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Morning Briefing for pub, restaurant and food wervice operators

Wed 28th May 2014 - Propel Wednesday News Briefing

Story of the Day:

Steakhouse brand with plans for eight sites seeks crowd-funding: A new steakhouse brand, Austin’s Ranch, serving smoked, barbecued Texan and southern American cuisine in a contemporary, American ranch-style interior, is seeking £150,000 of funding for 21% of its equity via crowd-funding website Crowdcube. Managing director is Stuart Graham who founded media agency Capital Media Group in 2008. The menu has been developed by Michelin-trained executive chef Steve Durham, who worked at Sat Bains. The company states: “The first pilot restaurant will be the only establishment for more than 20 miles around to offer this all-American experience, according to our research. Our aim is to develop attraction-based restaurants in eight major UK cities, then extending the offering to the numerous international markets, in which we have already established relationships to begin a franchise model. We will have a traditional BBQ built in the kitchen, flame-barbecuing our food for that authentic BBQ taste normal grills just cannot match. Working on conservative sales turnover, running each night at 30% capacity, we have forecast a first-year EBITDA figure of over £95,000. We estimate our average gross profit margin is at 68% and net profit margin at 20-25%. The capacity of the first restaurant will be 100 seats with a bar area. If the restaurant runs at 50% capacity during the week and 100% capacity at the weekends (with two sittings), based on an average per head spend of £15, we forecast that first year turnover could be as high as £780,000 with an EBITDA of £156,000. The funding we require will fund the design and fit-out of the first pilot restaurant in Newark, Nottinghamshire, as well as providing six to eight months of working capital. Based on growth plans, the number of new restaurant locations we intend to develop and conservative profit figures for each, we anticipate a sale value of the company in five years of at least £12m.” So far, the company has attracted 15 investors offering £8,590.

Industry News:

Whiteley Shopping Centre reports 4.7m visitors in first year: Whiteley Shopping Centre in Hampshire has reported 4.7 million visitors in its first year. In the past year it has added eight to the original 50 shops and restaurants, with newcomers including YO! Sushi and Wagamama. The centre is also looking to the future, with construction work already under way on an £18m leisure extension to the north, which includes a nine-screen Cineworld cinema along with Five Guys, Nando’s, Pizza Express and Coast to Coast. This next phase of the project is due to open next summer and will create 180 new jobs.
Luke Johnson joins business leaders in asking for EU relationship to be renegotiated: Sector investor Luke Johnson has signed a letter to The Daily Telegraph with fellow business asking for a renegotiation of the UK’s relationship with the EU. The letter states: “A referendum is not only needed to address the gaping hole in the democratic legitimacy of our membership of the EU, but is also a vital component in efforts to reform the EU and its sprawling institutions. Without a referendum, it is difficult to take seriously claims of a desire to reform the EU, or to trust the people. As well as committing to a referendum in their 2015 manifestoes, all parties must spell out their vision for a reformed EU and what a sensible deal for the UK would look like.”

Company News:

Jim Sullivan provides JW Lees staff with advice on hiring: Managers at the Manchester brewer and retailer JW Lees, which is looking to hire 1,000 extra staff over the next five years as it expands operations, have been told by the American motivational speaker Jim Sullivan that they would have to put recruiting the right sort of people at the heart of their efforts. There are basically four types of worker, A-players, B-players, C-players and D-players, Sullivan told the audience at the JW Lees annual conference in the Bridgewater Hall in Manchester, with C and D the worst. "A-players never come in looking for work because they're happy working somewhere else," he said. "C and D players we see a lot of – they're always leaving jobs, by chance or by choice, and looking for work. If you can't find A and B players and all you're seeing is C and D-players, you'd better be darned good at training and development, to make D-players into C-players, and transform C-players into B-players, and B-players into A-players." Sullivan also warned that "if you have C-level managers, they hire D-level team members, so that they look better and feel better. A-player managers hire As." Sullivan told the conference that if managers "spend all of our time looking for the right people, making it a privilege to belong to our team, in the long run, it pays huge dividends. Hire tough, manage easy. You don't build businesses, you build people, and people build businesses."
Douglas Jack reduces Punch shares target price by 1p to 10p after debt-for-equity plan published: Numis Securities’ leisure analyst Douglas Jack has reduced his target price for Punch shares by 1p to 10p after yesterday’s publication of a debt-for-equity restructuring proposal. He said: “These terms are different to previous ones: they would result in a 26% reduction in total net debt, materially reducing financial risk but at the cost of equity dilution. This is all reflected in our revised forecasts and change of target price, to 10p from 11p. Due to the current 15p share price our recommendation moves to “Sell”, from “Hold”. This transaction requires 75% approval from all asset classes including equity. It has already got the support of seven junior bondholders, who also hold over 50% of the equity. Our 10p target price equates to existing shareholders’ share of debt reduction or 9.6x 2015E EV/ebitda. We estimate debt reduction should grow this equity value by 17% (1.7p/share) pa. This target valuation is at a slight discount to Enterprise Inns’ 10.0x EV/ebitda even though Punch is outperforming on like-for-like profits, will have lower leverage, has no bank debt and should have no refinancing event.”
Punch regional operations director joins Enterprise Inns: Richard Woodward, who has worked for Punch Taverns since 2005 and been a regional operations director since August 2010, has joined Enterprise Inns as a divisional director for the Midlands. Woodward, who worked for McDonald’s earlier in his career, oversaw the creation of the Champs sports bar brand in Sheffield. The brand has now been extended to a total of three sites. David Rowland has replaced him as acting regional operations director.
Harden’s – Jamie Oliver to launch mega-Berbecoa in Mayfair: The restaurant guide Harden’s has reported that Jamie Oliver is to open a second Berbecoa at an unnamed site in Mayfair, Central London four times the size of the original. The guide’s website saidd: “Word reaches us that Jamie Oliver is to launch a second Barbecoa, opening in Mayfair next year. Size seems to be a bit of a theme at this Mayfair sibling, like the One New Change site it will have an attached butchers, but the new one will be four times the size of the original.”
William Lees-Jones – Dutton’s has roll-out potential: JW Lees managing director William Lees-Jones has told Propel that he believes the company’s cafe-bar concept, Dutton’s, which opened a second site in Manchester last year, definitely has roll-out potential. He said: “The Manchester site is slightly more wet-led than the original site in Chester – we’ve shortened the menu to speed up serve times. The Chester site has seen Living Ventures open a Botanist site opposite us and it had led to trading going up. It’s the Achilles heel of branded operators that they often grow too quickly and shoe-horn their brand into the wrong premises. I think it easier to row from two to 12 sites than one to two – once you’ve worked out what’s working.”
Wetherspoon unveils plan to convert Edinburgh bingo hall: JD Wetherspoon has unveiled a £1.5m plan to convert a central Edinburgh bingo hall into a pub. The company has bought the Empire Bingo venue on Nicolson Street for an undisclosed sum and submitted a planning application to transform what was earlier the La Scala cinema into a two-storey pub. The bar would cover an area of more than 4,000 sq ft. Wetherspoon spokesman Eddie Gershon said the capacity of the proposed Southside pub, just minutes from the University of Edinburgh’s George Square campus, was not yet known. He said: “We have enjoyed great success with our existing pubs in Edinburgh and Leith and believe this site, in the heart of Edinburgh, is perfect for a Wetherspoon pub. We are looking to invest approximately £1.5m on the redevelopment and create 50-plus jobs.” In December the company caused controversy when it acquired the Picture House in Lothian Road, Edinburgh, a 3,000-capacity music venue, and announced it would be converting the premises into a pub. Planning officers are expected to make a decision by delegated authority on the application by 11 July.
Urban Leisure opens seventh site: Urban Leisure Group has opened its seventh site, a two-floor all-day restaurant and bar called Ask For Janice in the building that was formerly Kench and Bibsey on 50-52 Long Lane, by Smithfield Market in central London. The 2,100 sq ft site comprises a basement bar for 40 covers and a double-fronted ground floor for 75 covers with a mix of classroom and industrial decor, reclaimed wood and vintage tiling. The walls have a selection of contemporary art including an original Damien Hirst print, as well as a double-wall commission by Kid Acne. Artisan coffee will come from Coleman Coffee Roasters, a small batch coffee roaster in southeast London. Hezi Yechiel, director of Urban Leisure Group, said: “We are very excited to be joining some amazing operators in this great part of London and hope the locals will appreciate the efforts we make in everything we do.”
Draft House reports 17% like-for-likes in May: Draft House, the five-strong London operator led by Charlie McVeigh and backed by Luke Johnson, has reports 17% like-for-like sales growth in May, with l-f-l sales growth for the first seven months of its financial year now breaking double digits at 10.07%. McVeigh told Propel: “We hope to have new site news shortly.” The company was close to securing a pub in Chapel Market, Islington in March but Draft House found itself in the ironic position of being in a reversal of the bank-to-pub trend when it was outbid for the site by Metrobank. McVeigh said: “That was incredibly disappointing. We loved the site, it was an incredible old pub.”
New Tex-Mex and sports bar concept to open in Sevenoaks:
A new Tex-Mex and sports bar brand, Border Tex-Mex, is to launch in Sevenoaks, Kent on 9 June. It will be based at 42-44 London Road, a site currently occupied by Seven Sushi, and is understood to be the brainchild of Hugo Meyrel, owner of the El Matador steak restaurant in Sevenoaks. Seven Sushi’s existing licence allows it to sells alcohol until midnight between Monday and Saturday and 11.30pm on a Sunday. Seven Sushi was opened in November last year.
Next open 27,000 sq ft site with a Starbucks: Clothing retailer Next has opened a 27,000 sq ft site at the Mayflower retail park in Basildon, Essex with an in-store Starbucks. The superstore, which has created 50 jobs, has replaced a much smaller Next, just a few doors away.
BrewDog appeals for bar feedback: Scottish brewer and retailer BrewDog has appealed to customers to provide feedback on its bar. The company said: “With 16 BrewDog bars now open worldwide (which will become 17 on Thursday this week when BrewDog Gothenburg launches) it's critical that we keep a keen eye and ear out for feedback that can make our bars perform as awesomely as physically possible. From our beer range, to seating, to food, to glassware, to toilet fit outs, to service standards, to events and beyond, we want to be at the top of our game. It's what we strive for and if we're not doing it right, what is the point?” Customers claimed the food was not always appealing and the beer choice could be more imaginative.
Tossed opens at Welcome Break: The healthy food brand Tossed has opened at Welcome Break Birchanger, Essex, by Junction 8 on the M11 near Bishop's Stortford. Rod McKie, chief executive of Welcome Break, said: “We are thrilled to be trialling the Tossed brand alongside our existing offering at Welcome Break, Birchanger. The positive feedback we’ve received so far has been overwhelming and we fully expect for Tossed to be a permanent fixture at Birchanger and other Welcome Break services across the country this year.”
Grillstock reveals Bath opening date: Grillstock, which specialises in pop-up restaurants at festivals, will open its second permanent venue, Grillstock Smokehouse at The Vaults on Brunel Square, near Bath Spa Railway Station, at the end of June. The chain is currently filling 45 positions at the restaurant including waiting and kitchen staff as well as management. Grillstock, which has operated as a pop-up at Bristol music festivals for five years, opened its first permanent home for its slow-cooked meats and Deep South cuisine at Triangle West, Park Street, Bristol. Rumours on social media also suggest the cocktail chain Be At One Bar could be opening a new bar at the Vaults. Be At One Bar refused to comment on the rumours but a spokesman for SouthGate, which runs the Vaults, said it hoped the final two units at the restaurant scheme would be filled this summer. The SouthGate development, a £12m dining quarter for Bath, began a phased opening in the autumn of 2012 and now includes chains such as Nando's, Gourmet Burger Kitchen and Prezzo.
Fuller’s introduces chef scholarship: The London-based brewer and retailer Fuller Smith & Turner has introduced a chef scholarship. The improved scholarship programme now provides a comprehensive package to budding young chefs. Catering trainer Tim Barnes has helped to develop the three stages of the scholarship for Fuller’s chefs. Each of the three levels aims to progress the skills of the chefs at each stage of their career. The Level Three scholars, who are currently working either as a sous chef or head chef, will join Brockenhurst College Salon Culinaire today (28 May) to participate in a head-to-head cooking skills competition using fish and beer as the main ingredients. The competition will be judged by a panel made up from senior chefs from the Craft Guild of Chefs and Fuller’s own executive chef team. There are 11 of the scholarship chefs competing in the competition. Barnes said: “We are very lucky at Fuller’s to be able to offer such a comprehensive course for young chefs to help them develop their careers. The scholarship allows us to expand the way we train our chefs, and by offering all three levels means that we can continue to raise the standards of the food and menus within our pubs."
Prezzo to open first Chimichanga in Scotland:
Prezzo is to open its first Chimichanga restaurant in Scotland on Monday 2 June. The Mexican restaurant is opening on the site of the former Bar Roma restaurant in Edinburgh. The restaurant cost £500,000 to develop and will have seating for 138 diners; 132 in the restaurant itself and a further six at the front. It will feature a central bar with seating for guests. Chimichanga's operations director, Peter Morrison, said: “We are looking forward to opening our first restaurant in Scotland.”
Prime Shepton Mallet site on market after Wetherspoon withdrawal: A prime site in Shepton Mallet, Somerset (population: 10,369), the former theatre, currently called the Academy, is up to let a year after JD Wetherspoon withdrew interest in favour of opening in nearby Wells. Kevin Newton, of Coxley Developments, got planning consent for the Academy in November 2011 for change of use of the 860 sq m ground floor and part of the 86 sq m first floor to a public house. It had been hoped that JD Wetherspoon would be the tenants, but the chain pulled out after a reported 26 months of negotiations. Now the Academy, commonly known as the Amulet, is being let through the leisure property specialist Fleurets. Shepton Mallet councillor Chris Inchley said: “The Academy building is a key building in the town centre. A modern town centre should balance shops, employment, community space and entertainment. If the Academy can be used as a high-quality pub or restaurant, this could well draw people into the town centre."
Hawkes Brewing Company looks to recruit investors to fund expansion: Hawkes Brewing Company, which makes alcoholic ginger beer, will look at bringing on board investors for the first time to fund its expansion plans. Founder Simon Wright, who worked previously at Greene King and AB Inbev, said that the fast-growing firm would look to bring on board external investors within the next 12 months. Hawkes has joined the government-funded GrowthAccelerator programme, aimed at companies with the potential to double either their turnover or employees within three years. The scheme was set up to help firms raise finance, commercialise innovation and develop their business skills. Hawkes has seen its sales double every month since its ginger beer was launched in July 2013 and it recently increased production by 50% because of strong demand. The company is expected to become profitable next year. The ginger beer is currently sold in 300 Mitchells & Butlers pubs and bars across the country, and last month Young’s agreed to stock it in its sites.
Kerbisher & Malt to open fourth restaurant next month: The award-winning fish and chip shop Kerbisher & Malt is set to open its fourth site at the beginning of June, in Abbeville Road, Clapham, South West London. Kerbisher & Malt will join food operators such as Adam Byatt’s Bistro Union, Abbeville Kitchen and the Ginger Pig in the area. The chain sells fresh, sustainably sourced fish, battered, crumbed in matzo meal or grilled, and twice-fried chips. A spokesman said: “Abbeville Road has a very particular aesthetic which lends itself well to a classic chippie. We wanted to create a restaurant that was welcoming, warm and key to the strong community feel of the road."
Dragon’s Den star to run pop-up in pub: Dragon’s Den star Joe Walters will run a summer-long pop-up BBQ at the Grafton pub in Kentish Town, North London, providing a range of Southern US classics including slow-cooked brisket, beef ribs, chilidogs and fresh cornbread. Walters currently operates two pop-up BBQ restaurants in BrewDog bars in London that also sell Southern US-style food. Walters, who sells a range of beef jerky under the brand name Texas Joe's, has also unveiled a range of hot dog sausages, Hot ’n’ Spicy Lone Star Dogs, that will be exclusively available in Waitrose stores nationwide from today. There are plans to expand the Texas Joe’s range to include tortilla chips and root beer in the coming months.
Carlsberg launches portfolio of craft beers for free trade: Carlsberg UK has launched a range of craft and speciality beers under the name "Crafted" to help free-trade pubs expand their beer offer. The 28 beers in the range come from the UK, the United States, Belgium, Sweden and elsewhere, and include lagers, bitters, pilsners, pale ales, porters and wheat beers on draught and in bottled and cans. Among the beers on offer are Stevens Point Brewery's IPA from Wisconsin in 355ml bottles, Portobello Brewing Company's London Pilsner in 30l kegs, and the Carlsberg-owned Swedish brewer Backyard Brewery's The Bee 17 pilsner and Lawn Mower amber lager, both in cans. Other beers are from Liefmans in Belgium, Anchor Brewing and Shipyard Brewing from the US and Innis and Gunn, Meantime Brewing, Charles Wells, Greene King and Marston’s from the UK. The company said: "With year-on-year growth for craft beer in the UK up 75% and the average pint of craft beer commanding an additional 75-90p per pint, there has never been a better time for free trade operators to explore and exploit the potential of craft and speciality beers."
Coeliac sufferer opens gluten-free restaurant: A coeliac sufferer in Leeds has opened what is believed to be one of fewer than five gluten-free restaurants in the whole of the UK. The 50-cover restaurant, 2 Oxford Place, next to Leeds Town Hall, has a 100% gluten-free kitchen and offers brunch, lunch, afternoon tea, sharing platters and three-course meals. Coeliac sufferers have a reaction to gluten proteins found in wheat and other cereals that causes a range of symptoms, with the only known treatment being a life-long gluten-free diet. Victoria Hall, a former teacher who gave up her job to open the restaurant, said: "I am coeliac myself and it was always a case of ‘what can I have?’ rather than ‘what would I like to have?' There doesn’t have to be a difference. A lot of places are offering gluten-free, but there is always a risk of cross-contamination and you can’t always be 100% safe and free from gluten. I just wanted to give people that peace of mind. I thought there was a real niche to be explored – there aren’t any other restaurants like this in the area, and there are less than five in the country, as far as I’m aware.”
Nightclub owner scraps plan to turn jail into pod hotel:
The owner of Shrewsbury’s Buttermarket nightclub, Martin Monahan, has scrapped plans to turn the Grade II-listed ex-jail behind Shrewsbury's railway station into a pod hotel, after it was confirmed he is not the front runner following talks with the Ministry of Justice. Monahan, who also owns the Peach Tree on Abbey Foregate in Shrewsbury, had planned to convert the prison into a conference centre and 14-room hotel.
Snoozebox starts production of next generation portable hotel accommodation: Snoozebox, the provider of portable hotel accommodation and services, has started production of the next generation of Snoozebox hotel rooms. Snoozebox has created a new highly engineered next generation hotel room unit that claims more internal configuration flexibility and vastly improved mobility, making it easier to transport and deploy from event to event. The company said the new features "dramatically improve the economics of portable hospitality whilst retaining the Snoozebox user experience."
TGI Friday’s and Coal Grill and Bar set to open at Gloucester Quays: TGI Friday’s will open at Gloucester Quays in June, to be followed by Coal Grill and Bar in July. Workers will begin fitting out TGI Friday’s next week. That restaurant will open beneath the Gloucester Antiques Centre on Llanthony Road. Plans have also been submitted to the city council to carry out works to the Pillar and Lucy warehouse, opposite the Chimichanga restaurant, so that preparations for Coal can get under way next month. Jason Pullen, managing director of Peel Outlets, which runs Gloucester Quays, said: “This is an important next chapter in our leisure quarter. The existing restaurants are doing extremely well and this will only add to the offering.” It is also anticipated that the Real China will re-open shortly, after it was shut down by the Quays until its management could be replaced and kitchen equipment improved. Coal, which has a restaurant at Cabot Circus in Bristol, is applying for permission to convert the historic warehouse that will become its new home. Meanwhile, TGI Friday’s is seeking permission for its new glass frontage on what will be the Quays’ biggest restaurant.
Plans unveiled for 'unparalleled' nightclub in Northern Ireland: More than 100 jobs are to be created with the redevelopment of Dorman's nightclub in Magherafelt, Northern Ireland. The development is in four phases: the first phase is expected to concentrate on the nightclub side, while the second will focus on the restaurant, followed by another two phases. A spokesperson for Dorman's said all the proposed work was on schedule and the project would be completed with two years. The refurbishment is being overseen by the Belfast firm McCue & Associates, which has just completed major projects at Claridge’s in Mayfair, London. Features are understood to include a state-of-the-art cocktail bar and a luxurious secret lounge. A spokesman for Dorman's said: “This [development] is unparalleled to the current offerings in Northern Ireland nightlife.”
Ambassador Theatre Group to challenge West End pubs with balcony extension: Plans to extend the first-floor bar at the Piccadilly Theatre in Denman Street, Central London by building an external balcony have been submitted to Westminster City Council, after it was revealed the venue is losing trade to local pubs and restaurants because of its lack of space. The West End theatre’s owner, Ambassador Theatre Group, wants to create a terrace on the first floor above the venue’s canopy as an extension to the bar. It is hoped this would generate extra revenue from drinks sales. Other West End venues already make use of balcony space, such as the Prince Edward Theatre, which has said its terrace can bring in 25% additional revenue at the bar. A report by a historic building consultant, Rachel Hamilton, which was commissioned by ATG and submitted to the council, said the Piccadilly Theatre had previously undergone an extensive refurbishment to stop a serious decline in visitor numbers. However, the report said, this had resulted in only a limited effect on revenue. The theatre is “simply unable to give its guests a comfortable service” from existing bars and therefore “loses trade to other local establishments,” the report said.
Coca-Cola to launch £20m fitness drive: Coca-Cola is to launch free fitness classes as part of a £20m anti-obesity drive to get one million people more active by 2020, Marketing Week has reported. Coca-Cola Zero ParkLives consists of a series of free organised activities, developed alongside local councils. In the first year, starting 30 May, it will be available in Birmingham, Newcastle and Newham in London and then from 2015 ParkLives will expand to more cities. Jon Woods, general manager of Coca-Cola Great Britain, said: “We know that cost is a barrier to participation so we hope that the free programme of activities will inspire local people to enjoy getting active a bit more and come together with friends and family in their local parks.” Coca-Cola has made several efforts in recent years to show a commitment to being "healthy", with the reformulation of Sprite, a global anti-obesity advertising campaign, a partnership with StreetGames and the pledge to cease advertising to under 12s.

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