was not on his radar initially – “I didn’t think it was the right fit for me based in my knowledge of the business” – until he was pressed by a recruiter to meet Cain International co-founder Jonathan Goldstein. A “really robust conversation” followed. “I gave him my frank and honest view of what I saw as a customer, because that’s all I saw at the time. And he shared some numbers with me, and again I gave a frank view of them. We started getting on, and we continued to chat, and then I decided to take the role.” 

 

Cain International acquired the business at the end of 2020. Following a restructure and the closure of 47 unprofitable restaurants, Prezzo returned to profitability in 2023, leaving the business with 96 sites, and according to Brown, “without a tail”. Despite this, Brown says he was starting from a low base. “It was clear Prezzo had been under-invested,” he says. “There’s lots of competition on the high street, and the casual dining sector needed some energy. It gives us an opportunity to do things a bit more radically than others, to think differently. You have to focus on what you can do, not what others are doing. You’ve got to have a strong vision for what you want to do and then just move forwards. We have a well-capitalised ownership structure, and we all want to make this business really great again. I don’t have a situation where we’re risking lots of baked-in profitability to do that, because, in reality, it’s a relatively underperforming business.”

 

It will help that Cain is not seen as a typical private equity backer and is not overly focused on fund cycles, and in most cases, it’s Cain’s own money being put to use. Brown says: “Cain wants to see it done right, is my perception. That’s why I joined. I joined because it has a passion to do things right. What I got from when I first met the team was people who cared about the money, but my gut feeling when I spoke to them was if I offered it a big cheque and bad reputational damage or no cheque and a great reputation, it really cares about its reputation.”

 

And what about the reputation of Prezzo? Did the brand still have relevancy? Brown admits he has been on a journey on that front. He says: “On day one, when I took the first meeting, I said to just start again. Is it a good business plan to go to 250 sites and get down to 96? No, but that doesn’t really impact me, because I’m now looking forward with 96 and I don’t really have a tail. If you’ve gone through three restructures, you shouldn’t still have loss-making sites. So, I have this unique position where it’s distilled down to the best leases, but it still has under-invested interiors and brand proposition. I have visited all 96 sites. What I discovered when I went to these towns was that they were all different. So, when I came in, my original outsider, uneducated thought was it was tired, and therefore to change it. But that would then require us to change it in so many different ways, you’d have to have four or five different formats and concepts.”

 

This led to a conversation around making the business a multi-brand operation, which is something that may be explored in the future, but as Brown says: “Whatever happens going forward, I have to fix Prezzo, that’s job one. Maybe in some sites, Prezzo fits the middle or the upper middle market, and then you’ve got some really nice Prezzo sites where we probably could get much higher spend ahead and spend more on capex that we can go really far on. It could be more premium. In other times, where even Prezzo playing in the middle ground is probably a bit too expensive, we need to work through that. We have a vision that you can still be a good neighbourhood restaurant, no matter what location you are in, if you are able to be flexible.” To help with that, Brown has reduced the menu size by 20 dishes to stop customers having “choice paralysis”.

He says: “The unspoken element of choice paralysis is that when customers end up having this after-effect, which is disappointment over whatever they choose because they think they wanted the other thing. One of my frustrations in the business was that we were turning up like a rigid box everywhere we went. One of my learnings from BrewDog was we empowered the manager to buy local beer and shape their business to the local community. My vision for this business is to do that in some way. The core menu will be everywhere, but the specials will be chosen by the manager and the chef locally, and they will basically choose them today. The way I look at the menu, the proposition, is that we’ve got to give the managers the ability to flex it. I operate from the founding principle, when I talk to managers, that they know their business better than me. Often, when I visit sites, I will ask them 20 questions at once, and it often comes back to their frustrations around being in a box. So, my plan is to design an infrastructure in a way the head office works, where we facilitate them having creativity and optionality to build a product that fits their community. Each site eventually is going to have its own local logo, charity and specials.”

 

But before that is the first step on the new journey for the brand, the debut Prezzo Italian in Kensington, complete with new blue signage (there is a hint of a Pizza Pilgrims in the look), fresh interiors, the aforementioned new menu and new tagline – “home to the Italian classics”. Brown tells me the business has invested £150,000 in the site, picked for its location – its closeness to the Prezzo team; its previous condition – “it needed a lot of work”; and its size – “when you do something small, you can also experiment a bit more”. Brown continues: “It is all about what learnings we can take from this one, what can we do better? It will help us build a formula for what we can do next.” A further four restaurants will receive investment in the coming weeks – in Cambridge, King’s Lynn, Chelmsford and Aberdeen – with a further 15 expected to be completed by the end of 2025. So, who is the Prezzo consumer? Brown says: “Because Italian food is so accessible, it is for everyone. Our biggest consumer base is female, over 40s, but then in some towns where we operate, we have older, retired couples, people with older kids that are empty nesters. But then if you go to another town, it’s different again, so it really does depend on the town.”

 

Brown and Cain are making these investments at a time when the sector is increasingly under cost pressures. Not that that is holding Brown’s plan back. He says: “There’s lots of reasons not to do things, but I suppose I’m coming at it from the fact that I want to do things differently to our competitors. I know that those pressures exist in my organisation. They also exist in other organisations, but I like pushing through them in order to get to better places where we can get better hospitality experiences. It’s not rocket science. It’s good food, good service and a nice environment.” Brown has also been pleasantly surprised by the affection that the business still generates. He says: “This, again, goes back to whether Prezzo should exist or not. I was surprised by the amount of customer love for the brand. Despite the chipped walls and toilets being broken. 

“I’ve never received a written letter from a customer, either a complaint or positive, in my entire time at BrewDog. I get two or three a week here. And these are people who are coming into our restaurants that have been under-invested. Imagine what it could be like when we do invest. The other thing I was really surprised by was the amount of passion for the business from the teams working here. Head office was taking too much of the spend, and my resolute desire was to transfer the spend into investment from the centre to the restaurants. I think people are excited about having investment happen in the restaurants and having a plan to do it. My fundamental starting point as a central office and cultural offices is we have to operate from the starting point – that the manager we’ve hired, we’ve got to trust them that they know the community well. So, the first thing I do is ask them what do you want to do? What dish do you want to bring back? If you had £100,000, what would you spend it on to improve the restaurant?”

 

With more refurbishments on the way, there are also plans to return to the expansion trail, and up the investment in training and development. It is a start on a much longer journey, but Brown has put in place a good team around him to make sure Prezzo Italian has the best possible chance to navigate whatever is thrown at it – including Adam Lindop, formerly of ASK Italian and Caffe Nero, as operations director; and Mark McCulloch, formerly of Pret A Manger and YO!, as chief marketing officer. Early signs are encouraging. Even before the rebrand, the group’s like-for-like sales increased 9% in the first quarter of 2025, with “robust growth across sales, profit and customer engagement”. Brown says: “We want this business to last. I see heavy responsibility to be a custodian when a business has survived 25 years. I now want it to be a more agile and dynamic business.”

We are a few weeks into the new world. Although the impact of the Budget was well signposted, the sector now finds itself in a strange period: only too cognisant of the triple dose of bad news via the rise in national minimum wage, the change in the percentage on national insurance contributions and the thresholds. 

 

However, right now, what is less clear is the positive improvement that may come through from demand, which is one possible effect of the national minimum wage increasing (and beyond that, a rise to many people’s wage to “maintain the gap”). This structural wage inflation is happening across various industries, and the scope for this to drive more positive demand conditions is there, but yet to be determined fully. It is also worth noting that, in part due to a rebasing of utility costs, household disposable income in general is recovering, with Office for National Statistics data showing an increase in non-essential spending in recent months.  

 

To try and understand the immediate impact on company financials, it is worth examining the listed hospitality groups’ expectations on Ebitda margin, contrasting projections from before and after the Budget. 

 

What we found was a reduction in margin equating to losing almost a percentage point, which is feeding through to a 5% to 6% decline in absolute profit figures for the sector. Unfortunately, that has weighed on these companies’ share prices, which, at 18 March, had reduced by an average of 14% since immediately prior to the announcement of the Budget last October. For clarity, this share price analysis was conducted before President Trump launched his trade tariff offensive on the world and set shares tumbling across all markets (to avoid this noise in the data).

 

Most importantly – and the question we are asked a lot, given how much margin management and profitability feeds through to the ability to raise finance or transact in investment and M&A scenarios – is what are businesses doing to mitigate the impact?  

 

To understand this, we worked through an example site P&L, looking at what would potentially happen to its profitability if no mitigating actions were taken following the impact of the April changes. At the outset, we can see increases coming through in gross margin, given suppliers are also experiencing this increase in cost and necessarily passing some on to their customers (with the potential to be even greater depending on the longer-term impact of US tariffs). 

 

We modelled the blended total increase in direct labour at between 9% and 10%, after taking into account the likely staffing model at multi-site operators, which include a combination of full-time and part-time staff, which means a business is potentially losing about three percentage points in site margin here. There are other costs, including changes in property costs and rents, to feed through too. When these elements are factored in, you can see that operators are potentially facing losing up to five percentage points of site margin, which could mean a third reduction of absolute site profit, if no action is taken, which is stark. 

 

Of course, no operator in the sector is sitting on their hands. So, what are people doing? First, and unsurprisingly, we're seeing a further wave of menu price rises. We think, on average, operators have put price increases through of around 3% – although it should be noted that this is very much an average. We are seeing different pricing strategies being adopted in terms of quantum and timing of any increases. Some groups are choosing to hold prices and promote value with the aim of taking market share. On the procurement side, accessing cost savings are possible but tougher to deliver, given the supply chain is in this moment still quite squeezed. 

 

More widely, operators are once more reviewing their site portfolios, evaluating the new economics of their sites – what's viable and what's not – and we are already seeing some further estate consolidation taking place. As costs increase, we see a trend of needing larger sites in order to maintain acceptable levels of profitability. As ever, there is a focus on labour productivity, but operators are very mindful of not simply stripping out labour to the detriment of guest satisfaction. The name of the game is much more around the scheduling of labour to match new demand patterns. It is as much about having more of the team in the site during peak times to maximise revenues as it is about reducing labour in the quieter shoulder periods. We are also seeing increased interest in the role that technology can play here.

 

The other strategic route that is gaining traction with corporate groups is a fresh look at central costs, and what is really needed to enable a business to run a quality operation without unnecessary (and ever increasing) costs. In this area, it is important to adopt a zero-based approach to assessing what is actually required from the centre to support the front-line business, and not just strive for a percentage reduction in what is already there. 

 

As ever, there are no simple solutions out there that on their own solve the problem. It’s not easy, and these changes to the cost base have probably set operators back 12 months in terms of profit growth. But there are still levers to pull that can help ease the undoubted pain being felt. The biggest lever of all, of course, and one somewhat beyond the sector’s control, is the consumer. Operators will be hoping that as the sun starts to shine, that hospitality consumers will be minded to loosen their purse strings. The one consistent we see is that consumers will always flock to high-quality hospitality – those businesses that do this well will continue to thrive, albeit it might take a little longer to hit the profit forecasts that were set 12 months ago.    

From Soho to the south east, characterful pubs are outperforming glass boxes – and there’s a reason behind this movement. The UK pub sector is no stranger to reinvention, but what’s happening now feels different. In London and beyond, a new generation of high performing, food focused pubs is reshaping the industry. Welcome to the era of the “gastropub 2.0” – a movement defined by experience, quality and a deep respect for characterful buildings.

 

As a hospitality focused real estate agent, I see sector trends develop in real time, and one is afoot in the pub world with the evolution of the gastropub, which has emerged in the post-pandemic world of the last few years. One of the clearest trends right now is the pivot away from polished, anonymous retail units and toward authentic, idiosyncratic spaces – particularly heritage pubs with soul, history and built-in atmosphere.

 

A key difference between the humbler gastropub (a term coined in the 1990s by two London pub owners) and the “gastropub 2.0” is that while the food offer of the former was generally seen as complementary to the pub, the latter has seen the dining element become the more dominant component in the relationship, with customers travelling from afar for the experience, more akin to dining at a fashionable Michelin-star restaurant than visiting a traditional pub. Nevertheless, this isn’t just about better food in pubs, which has, of course, been done historically by celebrity chefs such as Gordon Ramsay and Heston Blumenthal. It’s about a wider cultural shift in how people consume, socialise and choose where to spend their time and money. 

 

We’ve seen this shift playing out in parallel across other parts of the food and beverage world. The rise of artisan coffee culture, often housed in converted railway arches, corner units or even repurposed sheds, proves that customers value uniqueness over uniformity. Grab-and-go concepts like shacks, kiosks and market stalls have found huge success precisely because they reject the sterile homogeneity of modern retail. Argent’s Coal Drops Yard redevelopment in King’s Cross and British Land’s regeneration of Canada Water, both in London, have seen this trend propelled into large-scale developments, with a focus on heritage buildings over soulless glass boxes. That same appetite for authenticity is now feeding into the pub world, where best-in-class operators are creating environments that feel warm, personal and distinctly uncorporate.

 

And it’s working. The Public House Group’s Pelican in Notting Hill and Hero in Maida Vale, Guy Ritchie’s Lore of the Land in Fitzrovia – currently fully booked until mid-2026 for its mouth-watering Sunday lunches – and the cult-favourite Tamil Prince in Islington (helmed by head chef Prince Durairaj and Glen Leeson) all combine an elevated food offer with historic, personality-rich buildings. Meanwhile, Crisp Pizza at The Chancellors in Hammersmith proves that if the quality’s right, customers will queue out the door – just like they do at the hottest street food pop-ups. It’s increasingly apparent that high-end/experiential dining in pubs is becoming one of the defining cultural phenomena of the hospitality sector in the 2020s.

 

Even in Central London, the “gastropub 2.0” is thriving. The Devonshire in Soho, co-founded by Oisín Rogers and Flat Iron’s Charlie Carroll, has brought wood-fired cooking, characterful interiors and exceptional Guinness to a pocket of town once dominated by chain dining. Further east, The Knave of Clubs in Shoreditch (brainchild of James Dye, who runs the Camberwell Arms, Franks and Bambi, and Benjy Leibowitz, who was at JKS and The Nomad in New York City) has transformed a faded restaurant site into a vibrant rotisserie pub full of energy and purpose.

 

Beyond the capital, the Lazy Lobster in Whitstable, a seafood haven nestled in a 19th century Kent pub, has recently opened to show this trend isn’t confined to cities. Groups like Greene King (with its Hickory’s brand), Heartwood Collection, and Young’s are doubling down on food-led formats that combine high-quality menus with a strong sense of place. Greene King recently announced ambitious plans to grow Hickory’s by ten sites per year to triple the size of the group by 2030. 

 

Why now? The pandemic and subsequent inflationary pressures have changed how people spend and socialise. Dining and drinking out is no longer routine – it’s an occasion. So when customers go out, they want more than just a meal – they want an experience worth sharing. Pubs, especially those in historic or architecturally interesting buildings, deliver that in spades. There’s also a rising rejection of bland. Consumers want places that feel real. That’s why we’re seeing demand shift away from the glass-box units in new schemes – built for flexibility but lacking soul – and back to buildings with a story. A Victorian pub with its tiled floor and wood panelling offers a richness of context that no unit with a retail use class and curtain walling ever could.

 

Social media amplifies this too. A beautifully plated roast in a centuries-old pub, caught in golden hour and paired with a well-pulled pint, plays far better on social media than a meal in a featureless shell. Influencers like Eating With Tod (1.8 million followers on Instagram and arguably Britain’s most powerful food critic/influencer) are shaping food culture through storytelling – and pubs, perhaps unexpectedly, are providing some of the best content to influence not only a domestic audience, but also tourists visiting from further afield who are eager to visit authentic British pubs with an elevated food offer beyond bland fish and chips. 

 

What we’re witnessing isn’t just a revival – it’s a repositioning. The “gastropub 2.0” isn’t an anomaly – it’s the next logical step in the evolution of British hospitality: rooted in heritage, elevated by quality and powered by experience. And with many of the early post-pandemic pioneers now preparing to expand into ever more prime sites, along with new entrants stalking the same spaces seeking to introduce new concepts, the momentum is only growing. Various deals are in the pipeline to create new food-focused concepts in traditional pubs across the capital and beyond.  

 

In a world that’s increasingly craving connection, character and craft, pubs – those most British of institutions – are proving once again they’re more than up to the challenge. One thing is for sure, there’s never been a better time to experience such an eclectic array of dining options in a pub setting, and I’m sure you’ll all join me in raising a glass to anything that helps to preserve and innovate the great British pub.

Taking flight: Propel revealed last July that the US brand Dave’s Hot Chicken had signed a franchise agreement with Azzurri Group, the ASK Italian, Coco di Mama and Zizzi owner, to open 60 locations across the UK and Ireland. The Steve Holmes-led business opened in the former Fratelli La Bufala site in London’s Shaftesbury Avenue for the UK debut of Dave’s Hot Chicken, and it is fair to say it has been a hit judging by the queues it has been generating. Holmes previously told Propel that the business was close to securing UK sites two and three for the US brand. Diary understands this has taken a step closer and the next two Dave’s openings will be in Manchester and Birmingham, as the business immediately looks to test the brand outside the capital, with one being the conversion of an existing Azzurri-owned site. 

 

Drink up: At the end of December 2023, McDonald’s launched the first trial site under its beverage-led concept CosMc’s in Bolingbrook, Illinois. It always felt there was a larger play at work, especially as the specialty beverage category is seen as a $100bn opportunity. McDonald’s chief executive Chris Kempczinski, speaking after the brand’s first quarter earnings call, said the business had discovered some “interesting learnings” through CosMc’s rollout thus far (there are currently five, including four in Texas, to go along with the original Bolingbrook site). He said those findings better informed McDonald’s understanding of consumers’ customisation preferences and interests in emerging beverage categories. So, later this year, in partnership with franchisees, the company will launch a beverage test in the US in some of its existing McDonald’s restaurants, to incorporate menu items inspired by CosMc’s. More details are forthcoming, Kempczinski said, as the company continues to test, learn and position itself for growth in the space.

 

Ready to uncork: In February, Vagabond Wines, which was acquired out of administration by Majestic last year, announced four senior hires as it bolstered its leadership team to position the nine-strong business for future growth. The company said the changes, a combination of promotions and new appointments, are designed to help Vagabond secure properties for new bars, successfully launch in new locations and attract new customers. Diary understands the first of those new bars could open close to London’s St Paul’s Cathedral, with the business linked to a site in Paternoster Square. A Vagabond spokesperson tells Diary: “Vagabond is currently exploring a range of potential new sites across Central London and beyond, as part of a renewed growth strategy backed by Majestic. While we’re not in a position to confirm specific locations just yet, we're actively identifying opportunities where Vagabond's unique mix of wine, education and experience would be a strong fit. This expansion reflects Majestic's ongoing commitment to investing in Vagabond and supporting its long-term development through strategic, sustainable growth.” 

 

Game theory: Epic Bars and Clubs, the venture from Mark Shorting and Nigel Blair, two of the founders of the Fever Bar business, currently operates circa 25 sites across the UK. Last year, having acquired several sites from Rekom UK, Epic told Propel that it was on the expansion trail and looking to become the UK’s largest chain of bars and nightclubs. At the same time, Diary understands it is looking at ways to evolve its existing estate, including the launch of two new formats. The first is believed to be called Barcadia, a competitive games bar with arcade machines, table football and air hockey. The second is called Brown Street Garden or BSG, which is an open-air bar with a pizza kitchen. The new formats are being introduced to the company’s The Chapel site in Salisbury.