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Wed 25th Feb 2015 - Propel Wednesday News Briefing

Story of the Day:

Loungers investor sells hot dog business: Piper Private Equity, which has investments in Loungers, Turtle Bay and Hickory’s, has sold Rollover Hot Dogs to Kerry Foods for an undisclosed sum. Since investing in 2006, Piper has turned the company into the UK’s largest premium hot dog seller. Rollover Hot Dogs are sold in over 3,000 locations, including leading nationwide leisure, pub and retail chains along with more than half of the country’s Premiership League football stadiums. Piper has helped to develop the management team with the recruitment of Simon Vine as chief executive and Nigel Osborne as chief financial officer and worked alongside the team to assist in rebranding the business, focus on continued new product development and broaden the distribution base. Rollover now has revenue of more than £13m. Chris Curry, managing partner at Piper, said: “When we invested in Rollover we were attracted by their passion for quality – great tasting premium hot dogs made in the traditional way – and could see, with the growing trend for hot food-to-go, that there was potential to expand significantly the brand’s awareness and distribution. With the scale and capability of Kerry Foods, we are confident Rollover will continue to grow both in the UK and in other markets.” Vine added: “Our partnership with Piper has been extremely positive and beneficial to the business. The team has helped in many different areas – from providing the right level of financial support and introducing new customers to building our social media and enabling us to become more consumer-facing. We now look forward to working with Kerry Foods, whose sector knowledge and expertise will fuel our next stage of growth.”

Industry News:

Burger King franchisee recruits more drivers for successful home delivery trial: Burger King franchisee CPL Foods is recruiting more drivers as a result of the success of the trial of a home delivery service by the chain. Lamen Reddy, operations director for CPL Foods, said: “(The trial) has been really positive and we have had a great response. The service has proved so popular we are currently recruiting for additional drivers.” In Hull, one of eight places in the UK where the trial is taking place, a branded Smart car is set to be added to the current fleet of mopeds in the near future. There are also plans to expand the two-mile radius to cover more of the city. Deliveries are being trialed in postcodes around Romford, Truro, Hornchurch, Skegness, Hull, Hayes in Middlesex and Gants Hill in Essex, and extra drivers are being recruited in Hull, Skegness and Hayes. The delivery service is available every day from noon to 3pm and 6pm to 10pm.

Just Falafel closes last UK site: Just Falafel has closed its last UK site in Covent Garden, a little more than a year after it opened, The Times has reported. The company had planned to open 20 sites in its first year on the way to a target of 200 UK locations. It opened a total of six locations but it looks like UK consumers were not ready to embrace the brand. The Times reported that the Covent Garden branch was seeing increasingly mixed reviews on TripAdvisor. Founder Mohammed Bitar has admitted that the company was so focused on franchising it “forgot about the food”. In January, Propel reported that the company had changed its name to JF Street Food. “Having recently taken Just Falafel back to basics with a completely revamped menu, we wanted our staff and restaurants to get a fresh look to go with it,” Bitar said. In 2012, the company’s former chief announced an ambitious goal of opening one outlet a week. The chain, founded in 2007, is now present in eight countries with 40 outlets, including 12 in the UAE. It had 25 outlets in 2012, according to the company. The chain has yet to enter India, a plan it announced last year.

Stop using ‘profit’ like a dirty word says CBI: After a YouGov poll that found 71% of UK adults think businesses put profit before consumers, the CBI, the UK’s leading business group, is calling for an end to profit being used like a dirty word. The organisation also wants an open conversation about why the profits that businesses make ultimately benefit consumers, allowing companies to grow, create jobs and invest back in new products and services. The YouGov poll of more than 2,000 UK adults for the CBI’s trust-in-business campaign, the Great Business Debate, found 71% of people think companies put profits before the needs of consumers. More than two thirds agreed that profit was a good thing but they also felt consumers lose when profits are made. Katja Hall, the CBI’s deputy director-general, said: “Despite support for profits as a ‘good thing’, they continue to be demonised widely. We need to recalibrate this debate. When markets work well, the best businesses deliver for their customers and reap the rewards in sales and profits. Profits make employing people and investing in new products and services possible, in turn bringing huge long-run benefits to consumers. To boost trust, businesses must listen harder to understand and respond to their customers’ ever-evolving needs and expectations.”

ALMR – Investments in staff will bolster licensed hospitality: Responding to the Low Pay Commission’s (LPC) recommendations to increase the National Minimum Wage, the Association of Licensed Multiple Retailers (ALMR) has welcomed the measured increase and called upon government to continue to support businesses’ investments in their staff. The LPC has recommended the following changes: Adult rate: 3% increase to £6.70 per hour; youth rate (18-20): 3.3% increase to £5.30 per hour; minor rate (16-17): 2.2% increase to £3.87 per hour; apprentice rate: 2.6% increase to £2.80 per hour. ALMR chief executive Kate Nicholls said: “The Low Pay Commission has recognised the very real pressures being placed on businesses in terms of labour costs and tightening margins and the increases reflect this. We are also pleased to see the Commission recognising the importance of keeping youth and apprenticeship rates affordable for businesses. As a result, we are urging all parties to accept the recommendation. The latest ALMR employment survey shows that almost half of respondents reported an average hourly wage of £7 or more. Pubs, bars and restaurants are clearly willing to invest in their staff if the conditions are right. Keeping wages affordable is a good first step but we would also like to see increased support, particularly for adult apprentices. We are repeating our calls for fully-funded apprenticeships for 19-24 year olds plus additional funding for over-25s to encourage those people who have not been through higher education to discover the range of careers our sector offers.”

BII launches major new summer event: The BII has launched a major new addition to the industry calendar, the BII Summer Event, which takes place on Tuesday 2 June at the Artillery Garden of the Honorary Artillery Company (HAC), Chiswell Street, London. The event, which is expected to attract over 1,000 members, friends and supporters, sees the BII celebrate the success of professional excellence within the industry and present the industry’s top accolade for licensees, the BII Licensee of the Year award. Tim Hulme, chief executive of the BII, said: “For 2015 we aim to create an event which is a true celebration of the licensed retail sector; one that brings this fantastic community together. To achieve this we selected a venue that adds a very ‘British’ feel to the occasion. Alongside the key business messages of the day and the recognition of the best operators in our industry, we have a relaxed and fun environment where guests can enjoy the social and networking opportunities.”

Single-asset hotel deals in UK soar 40%: Single-asset hotel deals in the UK were up 40% year-on-year in 2014,with the country’s strong economy and good hotel operating results driving investment in both London and the regions, according to the annual European Hotel Transactions report, published this week by HVS and its brokerage and investment services division, HVS Hodges Ward Elliott. The UK was Europe’s most active hotel property market followed by Germany, then France. Together these three markets accounted for 59% of total European transactions during 2014. The report’s co-author, Jill Barthel, an analyst at HVS London, said: “Demand for prime assets across Europe’s key gateway cities is still very strong. Prices in capital cities such as London and Paris are very high, prompting investors to increasingly consider secondary and tertiary investment locations, particularly in the UK.”

Company News:

La Tasca sets Valentine’s Day sales record: Spanish tapas brand La Tasca recorded its highest ever sales day in its 21-year history on Valentine’s Day this year, beating the previous new record set only in November last year. In a trading update, the chain, which has 37 outlets in the UK and five in the United States, said sales were up 10.6% over the Valentine’s weekend, 13 February to 15 February, compared to 2014, which meant the financial year saw like-for-like sales growth of more than 5% in its full financial year and like-for-like Ebitda growth set to finish around 50% up. In March the brand will open its first shell site in more than six years at the Barclaycard Arena in Birmingham. It will also see the launch of La Tasca’s next-generation brand design at Covent Garden in Central London at the end of the month. This week La Tasca is rolling out a new POS and IT system. La Tasca’s chief executive Simon Wilkinson said: “We have had an amazingly successful trading year on the back of excellent growth during the previous year, which is testimony to the fantastic team effort throughout the company from pot-wash all the way through to my senior team. The new Birmingham shell opening is a significant milestone and we are all very excited about the new design in Covent Garden and the other opportunities ahead for further growth during the new financial year. The Spanish Revolution is well and truly on track.”

Fourth Clink restaurant set to open at a women’s prison: The fourth Clink Restaurant will open at HMP Styal in Cheshire on 30 April and will be the first at a women’s prison. The latest restaurant will train up to 30 women prisoners at a time in both cooking and front-of-house service to achieve nationally recognised City and Guilds NVQs. The Clink Restaurant at HMP Styal will offer diners a similar experience to The Clink Restaurant at HMP Cardiff as the restaurant is situated within the prison grounds but outside the prison walls. It will open to the public for lunch from Monday to Friday, with evening and weekend opening times to be introduced later in the year. In partnership with Her Majesty’s Prison Service (HMPS), The Clink Charity aims to have ten training facilities and projects in operation across the prison estate by the end of 2017.

Starbucks to stop selling physical CDs in stores: Starbucks has announced it will stop selling physical CDs in its outlets globally from the end of March. The coffee giant has its own label, Hear Music, which has released original music from artists such as Joni Mitchell, Paul McCartney and Alanis Morissette, as well as selling releases from other major musicians. Now it has revealed it will stop physical sales in March, with digital music still to be available in most outlets. Speaking to Billboard, Starbucks said: “We will stop selling physical CDs in our stores at the end of March. Starbucks continually seeks to redefine the experience in our retail stores to meet the evolving needs of our customers. Music will remain a key component of our coffeehouse and retail experience. However, we will continue to evolve the format of our music offerings to ensure we’re offering relevant options for our customers.” 

Authentic acquires a pair of Dragons with opportunity for expansion: The managed pub operator Authentic Pub Co has acquired a pair of former Orchid Pub Company sites in Surrey trading under the “Dragon” format, combining a local pub with a Thai restaurant and takeaway. At the same time, Authentic Pub Co has become sole operator of the Dragon format, creating opportunities for the brand’s expansion. The two new pubs, which take Authentic’s estate to six, are the Norbiton & Dragon at Norbiton, near Kingston, and the White Lyon & Dragon at Worplesdon, near Guildford. Authentic has agreed lease terms with the administrators of the Orchid estate after the sale last year of the majority of Orchid sites to Mitchells & Butlers. The company will also be introducing the Thai menu at one of its existing sites, the Kings Arms in Epsom, Surrey. Authentic’s director Simon Bailey said: “These two pubs are a great fit with our existing estate, both geographically and in trading terms. The Norbiton & Dragon is close to our current sites, so the Thai menu gives us a point of difference, while the White Lyon enables us to expand our trading footprint further west into Surrey. We feel very positive about taking over the Dragon concept, which is a proven success. Reflecting our name, it allows us to offer authentic Thai food as well as authentic British food, both as part of an Authentic Pub experience. That enables us to look at a wider range of pubs as we continue to expand. We’re also delighted that we’ll be able to bring freshly-cooked Thai food to the Kings Arms at Epsom. The Dragon format has proved very popular in the Epsom and Ewell area at two previous sites, and gives us an outstanding opportunity.”

TGI Friday’s and PizzaExpress sign for Resorts World Birmingham at NEC: TGI Friday’s and PizzaExpress have signed to open outlets at the new £150m Resorts World Birmingham hotel and entertainment complex being built at the National Exhibition Centre. TGI has signed a lease for a 6,200 sq ft space and PizzaExpress will take 3,000 sq ft. Resorts World Birmingham claims to be the first facility of its kind to open in Europe, combining retail outlet shopping, hospitality and entertainment under one roof. It is owned and operated by Genting UK, part of the Genting Group, one of Malaysia’s largest corporations, which has leisure interests across the world that include resorts, casinos and cruise lines. Resorts World Birmingham includes a four-star boutique hotel and spa, a cinema and a casino. Almost 80% of space across the scheme is now let, according to Genting, and inquiries into the outstanding retail space in the 50-unit outlet centre remain strong, with many units now in the latter stages of negotiation. The complex is due to open in the summer.

Ryan Giggs and Gary Neville win permission for hotel and restaurant in former stock exchange: The ex-footballers Gary Neville and Ryan Giggs have won planning permission to turn Manchester’s former stock exchange building into a boutique hotel, restaurant and bar. The two, whose first hotel venture, Hotel Football, opens next to Manchester United’s Old Trafford ground on 2 March, can now turn the historic grade II-listed building at 4 Norfolk Street into a 35-bedroom property with a rooftop terrace, bar, restaurant gym and business space. Manchester planners, giving the project the green light, said: “We believe this overall proposal brings a historical piece of Manchester back into existence to be experienced and enjoyed inclusively by the public.” Giggs and Neville acquired the building, which was built in 1906, for £1.5m in 2013. In 2004 it had been valued at £4.7m.

Gloucester Brewery to open nano-brewery and craft bar at Gloucester Docks: Gloucester Brewery is planning to open a craft beer bar and nano-brewery at Gloucester Docks, called Tank Gloucester, in time for the Tall Ships Festival in May. The pub forms part of recently unveiled plans by the brewery to move production and its visitor centre into the nearby 19th century building, Fox’s Malthouse. Jared Brown, director of Gloucester Brewery, said: “The bar will have everything you can’t get in Wetherspoon – we will be offering a niche range of drinks.” Tank Gloucester will also feature cheeses and deli boards to go alongside their speciality beer. Meanwhile, work started today on a third JD Wetherspoon pub for Gloucester, also set Gloucester Docks, which will open on 30 June. Builders are currently at work on the former Coots Cafe building, next to the Waterways Museum, to open the pub, which will be named the Lord High Constable.

Martin Morales names 30 March as opening date for Ceviche Old Street: An opening date of 30 March has been set for the opening of Martin Morales’s second Ceviche restaurant, off Old Street in the City of London. Ceviche Old Street is housed in the historic Alexandra Trust Dining Rooms in Baldwin Street, off the City Road, Old Street, EC1. It has a 70-seater dining room and a separate bar that fits a further 60. Food will be served in both the bar and restaurant, and according to Morales, the menu will “introduce new Peruvian flavours into the London dining scene”. It will have a “ceviche bar” where customers can watch ceviches being made in front of them and be able to customise their own dishes. Ceviche was founded in Soho, central London in 2012. In 2013 Morales opened another outlet, Andina, in Shoreditch, East London, serving a mixture of Peruvian and British dishes.

Former Wolverhampton Walkabout on market: The former Walkabout venue in Wolverhampton, one of six outlets closed by brand owner Intertain as part of its restructuring plans, has been put on the market by agent Fleurets, either freehold, with offers sought in excess of £625,000, or on a new free-of-tie lease. The grade II listed building, at one time a county court, covers 5,750 sq ft on the ground floor and 3,598 sq ft on the first floor. It also has an external courtyard at its rear provides an opportunity for outside customer seating. Anthony Barnes of Fleurets’ Birmingham office, said: “The property is suitable for a variety of styles of licensed retailing and could make an interesting opportunity for a restaurant. 50 Queen Street is conveniently located just to the eastern edge of the central shopping district.” In September last year, Intertain spent £250,000 rebranding the Wolverhamptom Walkabout as the Stone House, a nightclub open from 10pm until 3am, Tuesday to Saturday.

Orchard Pig launches cheeky take on election fever at Propel event: As election fever hots up, Somerset-based cider and juice company Orchard Pig has brought some mischievous fun to the campaign trail by launching its light-hearted ‘Your Duty to Vote…Aiming for Lower Duty’ concept at yesterday’s Propel Multi-Site Management Masterclass. Those attending the conference were invited to cast their ballot using blow darts to vote for who they want to be the next chancellor. The custom-made target had Apple-topped images of current chancellor, George Osborne and the shadow chancellors of the two other mainstream parties, Danny Alexander (Liberal Democrats) and Ed Balls (Labour Party). Points were collected on a leader board, with industry figures able to compare their scores against their friends, contacts and even the competition. Andrew Quinlan, Orchard Pig founder, said: “As the election comes ever closer and politicians get ever more heated about their stance on key issues, we wanted to bring some fun to the event and encourage people to lighten up.”

Restaurateurs with top TripAdvisor rankings seek fourth outlet: Jonathan Hall and his business partner, the award-wining chef Marcus Bennett, whose two restaurants in Yarm, North Yorkshire are numbers one and three out of 38 eateries in the town on TripAdvisor, have revealed that they are looking for a fourth outlet. The two currently run Muse, “a European cafe with a buzz about it”, and Cena, an Italian restaurant, and also the Bay Horse in Hurworth-on-Tees, Durham, a gastro-pub that was awarded a Michelin Bib Gourmand for the fifth year running, one of just three venues in the whole of the North to be given the accolade. Hall told The Middlesbrough Gazette newspaper that since Cena opened last summer, “it’s already proving a great success”. He added: “We’re looking at new sites to open our fourth restaurant in the near future.” Hall and Bennett invested £300,000 in opening Cena.

Gelupo falls foul of mice infestation: An artisan ice cream parlour and deli in Soho was closed down by health inspectors after being overrun by mice. Gelupo in Soho was forced to shut for a week in November after officials from Westminster council found that it was littered with rodent droppings. A spokesman for Gelupo confirmed that the deli, which had a five-star rating before the November inspection, had been closed following the visit. He told the London Evening Standard: “Gelupo has since received very positive feedback from Westminster council who have returned to check the premises and are completely satisfied with the high standards being upheld. They will return in March to issue a new star rating which Gelupo is confident will be high. Pest control have also visited approximately eight times since the issue and are also completely satisfied with the results of their visits. This is the first time an issue such as this has happened at Gelupo and it has been treated with the utmost severity.”

Greene King appeals over Hungry Horse refusal in Perth: Greene King is appealing to the Scottish government over a refusal by councillors in Perth to grant it permission to open a Hungry Horse pub-restaurant at the Broxden Business Park on the edge of the town. In December, councillors agreed that the site should be preserved for office development, creating “higher value” employment, refusing permission for both the pub and a drive-through branch of Costa Coffee. Objectors also feared the development would lead to an increase in litter and anti-social behaviour. However, Greene King is arguing that there is already an oversupply of offices in Perth and little interest from potential employers in the site. In a submission to the Directorate for Planning and Environmental Appeals in Edinburgh, agents acting for Greene King said that there was “currently a high level of vacant office space within Perth, with a weak demand for both established and new-build office premises.” The agency Turley said: “The proposed development will assist in attracting future employment users to the vacant, adjacent plots.”

Patisserie Valerie to open fourth venue in Glasgow: The cafe chain Patisserie Valerie is to open its fourth venue in Glasgow. The Birmingham-based company, which operates around 100 outlets across the UK, said the new outlet on Royal Exchange Square will be its ninth in Scotland, which includes four in Edinburgh and one in Aberdeen. Its other outlets in Glasgow are at Central Station, Silverburn and West Nile. Patisserie Valerie, which has Luke Johnson as its executive chairman, recently launched a new lunch delivery service in London and Leeds, which is being expanded across its UK operations. 

Mark Hix to open pop-up bar and restaurant for Cheltenham race week: The chef and restaurateur Mark Hix is to open a pop-up restaurant and bar during Cheltenham race week in collaboration with the boutique hotel and bar group The Lucky Onion. The private HIX club and restaurant will be at The Lucky Onion’s 13-bedroom hotel No 38 The Park in Cheltenham between 10 and 13 March. It will have a Mark’s Bar for all-day cocktails and a Hix restaurant with a “British” offering designed exclusively for the Cheltenham races. Hix, whose Restaurants Etc has seven outlets, told the Gloucester Echo: “I’m looking forward to taking Mark’s Bar to the countryside this year to celebrate Cheltenham races in collaboration with The Lucky Onion. It’s not only because it’s a great British event, but also because much of the essence of Mark’s Bar is inspired by old English country drawing rooms with their historical curiosities, threadbare rugs, leather chesterfields and English eccentricities and we’ll have fun recreating a part of this in the beautiful Georgian Townhouse No 38.” The Lucky Onion runs five venues in and around the Chilterns, including the Chequers, Churchill and the Wheatsheaf, Northleach.

Barburrito launches extreme videos and extreme menu item: Working in partnership with the Nottingham University Sky Diving Society, Barburrito, the burrito brand led by Morgan Davies, has launched the first in a series of ‘Extreme Burrito’ videos. The video, which can be viewed on Barburrito’s website, shows Nottingham University student, David Alatorre, jump out of plane at 10,000 feet tucking into a large burrito. It’s part of a campaign that encourages customers to create their own video for a chance to win a year’s supply of burritos. Customers can also try the brand’s limited edition Extreme Salsa that includes Scotch bonnet, naga buht and habanero chilies. Davies said: “We are committed to perfecting burritos for all tastes and our new Extreme Salsa is a cracker – very tasty and extremely hot. The extended promotion is a great opportunity to have some fun with our customers and the Barburrito brand!”

Northumberland hotel operator moves west: The Northumberland-based hotel group Guyzance Hall has bought its first property in Cumbria, the four-star Wordsworth Hotel and Spa in Grasmere, for an undisclosed sum. It joins the company’s existing five properties, Doxford Hall, Chathill Northumberland; Guyzance Hall, Morpeth, Northumberland; Eshott Hall, Morpeth, Northumberland, Ednam House, Kelso, in the Scottish Borders; and Dalhousie Castle, near Edinburgh. Guyzance Hall’s operations director, Eric Kortenbach, said: “The hotel fits in perfectly with our collection of properties and has achieved many successes in recent years. We intend to invest in both the hotel and staff, and hope to encourage our guests from the north to visit Grasmere.”

Starbucks plans second Scottish drive-through in Dundee: Starbucks is hoping to take on one of three new units which have been proposed for derelict land in Dunsinane Industrial Estate, Dundee for what would be only the second drive-through Starbucks north of the border. The pizza delivery chain Domino’s, which already has outlets nearby in City Quay and Broughty Ferry, has also committed to taking on a lease at the site. If the plans are passed by Dundee Council, the two franchises are together expected to create around 80 jobs. A report submitted to the council on its behalf by Perth-based MBM Planning and Development Consultants said: “The units proposed in this application offer something different to the sizeable public house and restaurant uses that have already been granted planning permission in the area.” Starbucks had previously considered other sites in the city, including the Stack Leisure Park and the centre of Lochee, but ultimately ruled them out. Instead it decided that the location at Dunsinane Industrial Estate met its strict selection criteria because of the high volume of passing traffic and ease of access. The first Scottish drive-through Starbucks is expected to open in Dunfermline in the summer.

Star Pubs puts popular football pub on market for £150,000: Star Pubs & Bars has put a popular Dundee pub only a short walk from the city’s two football grounds on the market for £150,000. The pub is being marketed by the property agency Ryden, whose Andy Macpherson told The Evening Telegraph newspaper: “The most likely future for the building will be a pub, based on the fact we have already had a lot of interest from publicans looking to take it over. The pub has been owned by Star Pubs & Bars for years, but this is one of their pubs that has been identified for disposal. Being close to both stadiums in the city is certainly one of the reasons I think it will remain a pub. It gets a lot of business from fans travelling to matches and it also has a strong local customer base.”

Britain’s remotest pub in planning row over staff accommodation: The owner of the Old Forge Inn at Inverie on the west coast of Scotland, Britain’s most remote mainland inn, is fighting for permission to build staff accommodation he said is badly needed because it is hard to find enough workers in the location. The pub, on the Knoydart peninsula in Lochaber, can only be reached by boat, or walking 18 miles over several 3,000ft mountains from the nearest road. Its Belgian owner, Jean-Pierre Robinet, has applied for planning permission to build manager’s and staff accommodation. Robinet said in his own submission to the local authority: “In such a remote location as this there is a requirement to import seasonal staff to support the business. As a result of the poor temporary accommodation presently available for the staff and manager it has been difficult to recruit and retain suitable staff. It is therefore essential to the longer-term interests of the business to improve the standard of living provided to staff in order to attract the appropriate quality of personnel.”

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