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Morning Briefing for pub, restaurant and food wervice operators

Wed 30th Apr 2014 - Propel Wednesday News Briefing

Story of the Day:

British Street Food in talks with private equity investors: British Street Food, the company that acts as a marketing and promotional platform, connecting street food to street foodies, has begun talks with private equity investors. There are an estimated 10,000 traders making their living by selling food on the streets of Britain. The annual revenue from street food in the UK is over £600 million, and growing at 20% per year but, currently, the market is fragmented. A British Street Food source told Propel: “The opportunity exists for us to benefit from our strong reputation with traders and the industry to provide cohesion. Because of our years of involvement, we know about the exciting new bloods before anyone else does – the next MEATLiquor, The Pizza Pilgrims and Pitt Cues of tomorrow.” British Street Food is currently working with Land Securities and SSP, two blue chip clients, putting street food traders into new high-profile retail environments such as Euston station in London and Trinity Kitchen in Leeds. The company is led by founder Richard Johnson, the award-winning journalist, who is currently judging the Street Food category in the BBC’s Food and Farming Awards. The company runs the British Street Food Awards, which now has six regional heats, to promote excellence in the street food sector. The source added: “The British Street Food app is light years ahead of anything else out there, using trading information updated by the traders themselves, and benefits from behavioral, marketing and location data which makes the business more comprehensive, interesting and engaging. Investment in the app will enable us to develop it for cashless payments to speed up service on the street.”

Industry News:

Street food guru to present at Propel 3 July Multi Club Conference: Street food expert Richard Johnson, the architect of the “game-changing” street food offer at the Leeds Trinity shopping centre, will present at the Propel Multi Club Conference on Thursday 3 July. He will look at the rise of street food, the key current trends and how established operators can benefit from the street food revolution. Johnson is the street food columnist for The Guardian, the founder of the British Street Food Awards and the author of Street Food Revolution. The Propel Multi Club Conference, to be followed by the Propel summer party in the evening, is now open for bookings – operators can claim two free places each. A full-day conference will be followed by the summer party, to include go-karting, a BBQ, the top live covers band the All Stars (which includes Simply Red’s guitarist and Rod Stewart’s bass player) and karaoke. To secure places or get more information, email Jo Charity on
Luke Johnson – boards, including mine, need more female executives: Sector investor Luke Johnson has argued the case for more female executives on board, including those of companies he owns. In his Financial Times column today, he writes: “I was interviewed on television last week and was asked why we had no women on the board of Patisserie Holdings, the company we plan to take public next month. It was a fair criticism. We are looking, and if there are any suitable candidates, please drop me a line. We did offer a non-executive role to an impressive female candidate – but her (male) boss said she could not accept it. There are compelling reasons to appoint more women leaders. This perspective is not political correctness in action, but pure economics. Women make most purchasing decisions; they also have the most financial assets. So they are probably the majority of customers for a high proportion of companies. Moreover, if all senior executives are men, as is so often the case, do management really know how their key customers think? Boards devoid of female insight are surely lacking true knowledge of their markets.”
Insolvency Service reports increase in liquidations in the first quarter of 2014: The Insolvency Service has reported that there were 3,721 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the first quarter of 2014. This includes 1,072 compulsory liquidations in 2014 (non-adjusted) and 2,649 creditors’ voluntary liquidations (on a seasonally adjusted basis). This was an increase of 4.8% on the previous quarter, and 4.9% more than the same quarter in 2013. The number of compulsory liquidations (non-adjusted) increased by 53.1% on the last quarter and 10.2% on the first quarter of 2013. This large increase compared to the previous quarter appears to be because of an unusually low number of compulsory liquidations in October to December 2013: the data for January to March 2014 is in line with otherwise fairly stable figures seen since 2012. The number of creditors’ voluntary liquidations (seasonally adjusted) was down 7.1% on the previous quarter but up 2.9% on the corresponding quarter of the previous year.
West Norfolk Council looking to launch floating restaurant plan: West Norfolk Council is looking to work with a restaurateur to establish a floating restaurant next to King Lynn’s Custom House. The scheme is backed by local restaurant operators including James Lee, who has re-developed the Hanse House to create the Rathskeller bar and bistro, along with an indoor market. He told the local newspaper: “I would welcome this boat and wouldn’t mind running it myself. I would not consider it competition, but a help.”
East London food festival to celebrate chilli peppers: East London is to host a two-day festival dedicated to chilli peppers, The London Evening Standard has reported. Among the chefs taking part in Chilli Chilli Bang Bang, on 9 and 10 May are Thomasina Miers, Martin Morales, Tom Parker Bowles and Giorgio Locatelli. The Dalston Yard festival will feature peppers from around the world, chef demonstrations, fiery street food and a spice market. Food stalls will include Mexican food from Wahaca, including pork pibil tacos served by Miers, Indian by Rola Wala and Roti Chai, Sichuanese from Bar Shu, Thai from Som Saa, and Japanese from Nanban and Yum Bun. Tickets cost £15, or £10 early-bird, which includes three drinks, hot sauce and a “chilli notes” festival guide. For information visit
US teen spending on eating out doubles in less than decade: A survey of teenage spending habits in the United States has found that spending on eating out has doubled as a percentage of total spend since 2003.The investment firm Piper Jaffray surveyed 7,500 teenagers about their shopping habits and found that 42% of the overall budget was split equally between restaurant and retail trips. Starbucks was revealed as the favourite restaurant brand, followed by McDonald’s, Chipotle, Olive Garden and Taco Bell, while Nike remained the top-selling fashion brand for girls and boys. In comparison, in 2003 almost twice as money was invested by teens in fashion over eating out.
Colliers – investors starting to snap up pubs in the south: Canny City investors are building funds to buy up surplus pubs in prime areas of the south as the hospitality sector emerges from three decades of doom and gloom. That’s according to Colliers International hotels director Peter Brunt, who said the fast-recovering sector was now being seen as a prime investment territory. He said: “Even previously hard to shift premises outside the top locations are attracting increased attention from commercial property investors. Operators across the West Country are telling us that revenues are finally showing some real growth. Buyers need to recognise that values are likely to rise with them so now is the time to step in.” 
Three Costa Coffee sites opening a week in the UK: Whitbread is opening three Costa Coffee sites a week, with a target to have 2,200 sites by 2018 – it currently has 1,755 outlets. The company will also add a further five stores to its existing six trial sites in France in the coming year.
Deutsche Bank leisure analyst Geof Colyer: “We have used the Propel Info Blue Book data for much of our sector break down analysis.” Leisure analyst Geof Colyer, of Deutsche bank, has produced a note that examines the market share of the UK’s largest sector companies. He said: “Propel Info produces a detailed list of the top 200 or so companies that make up the pub and restaurant space. It is a movable feast year on year, as more groups achieve critical mass or just appear on the radar through publicity in the media. We have used the Propel Info Blue Book data for much of our sector break down analysis.” The Propel Info Blue Book provides turnover and profit figures for the UK’s 200 largest companies, looks at profit conversion percentages and provides a five-year overview of directors’ salaries. To buy a copy, e-mail

Company News:

Red Hot World Buffet lines up first opening since Risk Capital Partners acquisition: Red Hot World Buffet is set to open its first site since its acquisition by Luke Johnson’s Risk Capital Partners last year. The company’s new site, estimated to cost around £1.5m, will open on the corner of High Street and Shires Lane next to the Highcross centre in Leicester in the first week of July. It will employ two dozen chefs and offer 400 covers. The opening in Leicester was first floated in August 2011 and last year’s Risk Capital acquisition has made it possible.
Former Mitchells & Butlers head of investor relations joins BSS: Stephen Hopson, who stepped down as head of investor relations at Mitchells & Butlers in February after a two-year stint in a career at the company that spanned 12 years, has joined BSS Industrial as its new finance director. He replaces BSS Industrial’s previous finance director, Stephen Harris, who has been promoted to the role of divisional finance director for Travis Perkins’ contract merchanting division. Chris Hufflett, BSS Industrial’s managing director, said: “Stephen has gained an impressive level of experience during his time with Mitchells & Butlers, which will certainly be of value to BSS Industrial as we continue to expand our business to cater for the growing demands of our customers.”
Work starts on £4.5m boutique hotel scheme at Spirit site: Work has begun on a £4.5m plan to turn The Grand Hotel in Leigh-on-Sea, Essex into a boutique hotel and spa. Mick Norcross, one of the stars of The Only Way is Essex, was given permission to turn the derelict building into a boutique hotel and restaurant in 2012. He acquired a sub-lease from Spirit, which holds a head-lease, after a long delay caused, reportedly, by the discovery of Japanese knotweed on site. The historic hotel has been closed since 2008: the site was operated by Orchid but reverted to Spirit. Norcross said: “I have long admired this iconic building and dreamed of rejuvenating it to reflect the original architecture. It has been my desire to bring the quality West End hotel experience to Essex and I see this building and its location as the perfect opportunity to achieve my dream.”
Brussels fish and chip brand to open sister site in Camden: The property agent Davis Coffer Lyons (DCL) has agreed a letting on one of London’s oldest Italian restaurants, Trattoria Lucca, on Parkway in Camden, to the seafood restaurant Hook, which has taken a new 15 year lease after the owner, 94-year-old Paolo Boggi, decided it was time to hang up his apron. The 1,786 sq ft restaurant has been a stalwart of the Camden dining scene for over half a century, having first opening in 1958. Hook Camden is the sister restaurant to the Irish “Fresh Sustainable Fish and Chips Concept” called Bia Mara, based in Brussels. Hook said the chef at the new restaurant, Simon Whiteside, “has created his own street food style interpretation of the classic British dish with influence from all over the world.” Rob Meadows, of DCL, said: “Trattoria Lucca was a local stalwart on the popular restaurant street of Parkway in Camden, however, the family decided that it was time to move on. Hook is a very exciting seafood concept and while its menu is very different to Trattoria Lucca, I have no doubt that it will be just as popular.” Simon Carson of Devono acted for the tenant.
Lemongrass to open fourth site in Horsham: The South of England-based Thai restaurant chain Lemongrass is opening its fourth outlet in Horsham, Sussex. The chain, which currently has outlets in Petersfield, Hants and Chichester and Rustington in Sussex, is moving into the site formerly occupied by Little Buddha in the Bishopric. The menu includes standard Thai dishes and also “Thai tapas”, starting at £6.95 per person. Lemongrass is offering 20% off to customers during the two weeks after its opening date. The planned opening comes a fortnight after fellow Thai tapas brand Giggling Squid opened in Horsham, occupying a former Giraffe site.
London’s first all day Creole bar and kitchen set to launch in Camden in June: London’s first all-day Creole bar and restaurant, Bayou is to open on Inverness Street, Camden in early June. Bayou seeks to “celebrate the very best of Southern American food, drink and music culture.” The bar claims to offer a “completely unique drinking and dining experience inspired by Bayou country, closely associated with Creole culture native to the Gulf Coast”. The food at Bayou is described as “Creole Bayou” – a mix of Southern American cuisine with French, Spanish, Italian and African influences.
Favourite hotel for touring car championship on market: A hotel that is a favourite with people attending the British Touring Car Championships at Thruxton Motor Racing Circuit in Wiltshire is on the market through the property agent Fleurets from a guide price of £995,000. The Red House Hotel, near Salisbury, sits in four acres of land and includes a large three-bedroom owner’s flat, 29 en-suite bedrooms, a bar, a 38-cover restaurant, lounge and a conference room which can accommodate up to 90 delegates. Will Thomas of Fleurets said: “This is a rare opportunity for any hotelier wishing to operate a hotel in this popular and historic area. The Red House is close to the city of Salisbury, Stonehenge and the Thruxton circuit. It also attracts a high number of guests who come to the area to visit the military bases nearby.” The current owner, Mike Bealing, is selling after deciding to retire.
New Glasgow restaurant will have city’s first ‘raw food bar’: Hutchesons, the £1.3m new cafe-bar in Ingram Street, Glasgow, which is due to open at the end of next month, will include Glasgow’s first raw food bar, where dishes are cooked at a low temperature to retain nutrients, as well as speciality seafood, steaks and afternoon tea. James Rusk, owner of the Butchershop Bar & Grill in Sauchiehall Street and vice-chairman of Glasgow Restaurant Association, has been working with the National Trust for Scotland over the past two years to regenerate the iconic building. Designed in the early 1800s by David Hamilton, it was intended as a hospital for the elderly, but has since been used as a library, bank and school and has lain empty since 2008. Recruitment for the 50 jobs the new restaurant will create started this week, and Rusk has teamed up with Glasgow Welcomes, the city’s tourism service initiative, to prepare all staff for this year’s Commonwealth Games.
Christie + Co reports good start to the year: The property agent Christie + Co has updated on trading progress in 2014. In the company’s preliminary results statement, released on 31 March, Christie + Co said the company started 2014 with more signed M&A mandates than for any previous year. It added yesterday: “The board is pleased to report that progress in these assignments has been quicker than had been anticipated. Trading since the start of the year across all of Christie Group’s operations is in aggregate above or in line with management’s expectations. As a consequence, results for the first half will be positive [against a loss in 2013 of £300,000]. Assuming no materially adverse economic changes or political unrest in our core markets, the board believes that results for the year to 31 December 2014 will be substantially ahead of the current market forecast.”
Blavod Wines and Spirits changes name: Blavod Wines and Spirits has hanged it name to Distil. The company, which is AIM-listed, said: “The directors believe the name Distil better represents the nature of the business, which is now predominantly a distilled spirits business, and also reflects the fact that the company is now entirely focused on designing and marketing a portfolio of its own brands following the acquisition of the Blackwoods, Diva and Jago’s brands last year and the launch of RedLeg Spiced Rum.”
Turtle Bay to open in Manchester: The Caribbean restaurant and bar chain Turtle Bay, which is backed by Piper Private Equity, is due to open in Manchester at the end of next month. The chain is moving into the former Alibi bar on Oxford Street in the city centre after a £1m makeover of the 8,000 sq ft premises to give a 250-cover restaurant space, a large central island bar and indoor “veranda”-style drinking spaces. A total of 70 new jobs were created, and according to one news report, staff were recruited after a rigorous “audition” process which included limbo dancing. Turtle bay currently has seven sites, but this will be its first in the north of England. It is due to open to the public on 30 May, after a VIP party on 29 May.
British Land sells two retail parks for £78m: British Land has sold two retail parks in Dumbarton and Cwmbran for £78m. St James Retail Park in Dumbarton has been sold to The Legal & General Property Unit Trust for £45.75m (a net initial yield of 5.9%). Cwmbran Retail Park has been sold to UBS for £32.3m (a net initial yield of 6.4%) Charles Maudsley, head of retail for British Land, said: “These sales are in line with our strategy to further focus our retail portfolio on high quality, locally preferred shopping destinations. Over the last 12 months, we have sold £386m of retail assets, which is broadly matched by the acquisitions we’ve made. Our most significant acquisition was SouthGate, a high quality shopping centre in Bath.”
Analyst Wyn Ellis issues ‘Hold’ note on Whitbread after yesterday’s results: Numis Securities leisure analyst Wyn Ellis has issued a ‘Hold’ note on Whitbread share with a target price of 4300p, after yesterday’s results. He said: “Full year 2014 preliminary results show profit before tax of £411.8m (up 16.5%) versus our forecast of £405m and consensus of circa £400m. Whitbread says that ‘the first two months of the new financial year have started positively, with good trading again helped by relatively soft comparatives which will become tougher as we move into the second half of this year’ and the company says it remains ‘on track to deliver our 2016 and 2018 growth milestones for both Premier Inn and Costa’. Whitbread had a strong finish to the year boosted by good Christmas and new year advertising campaigns and helpful weather comparatives. We would expect some modest upgrades to consensus estimates (WTB does warn of £10m of ‘revenue’ investment at Premier Inn and higher rent costs), and we have only marginally adjusted our top-of-the range forecasts. The shares have been strong performers and we expect the more recent phase of share price consolidation to continue in the near term.”
Greene King opens £4.5m Tunstall Hungry Horse new-build: Greene King has created 62 jobs with the opening of a £4.5m new-build Hungry Horse. The Chatterley Whitfield, named after the former mine in Chell, has been built on James Brindley Way in Tunstall, Stoke-on-Trent. Manager Dave Cartlidge told the local newspaper: “We had more than 500 people applying for jobs, which is a huge level of interest, and people were coming around while the building work was going on and asking to see when we’d start serving. I think the area doesn’t have that many pubs for all the family, so there is a lot of potential.”
PizzaExpress unveils St Neots opening date: PizzaExpress is to open in St Neots, Cambridgeshire on 8 May. The new restaurant at Rowley Arts Centre, has 161 covers and will create 24 new jobs. The inspiration for PizzaExpress St Neots is drawn from the town’s location on the Great Ouse, with “bright abstract canvases accentuating the striking blues and greens found along a river environment whilst a series of screens and pendants have been created with free-flowing lines to reflect the motion of flowing water”. Paul Owen, manager of PizzaExpress St Neots, said: “We will have a beautiful new restaurant and can’t wait to show it off to our customers.”
Soho House signs White City deal: Soho House has signed a deal with the property developer Stanhope open a branch in White City, West London with a new members’ club on the site of the old BBC Television Centre. It will feature a boutique hotel and club with a rooftop swimming pool. Soho House would operate a 50-room boutique hotel in the inner ring and the crescent-shaped outer ring would become a mansion-style apartment block.
St Austell launches experimental kriek beer: A kriek-style beer with a Cornish cherry twist has been launched this week by St Austell Brewery. The Cornish version of one of Belgium’s most famous beer styles has been made using 50kg of cherries grown in the Tamar Valley. The cherries used by St Austell Brewery were handpicked last summer at an orchard at Bohetherick Farm in the Tamar Valley near Saltash, Cornwall, before being mashed entirely by foot and added to the specialist beer. Roger Ryman, head brewer at St Austell Brewery, said: “This is the latest in our programme of experimental beers that are really about having a bit of fun and pushing the boundaries. The natural fermentation process required for a kriek beer does bring with it a whole bunch of challenges for a commercial brewery – it’s a bit like putting a hay meadow in your pristine bowling green – but we’ve been very careful to keep it entirely separate.”
Greene King says ‘thanks’ after locals redecorate one of its pubs: Greene King has paid a group of customers a “nominal” fee after they came together to redecorate their local pub, The Blackbird in Blackbird Leys, Oxford. Six volunteers, all regulars at the pub, have spent nearly two weeks on the work. The project was organised by Sam Mitchell, who owns SJM Motor Repairs in Old Road, Headington. Mitchell said a rainy Friday night prompted the decision. He said: “I was sitting in there last year with a couple of mates, and the roof was leaking, and it was just awful. I came up with the idea that we could take on the responsibility to do it up ourselves.” This is the third and final stage of the refurbishment. Last year saw the group renovate the interior of the pub, giving it new curtains and flooring, as well as a repaint. Mitchell said: “We’ve already done the bar and the lounge. We’ve never had to close the place. When we did up the bar we kept the lounge open, and vice versa when we did the lounge.” The group tackled the pub with the permission of landlord Glen Williams. A Greene King spokesman told the local newspaper: “The Blackbird is strong with community spirit. We thank those who have been involved in decorating their local pub.” Greene King has paid for the materials, and is giving a “nominal fee” to the crew for the final stage of the work. Most of the group are painters and decorators themselves.
Charles Wells strikes compromise deal over hours at first managed pub in Cambridge: Charles Wells, the Bedford brewer and pub owner, has been given permission to open its first new managed pub, The Salisbury Arms in Cambridge, until 12.30am every evening after compromising with residents who feared “insufferable” noise. The Salisbury Arms marks a return to managed pubs for the company, and it has reopened as the flagship for a new division called Seadog Inns. However, its application to extend opening hours until 12.30am every night, instead of just Friday and Saturday brought 17 objections from neighbours, with one saying it would be “insufferable”. The application was granted by the city council this week after Charles Wells offered to limit late opening to 26 occasions a year. On those dates, which will be announced with at least a week’s notice, the pub will be allowed to sell alcohol until midnight. Charles Wells also agreed to order drinkers to stop using a seating area outside the pub at 9pm, rather than 11pm as had previously been requested. Peter Wells, managing director of Charles Wells’s pubs division, said: “We are absolutely delighted that the compromises we offered to address the concerns raised while enabling us to still make improvements to the new-look Salisbury Arms were approved. The permissions granted means we can introduce a breakfast menu, add a seating area at the front of the pub and be able to stay open later on special occasions.”
Byron opened in York ‘because of locals’ emails’: Byron opened its latest outlet, a 108-seater restaurant in High Ousegate, York, because “we got quite a few emails from locals saying they’d like to see us open here; it was no more complicated than that really,” founder Tom Byng said this week. York is only the third northern city in the UK to be targeted by Byron, which has 29 of its 35 sites in London. In an interview with The York Press, Byng said: “We’ve always taken a practical approach of ‘one restaurant at a time’ based on where our customers want us to be. It’s served us well since we started six years ago.” Despite the calls from people in York for a Byron outlet, Byng said, “Finding the right location was more tricky, we’ve been looking for a couple of years so it’s great to finally be up and running.” Byron opened in the former Danish Kitchen cafe, which closed early this year after more than 35 years in York, with the loss of 17 jobs. Byng founded Byron six years ago – he spent four years in the United States and saw a gap in the UK market for restaurants selling what he describes as “proper hamburgers the way they should be”. He said: “Our approach is to do a simple thing and do it properly. We’ve spent a lot of time America and so our hamburgers are based on the simple, classic hamburgers we’d enjoyed there, but couldn’t find in the UK. We also design our restaurants individually. Every one is different and suited to the building and local environment.” Byron was owned by the Gondola Group, which also owns PizzaExpress and Zizzi, but was sold in October last year for £100m to Hutton Collins Partners.
Marston’s names opening date for new Port Glasgow pub: Marston’s Inns and Taverns has named 26 May as the opening day for its newest Scottish outlet, The Waterwheel at the Gallagher Shopping Park, Greenock Road, Port Glasgow, Inverclyde. The building is still being completed, but the company said all of the senior staff are in place, and the next phase of recruitment is under way. Nigel Whitfield, from Marston’s, said: “We’re extremely excited about The Waterwheel and hope it will build a great reputation locally with top quality, value for money pub food and an unrivalled selection of drinks, including cask ales from across the country.”
Taco Bell takes another poke at McDonald’s in latest breakfast ad: Taco Bell is taking a second swipe at McDonald’s in its latest TV advertising promoting its new breakfast menu in the United States. The ad is set to the tune of “Old MacDonald Had a Farm” and shows a man who has been eating Egg McMuffins since 1984. After trying Taco Bell’s breakfast, the man trims his mullet, switches to tighter trousers, gets a smartphone and takes down his “Loverboy” poster. It is a follow up to another ad that featured real-life men named Ronald McDonald professing their love of Taco Bell’s breakfast. McDonald’s has 31% of the fast-food breakfast market, according to the food industry researcher Technomic, and Wendy’s, for one, has turned its back on plans to expand its breakfast menu after testing the offering in select locations. McDonald’s responded to the first Taco Bell ad by tweeting an image of its spokesclown Ronald kneeling down to pet a chihuahua, a type of dog once used by Taco Bell as a mascot, with the words: “Imitation is the sincerest form of flattery.”

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