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Morning Briefing for pub, restaurant and food wervice operators

Wed 18th Jul 2018 - Propel Wednesday News Briefing

Story of the Day:

Matthew Kirby – motorway service stations a ‘recession-proof environment’: Chozen Noodle chief executive Matthew Kirby has branded motorway service stations a “recession-proof environment” that provides a steadier stream of sales in tough times. Chozen Noodle has a franchise partnership with operator Roadchef, opening its first two motorway service station units in 2012. The brand has 25 sites across the UK – five of them owner-operated, the rest franchises – with about 15 of them at service stations. Sister brand Chow Asian Kitchen has 11 sites with franchise partner Moto, which has rolled out seven units since December. Speaking at the Propel summer conference, he told delegates: “The great thing about different channels such as motorway service stations is you’ve got a pretty recession-proof environment. When you get the highs of business it doesn’t go up as much but when you get the tough times they don’t go down as much – so you’ve got a much steadier stream. People will always travel and motorway service stations themselves have gone through a bit of a revolution. Today, if you go into Beaconsfield Services (Junction 2 of the M40) you can sit down at a Nando’s, you can go to McDonald’s and KFC or you can come to Chozen Noodle. In some of the units you see Pret A Manger and Tossed – you don’t have to have something that is deep-fried, you can have something that is pretty healthy and I think that reflects what the customer in the UK really wants. To be fair to the service station operators, they have gone through quite a transitional change. They’ve brought people like Chozen in – brands that aren’t necessarily the biggest in the world but when you go into motorway service stations you get something decent to eat. Another nice thing about motorway service stations is the online disruptors of this world haven’t found a way of dealing with that yet.” Asked by Propel managing director Paul Charity how the brands’ sales were performing at service stations, Kirby said: “We have had three or four years of very positive like-for-like sales, which I put down to two things. Firstly, Asian food has become a major trend in the UK. Secondly, people take a while to adjust their habits and patterns. Once they have seen you and tried you, rather than holding on to their bladders for another 15 miles until the next service station they’ll stop at Beaconsfield, for example. Just like any restaurant or pub business, you become part of that set pattern.”

Industry News:

Social Media for Profit masterclass opens for bookings: The second Social Media for Profit masterclass has opened for bookings. Mark McCulloch, founder and group chief executive of WE ARE Spectacular and formerly of Pret A Manger and YO! Sushi, will welcome you to a social media boot camp that will provide insights into how to build your sales and brand using social media. McCulloch will be joined by Alison Battisby, founder and director of social media consultancy Avocado Social. With almost ten years of social media experience, Battisby is a Facebook-accredited trainer and will bring the latest algorithm-busting insights to the afternoon. She will reveal the key trends you need to know – from Insta Stories stickers and IGTV to top hashtags and video hacks. Battisby will also reveal how Facebook, Instagram and Twitter algorithms work, what content is given priority and how you can get your posts seen by more people. She will also look at the best ways to use Facebook and Instagram ads to get a return for your business, including what makes a good advert and how to measure it. McCulloch will talk about designing your venue for Instagram and how to encourage user-generated content. He will also look at Instagram Stories and demonstrate the most interesting features and hacks to ensure your posts get seen. McCulloch will also talk about influencer marketing – does paying someone to post about your product really work? How are brands approaching influencer marketing and does the average customer trust a sponsored post on Instagram? There will also be a rundown of the ten key social media actions to take away. The half-day event takes place on the afternoon of Thursday, 13 September at One Moorgate Place in London. Tickets are £345 plus VAT for operators, £445 plus VAT for suppliers, and £295 plus VAT for Propel Premium subscribers. To book a place, email or call 01444 817691.

Martin Morales, founder of Ceviche and Andina brands, to feature in next video for Premium subscribers: Martin Morales, chief executive of Ceviche Family (, which runs six unique Peruvian-inspired restaurants under the Ceviche and Andina brands, will feature in the next 30-minute video to be sent to Propel Premium subscribers this Friday (20 July). A self-taught chef, Morales, who used to work alongside Steve Jobs at Apple and who won this year’s Propel Marketer and Innovator awards Innovator of the Year, talks about his career in the foodservice industry, going from giving up a successful career in the entertainment industry to operating six restaurants and a bakery serving different types of Peruvian cuisine, bringing together elements of fine dining, casual eating, regional cuisine, street food and entertainment. His website is Premium subscribers now receive weekly video recordings of key speakers from Propel events and conferences – the past five featured sector investor Luke Johnson, City Pub Company founder Clive Watson, brand strategist Ian Dunstall, Coaching Inn Group founder Kevin Charity and consultant James Hacon. Propel Premium subscribers also receive their morning newsletter 11 hours early at 7pm the evening before our 6am send-out, access to our database of 1,100 multi-site companies, and discounts to attend Propel conferences and events. Propel managing director Paul Charity said: “We plan to compile an invaluable library of senior leaders and advisors offering insights and advice, a resource Premium readers can tap into.” An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email to sign up or call her on 01444 817691.  

Goodbody – more sustained period of growth required before we claim consumer spend turnaround: Goodbody analysts have said a more sustained period of growth needs to be seen before inferences can be made about a turnaround in consumer spending. They added that while the hospitality sector had again shown good sales growth in June, the rate was slower than at the start of the year. They stated: “The Visa UK Consumer Spending Index for June showed overall consumer spending rose 0.7% year-on-year, following on from +0.9% in May. This represents the first back-to-back rise in more than a year. The hotels, restaurants and bars category was the best-performing sector in June, increasing 5.4% year-on-year, an acceleration of 2.1% in May. The June release follows several other positive data points seen this week (Coffer Peach, British Retail Consortium footfall data) and the growth is no doubt welcome. However, we would note that while the hotels, restaurants and bars category was the best-performing sector, growth rates are still falling short of those seen at the start of the year. The impact of good weather and the World Cup were undoubtedly the main drivers of this month’s performance and we would look for a more sustained period of growth before making inferences about a turnaround in consumer spending.”

UKHospitality backs call for business rates and wider tax reform: UKHospitality has welcomed the publication of a report by the All-Party Parliamentary Group For Entrepreneurship that calls for reform of the UK’s tax system – specifically highlighting business rates as a concern. UKHospitality chief executive Kate Nicholls said: “The report identifies considerable flaws in the current tax system and calls for a complete overhaul – something we have consistently called for. The current system of business tax is out of date and unsuitable for the realities of doing business in the 21st century. Arguably the principal challenge employers in the hospitality sector face remains business rates, which have not been reformed despite promises in successive manifestos. The report suggests the transformation of business rates into a tax on commercial landowners and on land rather than property would begin to address some of the imbalances in the current system and help reduce the unfair burden hospitality businesses face, particularly investment. Crucially, the government needs to accept there is a problem, acknowledge the creative solutions being presented and facilitate a formal review with businesses to find a workable solution.”

Plans approved for £10m Doncaster development with cinema and five restaurants: Plans have been approved for a development in Doncaster that will feature a cinema and five restaurants. Once complete in late 2019, the project will create more than 100 jobs. The development was originally to be delivered by Muse Developments but the scheme halted and Doncaster Council has stepped in to invest more than £10m of its Investment and Modernisation Fund. The council owns the site and has development consent. It has been working with cinema operator Savoy and said it had received interest from a number of restaurant operators. The development will be one of the final pieces of the jigsaw for Doncaster’s Cultural and Civic Quarter. The square has been transformed into a destination in recent years, with £20m investment in the Civic Office and £22m in the CAST performance venue, with £14m invested in the forthcoming Culture and Learning Centre. Bill Mordue, cabinet member for business, skill and economic development, said: “The cinema and restaurant development is something residents have been waiting for a long time and it is great we are in a position to now deliver it. Once this development is complete, it will enhance the offer of the Civic and Cultural Quarter and bring even more visitors to Doncaster.”

Company News:

McDonald’s salads linked to 61 cases of intestinal illness in seven states, first lawsuit filed: McDonald’s restaurants in seven states are currently being linked to 61 victims sickened by a parasite-causing intestinal illness after eating salads served at several of its restaurants, according to Nation’s Restaurant News. One of those who became ill, Jennifer Smith, from Illinois, has become the first customer to file a lawsuit against the chain. She is seeking damages in excess of $50,000, according to a complaint filed earlier this week by two law firms. Lead attorney Ron Simon, of Houston-based Ron Simon & Associates, said Smith was a frequent diner at a McDonald’s in Washington, Illinois. In May and June she specifically bought salad. According to her suit, she became extremely sick around 5 June. She was later diagnosed with cyclosporiasis, an intestinal illness caused by a parasite. Simon said: “In this litigation, we will determine how this contamination occurred and prevent it happening again.” McDonald’s could not be reached for comment but the company has reiterated its commitment to providing high standards of food safety. McDonald’s has temporarily halted salad sales in roughly 3,000 of its restaurants in 14 states as it looks for a new lettuce blend supplier. That includes at least one restaurant in Ohio, Illinois, Iowa, Indiana, Wisconsin, Michigan, Minnesota, Nebraska, South Dakota, Montana, North Dakota, Kentucky, West Virginia and Missouri. 

Pret A Manger to introduce compostable cutlery: Pret A Manger is to introduce compostable cutlery to all its UK sites next year. In the meantime, the company is also testing keeping cutlery behind its tills to see if that will lead to a cut in the use of plastic items. Announcing the move on Twitter, it stated: “First we trialled wooden cutlery, and you told us it wasn’t up to scratch. The good news is we will introduce compostable cutlery to all our UK shops next year.” Pret A Manager is on a crusade to reduce its plastic usage. The company has extended its water bottle deposit scheme trial to Birmingham having launched a pilot in Brighton. Last month, chief executive Clive Schlee revealed reusable cup usage at its stores had increased by ten times since the company doubled the discount to 50p.

Signature Living explores new long-term funding streams as it reports turnover and pre-tax profit surge: Aparthotel developer and operator Signature Living has revealed it is exploring new long-term funding streams as it reported a surge in turnover and pre-tax profit. The company, founded by Lawrence Kenwright, saw turnover jump to £14,117,021 for the year ending 31 March 2017 from £8,253,634 the year before. Pre-tax profit climbed to £7,429,422 compared with £5,641,458 the previous year, according to accounts filed at Companies House. The company said it continued to be profitable in the current financial year. In his report accompanying the accounts, Kenwright stated: “The group continued to improve the performance of its core operations as well as exploiting further development opportunities. During the year, continued refinements to the structure of the group enabled management to closely monitor and control financial and operational performance and efforts have been made to secure cheaper and longer-term funding streams with a view to strengthening the group balance sheet and improving cash flow. In December 2016, the original investors in the Stanley Street Hotel had their capital returned and replaced with longer-term finance. This was a key transaction for the group in terms of proving that the original concept could be placed on a long-term sustainable footing. The group acquired the former Coal Exchange building in Cardiff, its first major venture outside its traditional base in Liverpool, as it began to execute its plan of rolling out its various brands across the UK. This will become a 197-bedroom hotel. Other acquisitions took place including bar restaurant Alma De Cuba. The second phase of the Shankly hotel was completed in January 2017, adding a further 40 bedrooms and the rooftop wedding and conference facility. During the year to 31 March 2017, Signature Living boasted a group occupancy of 94% with an average room rate of £252 in some units, both numbers way ahead of the industry norm. The group has continued to trade profitably in the current financial year with a number of the established hotel operations now building a trade history of several years, all of which generated healthy trading profits. Key new funding streams are being progressed as the group continues to move towards longer-term funding partners.”

The Cat’s Pyjamas secures fifth site, in Sheffield: Indian kitchen and craft beer concept The Cat’s Pyjamas has secured its fifth site, in Sheffield. The company has signed a lease for a site in Ecclesall Road, which was secured by agents Pudney Shuttleworth in an off-market deal. Alison White, owner and managing director of The Cat’s Pyjamas, currently operates two sites in Leeds and one in York. The company secured the former Prezzo restaurant in Albert Street, Harrogate, for its fourth site last month. 

3Sixty Restaurants to open 16th Ego site next month: 3Sixty Restaurants, led by James Horler and backed by Luke Johnson, will open the 16th site for its Ego brand next month. The company is investing £500,000 to transform The Fox in the village of Haslington in Cheshire. It will reopen as Ego At The Fox on Thursday, 23 August, creating 45 jobs, reports the Stoke Sentinel. The pub, which is a free-of-tie lease from Ei Group, will offer Mediterranean-inspired food and cask ale. Ego operates sites across the north west, Yorkshire and the Midlands.

Caffe Nero appoints Gareth Hopley as head of communications: Caffe Nero has appointed Gareth Hopley as head of communications, a new position for the brand. Hopley will report to founder and group chief executive Gerry Ford with responsibility for the brand’s internal communications. He will also lead PR and reputation management functions. Ford said: “Gareth has vast experience in leading communications in the hospitality industry. I’m delighted he has joined our team to support the continued growth of our business in the UK and abroad.” Hopley added: “The business has a remarkable track record of success built on an extraordinary culture of genuine love and care for its customers and its high-quality coffee.” Hopley joins the business from Pizza Hut Restaurants, where he ran communications during a turnaround programme that saw the brand sold to private equity and later to a multi-brand operator. He also sits on UKHospitality’s council. Caffe Nero, founded in 1997, operates more than 880 stores across nine countries.

Newport-based operators take on Admiral Taverns pub for third site: Newport-based operators Shelley and Andy Byers have taken on an Admiral Taverns pub in the Welsh city for their third site. The couple have reopened The Lamb in Bridge Street, which had been closed since April. The Byers are expected to keep changes to a minimum, with afternoon tea still on offer, but plan to update the menu. Andy Byers told the South Wales Argus: “It is a lovely pub right in the city centre and there’s not a lot we want to change. The Byers also own The Neon in Clarence Place and the Neon Bar And Lounge in Market Street.

SteakOut makes north-west move after securing former Chiquito site in Blackburn: London-based halal steakhouse brand SteakOut is to make a move into the north west of England with a site in Blackburn. The company, founded by Kaysor Ali, will open a venue in the former The Restaurant Group-owned Chiquito site at Lower Audley Street Retail Park. SteakOut is investing £300,000 in the venue, which is expected to open at the end of the month. The restaurant will have 170 seats – 130 inside and 40 outside – and create about 20 jobs, reports the Lancashire Telegraph. Ali opened the first SteakOut site in 2008 and now has seven venues in London and the south east and one in Leicester. The company is also set to open a restaurant in Coventry as it continues expansion.

Maxwell’s Restaurant Group to launch Old Compton Brasserie in September for tenth site: Maxwell’s Restaurant Group is set to launch all-day British concept Old Compton Brasserie in September. The company will open the venue in Old Compton Street, Soho, at a site formerly occupied by casual dining brand Muriel’s Kitchen. The 170-cover Old Compton Brasserie will offer fresh and seasonal British favourites with a “significant number of vegan options”. The space, which is being stripped back to expose original features, will offer an industrial-Bohemian feel with interesting items and sculptures sourced from markets and dealers in the community alongside pieces from local artists. The restaurant will feature a floating mezzanine, outdoor seating and a large horseshoe bar serving craft cocktails. The venue will take the group’s portfolio to ten sites, which includes Maxwell’s Bar & Grill and Tropicana Beach Club.

Milanese fine dining restaurant Camillo Benso to make UK debut next month: Milanese fine dining restaurant Camillo Benso, operated by F&C Group, will make its UK debut next month when it opens a sister site in Mayfair, central London. The restaurant will launch in Blenheim Street on Wednesday, 1 August offering a menu featuring ingredients delivered daily from Italy. Camillo Benso will also feature a bar offering cocktails and small snacks, while the restaurant will host regular live music sessions featuring “contemporary takes on classic Italian beats”. A team of Italian chefs will include Luigi Esposito, who honed his skills under Michelin-starred Antonino Cannavacciuolo. The menu will feature signature spaghetti dishes, favourites such as beef tartar and ragu meatballs, and desserts created by pastry chefs focusing on Neapolitan classics. There will also be a pizza menu, while bread will be made by Niko Romito, of three Michelin-starred restaurant Reale. Camillo Benso London is the latest addition to the portfolio of F&C Group, founded by Antonio Fantini and Massimo Sanità, which also operates Milanese restaurant Giannino. The Mayfair venture will be the group’s first overseas opening, with further sites planned for New York and Miami.

Alcoholic tea brand Noveltea launches £150,000 crowdfunding campaign: Alcoholic tea brand Noveltea has launched a £150,000 campaign on crowdfunding platform Crowdcube to grow the business. The company is offering 4.05% equity in return for the investment. Already, 129 investors have pledged £135,110 with 34 days remaining. The 11% ABV brand is stocked in John Lewis, Harrods and Fenwick in the UK and exports to China, Hong Kong and Germany. The company, founded by Vincent Efferoth and Lukas Passiain in April 2017, has a team of advisors that include The Head of Steam founder Tony Brookes and former Diageo director Alan Rutherford. The pitch states: “Noveltea disrupts the alcoholic beverage industry by introducing a distinctive product portfolio around the concept of tea – in two flavours. The Tale of Tangier is an infusion of Moroccan green mint tea with Caribbean rum, while The Tale of Earl Grey infuses Earl Grey tea with British gin and botanicals. Both are cold-brewed, vegan, free from artificial colours and manufactured in the UK. They can be served ice cold but also warm in the winter.”

Soren Jessen and workspace firm Fora to open Scandinavian restaurant in Borough next month: Soren Jessen, who launched Ekte Nordic Kitchen in Bloomberg Arcade in the City of London in April, is teaming up with workspace firm Fora to launch a Scandinavian restaurant in Borough next month. Jessen is set to open Borealis on Tuesday, 7 August on the fifth floor of Borough Corner – a new development in Borough High Street that is also occupied by Fora. Borealis will offer the “best of classic Nordic cooking”, focusing on seasonal, sustainable produce, much of it from nearby Borough Market, and marrying the “flavours of Nordic cooking and simple preparation with the freshest and finest local ingredients”. The restaurant will also offer market specials, a daily changing menu and a roof terrace, Hot Dinners reports. Fora operates two workspace venues in the Clerkenwell area, with its website listing a venue as “coming soon” in Reading alongside eight other London sites including ones in Fitzrovia, Soho and Shoreditch. Jessen, a former executive director of Goldman Sachs and UBS, left his City of London job to launch debut restaurant 1 Lombard Street in 1998.

Hard Rock International to open Dublin hotel: Hard Rock International is to open a hotel in Dublin. The company, working with hotel operators Tifco, will open the site in Lord Edward Street in 2020. The hotel will be built on the site of Parliament Hotel and the neighbouring Fashion House Building. The Fashion House will be rebuilt and transformed into the new hotel entrance and reception. The hotel will feature 120 bedrooms and suites alongside a restaurant and bar. Todd Hricko, senior vice-president and head of global hotel development for Hard Rock International, said: “Ireland has always been a place close to our hearts and it only seems right to open a Hard Rock Hotel in Dublin, given the city’s musical roots. This is an exciting opportunity to extend our presence in Europe and elevate the one-of-a-kind offering at Hard Rock Hotels to the next level.” Hard Rock International has a presence in more than 70 countries, including a restaurant in Dublin’s Temple Bar.

Social Pantry founder launches restaurant and cafe at historic Ealing house: Alex Head, founder of London catering company Social Pantry, has opened a restaurant and cafe at Pitzhanger Manor & Gallery in Ealing. Head has launched Soane’s Kitchen inside the walled kitchen garden at Pitzhanger Manor, which was built in the early 1800s by British architect Sir John Soane as a country retreat to entertain friends. The restaurant comprises a 70-cover dining space with flexibility to create a 30-cover private dining area. Produce is grown in the kitchen garden, dictating the daily menu. Grab-and-go offering, The Larder, acts as an extension of the main restaurant offering pastries, sandwiches and coffee. Soane’s Kitchen will also provide an events space. Head said: “Not only will we welcome Pitzhanger visitors and Ealing residents, we’re hoping Soane’s Kitchen will be a destination for Londoners – a ‘little retreat to the country’ as Soane liked to describe it.” Pitzhanger Manor & Gallery Trust director Clare Gough added: “We are excited by the quality offering and excellent service Soane’s Kitchen will provide.” 

Kafoodle selected for John Lewis innovation programme: Labelling and allergen compliance expert Kafoodle has been selected to join John Lewis Partnerships’ first retail technology innovation programme of 2018. The programme, JLAB, is one of the UK’s largest technology innovation programmes, this year running for the first time in partnership with retail and consumer sector company True. More than 100 startups and established businesses applied for the first theme – health and well-being. Kafoodle said it was relishing the opportunity to bring personalised food choices and meal options to Waitrose and John Lewis consumers. Kafoodle chief executive and co-founder Tarryn Gorre said: “It is fantastic Kafoodle has been given this opportunity to work alongside senior decision-makers at Waitrose to help showcase our technology and develop innovative ways of making it easier for consumers to make informed food choices.” John Vary, futurologist at the John Lewis Partnership and one of the pitch-day judges, added: “The businesses we’ve selected in the health and well-being space are truly innovative and we’re looking forward to helping them make their ideas part of our customers’ experiences. We’re passionate about exploring new concepts that will transform retail and drive creativity.”

Nottingham factory to be turned into aparthotel: A Victorian factory in Nottingham is to be transformed into an aparthotel. Nazir Asmal has had his plans approved by the city council to convert four-storey Palmerston House in Mount Street from educational use into a hotel, offices, training and meeting rooms, and workshops. The hotel would be located on the first, second and third floors with a total of 36 bedrooms. The plans are for 15 open-plan rooms across the first and second floors, each about 430 square feet. The third floor would have a further four rooms of the same size plus a couple of two-bedroom apartments with a living area, kitchen and bathroom. The lower ground floor would include five office rooms, three meeting/training rooms, the hotel’s reception and office, and two workshops. The building has a gross internal floor area of 36,654 square feet, Insider Media reports. A council document states: “The application notes local businesses would use the workshops and training areas to demonstrate products and as startup or expansion facilities.”

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