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Thu 9th Aug 2018 - Propel Thursday News Briefing

Story of the Day:

Greene King executives opt to freeze salaries as company looks to control costs: Executive directors of brewer and retailer Greene King have had their salaries frozen this year – by themselves. Chief executive Rooney Anand and chief financial officer Richard Smothers have taken the decision not to have a pay rise this year as the company looks to control costs. It means Anand’s salary for the 2018-19 financial year will remain at £645,000 while Smothers, who joined the company in December and was promoted to the board in February following Kirk Davis’ departure, stays at £450,000. Writing in the company’s annual report, remuneration committee chairman Lynne Weedall said: “Executive directors’ salaries are generally reviewed annually but there will be no increase for the 2018-19 financial year at the recommendation of the executive directors, reflecting their alignment with a focus on the control of costs.” The report showed Anand’s total remuneration for the year ending 29 April 2018 increased to £1,254,000, compared with £1,154,000 the year before. This consisted of £645,000 salary, £29,000 taxable benefits, £161,000 in pension-related benefits and a £419,000 annual bonus. Davis received a total of £475,000 up to his departure on 31 January, while Smothers was paid a total of £303,000, including a £90,000 bonus. Last month, Greene King announced a proposed restructure of its office teams based in Bury St Edmunds and Burton-upon-Trent. It is understood about 100 roles in total are at risk across the two locations, although 25 roles will be created as part of the proposal in addition to available vacancies.

Industry News:

Chris Muller Multi-site Management Masterclass opens for bookings: Propel will host Professor Chris Muller, the leading thinker, teacher and author on multi-site foodservice management in the US, at its next Multi-site Management Masterclass. The event, which will focus on growth through innovation and branding and features all-new material, will take place on Friday, 28 September at One Moorgate Place in London and is open for bookings. Leading UK businesses such as Mitchells & Butlers and TGI Friday’s have sent staff to be taught by Professor Muller at Boston University’s School of Hospitality – now Professor Muller is returning to the UK to lead this bespoke interactive masterclass. The event will provide valuable insights as well as new perspectives and practical knowledge for founders, area managers of small and medium-sized multi-site companies and area managers of large companies. The sessions will include building a culture of profitable sales and service, using a restaurant brand as a competitive tool and becoming a leader of change. Tickets are £295 plus VAT for Propel Premium members, £345 plus VAT for operators and £445 plus VAT for suppliers. To book tickets, email Anne Steele at 

Fake five-star hygiene rating results in ban for restaurant boss: The owner of a restaurant in Derby has been banned from running companies for five years after he falsely advertised a five-star food hygiene rating in a local magazine. Rushan Ahmed, of Walsall, was the sole director of Four Brothers (Derby) and ran Indian restaurant Moza Derby in the city. Following a visit from the city council’s food safety team in February 2015, the restaurant was given a food hygiene rating of one, which was amended to zero in July that year as no action was taken to get its “house in order”. Despite the low hygiene rating Ahmed placed three adverts in a local magazine where he stated the restaurant held a five-star rating. This resulted in the council’s trading standards team taking Four Brothers to court in April 2016, where Ahmed admitted the company had engaged in unfair commercial practices. The company was fined but as the restaurant was not profitable, Ahmed decided to cease trading in September 2016. After Four Brothers closed, the Insolvency Service looked into the conduct of Ahmed and in June 2018 a disqualification order was made against him for five years effective from 19 July 2018. Insolvency Service chief investigator Dave Elliott said: “A zero food hygiene rating should have rung alarm bells for Rushan Ahmed and forced him to get his house in order. But he decided to publish a bogus five-star hygiene rating designed to draw in business by making a false representation for commercial gain. This ban should serve as a warning to other directors tempted to engage in unfair commercial practices.”

UKHospitality demonstrates dynamic membership as it welcomes new operators from across sector: UKHospitality has augmented its position as the authoritative voice for the industry by welcoming a host of new members. The companies span almost every aspect of the sector including casual dining, leisure parks, quick-service restaurants and bars, and join more than 700 businesses represented by the trade body. The new members are Boparan Restaurant Group, Center Parcs, Chestnut Group, Chopstix, Dishoom, Green Tourism, Loungers, Nando’s, Pret A Manger, Smith & Wollensky, Vaulkhard Group and Wolf Leisure. UKHospitality chief executive Kate Nicholls said: “The variety of this latest group of members highlights the vibrancy of this fantastic sector. Hospitality in the UK is a broad and lively brush and our membership reflects that.”

Restaurateur David Moore launches petition lobbying for VAT cut and business rates alternative: David Moore, owner of Michelin-starred Pied-à-Terre, has launched a petition calling for a cut in VAT and a look at alternatives to business rates. In the petition – STOP The High Street Armageddon – Moore is recommending a sales tax as an alternative to business rates and a cut in VAT on food sales to give the restaurant industry breathing space. Moore also wants a review of leaseholds to not focus on rent per se but on the contractual “upwardly moving only” clause that ties tenants into increasing rental costs, even in a downturn. He argues that before the Brexit vote many restaurants were expanding to cater for a forecast rise in demand for eating out but since the vote that had tapered off dramatically. As a result of increased costs, weaker consumer confidence and rising inflation, restaurant chains such as Gaucho, Jamie’s Italian, Prezzo and Byron had been forced to close outlets across the UK to restructure, Moore said. He added that medium-sized groups were cancelling openings and smaller independents were struggling to make ends meet with at least a third of the UK’s top 100 restaurants losing money. Moore said: “This is not just a fight to save the popular chains but a battle to give relief to small family and independent businesses. We have to take a stand. The restaurant business on the high street, which employs hundreds of thousands of people in the UK, needs urgent help to survive.” To sign the petition, click here

UK’s youth reveals aversion to meat and alcohol – report: Fewer than three-fifths (59%) of Generation Z are meat eaters compared with 90% of the rest of the population, while 39% claim to be teetotal, according to a new report by insights agency KAM Media. However, government statistics showing a rise in liver disease, diabetes and alcohol-related problems suggest a polarisation in the younger generation between those who refrain from drinking too much alcohol and those who overindulge. The Tomorrow’s Shopper Today report focused on the beliefs, ideals and ethics of Generation Z (18 to 24-year-olds), asking them what they expect from brands in the on-trade and off-trade. The study stated the generation expects to have vegetarian, vegan and gluten-free options available in stores and foodservice outlets, while almost nine-tenths (87%) believe nutritional information should be displayed on menus. When it comes to technology, almost one-quarter (23%) spend more than seven hours on their phone a day, while 25% spend more than seven hours online per day, often juggling as many as five screens at once when browsing online. The report’s author, Blake Gladman, said: “Generation Z will shape the way we shop, eat, drink and interact with brands because technology will lead the way and it’s being driven by the influencers – no generation is more influential than Gen Z.” KAM Media spoke to 500 UK people aged between 18 and 24.

Great British Beer Festival highlights independent brewers: The Campaign for Real Ale (CAMRA) has teamed up with the Society of Independent Brewers (SIBA) to highlight independent craft brewers at the Great British Beer Festival. The move follows a YouGov survey that found the majority of craft beer drinkers value independently owned brewers with almost three-quarters (74%) concerned they are being acquired by large drinks companies with marketing remaining the same despite the acquisition. CAMRA is backing SIBA’s Assured Independent British Craft Brewer initiative at its flagship event by displaying the Assured “seal” on banners and tasting notes. Festival organiser Catherine Tonry said: “One of the delights of beer appreciation is the unexpected alchemy that comes from the skill and creative input of individual brewers, which is why local, artisan brews have sustained popularity.” SIBA chief executive Mike Benner added: “Beer drinkers want to know the brew in their glass has been made by a truly independent craft beer brewer and SIBA is delighted to see CAMRA backing the Assured Independent British Craft Brewer initiative.” The festival runs until Saturday (11 August) at London’s Olympia.

BBPA publishes new cost benchmarking data for tenants and lessees: The British Beer & Pub Association (BBPA) has published the latest edition of its operating cost guide for tied tenants and lessees. The guide provides information for prospective tenants and lessees on typical operating costs and gives existing tenants and lessees an opportunity to compare their costs with industry norms. New to this year’s guide are paid television and live music costs, as well as a town/country model. The guide shows the average cost of running a leased or tenanted pub over eight pub models based on turnover and business type. It takes account of significant variations in the cost base, even with pubs in broadly the same category. The guide’s input data and sources change each year and the BBPA said the information should not be used to determine trends from year to year. Actual costs incurred also depend on the aims and styles of the business according to its location, market, and skills of the tenant or lessee. As well as providing average costs, the guide also includes minimum and maximum typical costs, providing a range of scenarios across different types of business.

Dining card business expands partnership portfolio with Meerkat Meals: Huddersfield-based The Dining Club Group has partnered with a price comparison site to start Meerkat Meals. The bespoke dining product offers Compare The Market customers two-for-one meals at thousands of restaurants across the UK for a year. Matt Turner, founder of Tastecard and chief executive of The Dining Club Group, told The Business Desk: “We are excited our two industry-leading businesses have come together and look forward to providing unbeatable rewards to customers.” The Dining Club Group engages four million members spending more than £600m a year in the UK and Ireland across three dining discount card schemes – Tastecard, Gourmet Society and Hi-life.

More than half of Brits ‘head to pub in spare time’: More than half (53%) of Brits head to the pub in their spare time, according to a new study by Japanese beer brand Kirin Ichiban. The survey of 2,000 adults found Brits have less spare time than ever, with more than half (52%) having an average of only ten free hours a week. When at the pub, more than two-thirds said quality (70%) was their top preference for choosing a beer followed by taste (61%), while 36% would pay more for a “pure” beer. Almost two-thirds (65%) of respondents said they were keen to try something new. Millennials were the most adventurous demographic, with almost one-third (31%) seeking global beers. More than three-quarters (79%) of respondents rated philosophy and brand heritage as “highly important” when choosing a beer, with 49% looking for the best ingredients. Marston’s head of commercial marketing John Clements said: “Consumers are more time-poor than ever and what is interesting is consumers are looking to spend those precious hours in pubs. It’s fantastic to see people are still in love with their local.”

Company News:

3Sixty Restaurants plans four further Ego openings this year as it sees losses narrow: 3Sixty Restaurants, led by James Horler and backed by Luke Johnson, plans to open four more Ego sites in its current financial year as it prepares to open its 16th site for the brand. The company revealed its plans as it reported turnover increased to £19,458,251 for the year ending 25 March 2018, compared with £18,895,687 the previous year. Ebitda before exceptional one-off costs and pre-opening costs was up to £1,004,965, compared with £955,908 the year before. Pre-tax losses narrowed to £67,576 compared with £1,857,004 the previous year, according to accounts filed at Companies House. Following the period end, the company has acquired one pub – The Fox at Haslington – which is due to open this month with plans to open a further four sites during 2018-19. In May, the company disposed of Saltwater in Nottingham. An onerous lease provision of £300,000 was made in the period for this site. In their report accompanying the accounts, the directors stated: “The directors are very pleased with the significant progress made throughout the period, opening one site and taking the total number of sites under the Ego brand to 15. With a strong balance sheet and a clear focus on opening more Ego sites, we are in a strong position and remain cautiously optimistic. Overall gross profit of 68% has reduced slightly due to promotional activities, while labour percentage reduced by 5.36% due to efficiencies and new sites trading for more than 12 months. Administrative costs have increased £3.4m due to costs associated with the opening and development of the newer sites together with a provision of £300,000 for an onerous lease disposed after period end. The focus in 2018-19 will be to increase sales further throughout the group and expand with the introduction of further pub sites. Our employees within Ego increased to 597, an increase of 16.6%.”

SSP brings spirit of Camden to London Stansted airport: SSP, the operator of food and beverage brands in travel locations worldwide, has launched new concept The Camden Bar & Kitchen at London Stansted airport. Set across two floors and seating 350 people, the 700 square metre restaurant features a full-service premium bar on the upper level and a bar and deli for “grab and go” on the lower level. The new offer draws inspiration from Camden and its market stalls. The lower-level bar has an industrial feel and features a steel stairway connecting the kitchen and restaurant. The Camden Bar & Kitchen has worked with a group of post-graduate students from St Martin’s College to create a mural of London’s street food scene alongside artwork by local artists the Graffiti Kings. The morning menu includes a “Rise & Dine” offer featuring classic breakfast dishes, while the main menu features fish and chips, steak, egg and chips and salads alongside double-stacked burgers and Thai and Indian-influenced street food. The menu also features a rotating slot from Camden street food vendors, starting with Baba G’s Crazy Lamb Jalfrezi Burger. Local beers including Camden Hells Lager and Camden Pale Ale from Camden Town Brewery are on offer alongside premium beer, wine and cocktails. The bar’s “Glow Zone” houses LED light pads and wireless charging points that light up when customers charge their phones. Simon Smith, chief executive of SSP UK and Ireland, said: “The Camden Bar & Kitchen transforms one of the largest and most prominent spaces in the airside departure lounge into a modern eclectic restaurant that reflects the spirit of contemporary London and its most famous food market.”

McDonald’s to turn High Street Kensington site into reservation-only restaurant: McDonald’s is transforming its store in High Street Kensington into a reservation-only restaurant. The move will correspond with the company’s roll out of its Signature Collection, with the restaurant aimed at attracting the Instagram crowd. Customers who book the “VIP dining experience” will be welcomed into the restaurant by a string quartet and escorted to their table. They will be able to choose from a classic, BBQ or spicy signature burger and will be served by white-gloved butlers, the Evening Standard reports. The site will also feature velvet curtains, burger-focused art and “diamond-encrusted” cutlery. Bookings are open for the one-off event, which will take place on Thursday, 15 August. Earlier this year, McDonald’s turned one of its Newcastle restaurants into a “romantic dinner for two” destination.

Black Sheep Coffee opens first overseas site, ‘many more’ to follow: London-based independent coffee shop Black Sheep Coffee has opened its first overseas site, in the Philippines, with “many more” to follow. Co-founder and co-chief executive Gabriel Shohet said: “We just opened in Manila – our first shop outside our UK home market. Coffee lovers in the Philippines will be able to enjoy speciality-grade 100% Robusta coffee, our famous Black Hoof signature drink, freshly made Norwegian waffles and the best espresso martinis in town – all in a shop filled with awesome graffiti by London’s coolest street artists. This is just the first of many more Black Sheep shops to open in Asia and the Middle East in the coming months.” Black Sheep Coffee has 20 sites in London and two in Manchester.

Elan Cafe takes on former Coppa Club site in Oxford Circus for third London venue: Brunch and healthy eating concept Elan Cafe has taken on a former Coppa Club site for its third London venue. Elan Cafe has taken over the lease of the building in Market Place, Oxford Circus, through agent Shelley Sandzer. The cafe will cover the ground floor and basement of the property with a large outdoor terrace at the front. Elan Cafe, which has sites in Park Lane and Brompton Road, has become well-known among Instagrammers and bloggers due to its flower walls, pink colour theme, marble tables and latte art. Founder Alexandra Miller said: “We are grateful to Shelley Sandzer for helping us find and secure the perfect site. We can’t wait to share our passion for coffee at this fabulous new location.”

Former Kurobuta chef to launch vegan concept in north London next week: Daniele Aloi, former chef at Japanese rock ‘n’ roll concept Kurobuta, is to launch a vegan restaurant in Stoke Newington, north London. Stokey Veg Vegan will open in Stoke Newington Church Street on Tuesday (14 August) offering British and Italian vegetarian and vegan small plates. Aloi, who is also former head chef of Haggerston-based pizza and pool concept Proud East, will launch Stokey Veg Vegan with London businessman Ali Kalkan. Dishes on the menu will include toasted beetroot tartar, black sesame burger with guacamole in a sourdough bun, and pistachio vegan tiramisu, Hot Dinners reports. Former Nobu head chef Scott Hallsworth launched Kurobuta as a pop-up before opening permanent sites in Chelsea and Marble Arch.

Lincolnshire council buys second leisure investment, a gym in Sheffield: A Lincolnshire council has acquired a gym and a lingerie factory in Sheffield, South Yorkshire, for £5.5m. West Lindsey District Council said rent from the properties, occupied by Better Gym and Panache Lingerie, would help pay for public services. The local authority spent £2.35m on a Travelodge in Keighley, West Yorkshire, last year. According to the Local Democracy Reporting Service, the purchases will see the council collect £164,000 a year in rent for the gym in Penistone Road, which it bought for £2.5m. It will also receive £275,000 a year for the factory unit at Drake House Crescent, for which the council paid £3m. However, opposition groups have criticised the council for making investments outside its area. Alan Robinson, strategic lead for people and governance at West Lindsey District Council, told the BBC the potential income from rent and future resale would “enable further investment in West Lindsey to support services, economic regeneration and growth”. He added: “This income is vital in providing much-needed revenue for the council, supporting the continued provision of services in West Lindsey.” He said the council followed a stringent set of guiding principles before it made the investment.

Teesside-based restaurant to open dessert-only takeaway for third site after sales surge: Teesside-based restaurant The Vault is to open a takeaway that sells desserts only for its third site after noticing a surge in orders for its sweet treats. Owner Arran Addison launched The Vault in Marske in 2016 and with the restaurant “constantly turning people away”, he opened take-out The Vault Hatch to keep up with demand. Addison noticed almost “every single person” was ordering sweets and desserts to accompany their parmos and pizzas so he will launch Snackflix And Chill in Longbeck trading estate in the town on Tuesday, 21 August. Snackflix And Chill will sell treats such as milkshakes, locally sourced ice cream, cheesecake and other desserts, and US-imported sweets. Addison told Gazette Live: “We noticed a big gap in the market – we sell lots of sweets and cheesecakes. This will focus around family, kids and watching movies.”

Soren Jessen and workspace firm Fora open Scandinavian restaurant in Borough: Soren Jessen, who launched Ekte Nordic Kitchen in Bloomberg Arcade in the City of London in April, has teamed up with workspace firm Fora to launch a Scandinavian restaurant in Borough. Jessen has opened Borealis on the fifth floor of Borough Corner – a new development in Borough High Street that is also occupied by Fora. Borealis offers 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 also offers 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.

Seafood and champagne brand Fisk to launch lounge-style bar in Cheshire for third site: Seafood and champagne brand Fisk is to launch a lounge-style bar concept in Prestbury, Cheshire, for its third site. The company made its debut in Harrogate in 2016, opening a second bar restaurant ten months ago in Prestbury. Fisk will turn that site into a sit-down restaurant only and launch Pol Roger Champagne Lounge at a nearby former Co-operative Food store in the autumn. Fisk managing director Stuart Williams told So Cheshire: “Since opening in Prestbury it became clear we needed extra space for our customers to enjoy pre-dinner and after-dinner drinks. We decided to convert the restaurant into seating only and move the bar into a vacant property. We believe the lounge-style bar will complement our restaurant and showcase our partners further in the village.” Co-owner and chef Kanyana Williams added: “We’ve had tremendous support from locals. Fisk has also attracted diners from further afield and we need more room.” In February, the Williams said they were looking for sites in the Home Counties for expansion, with plans to expand internationally.

BabaBoom starts expansion by opening at former Des McDonald site in Islington: Middle Eastern restaurant concept BabaBoom has started expansion by opening its second site, in Islington, north London. The 1,500 square foot site in Upper Street was previously operated by Des McDonald under his Vintage Salt brand. BabaBoom’s 70-cover restaurant continues the concept’s focus on Middle Eastern-inspired kebabs made from scratch and cooked over coal, with the addition of its own draught brew, Baba’s Beer. BabaBoom opened its debut 42-cover site in Battersea Rise in autumn 2016. As a stepping stone to the new launch, the company operated BabaBoom East – a six-month residency at Deliveroo Editions in Whitechapel. Co-founder Eve Bugler said: “We have created something special in Battersea Rise and now it’s time to bring it to Upper Street. It’s a competitive market but we like that – it spurs us on. As a former Islington resident, I’m really excited about launching in the neighbourhood.”

St Peter’s Brewery credits alcohol-free beer for ‘turning company around’ as it plans four-fold expansion: Suffolk-based St Peter’s Brewery has credited its 0.0% alcohol craft beer Without for “turning the company around” as it plans to quadruple production to cope with demand. The company has acquired land and added a bottling line funded by the European Agricultural Fund for Rural Development. St Peter’s Brewery launched Without Original in July 2016 and has added Without Gold and Without Organic since. The brands make up 30% of the brewery’s overall sales. Chief executive Steve Magnall said: “Without has turned the brewery around and taken us into profit in less than two years. With the new bottling line up and running, capacity at the brewery can grow from four million bottles a year to 16 million to meet growing demand for the product. There’s a huge demand for alcohol-free beer and, because we got in there early, we are leading the way.”

Nando’s launches agency review: Nando’s has launched a review of its advertising agency requirements for the second time in as many years. The company has sent out a request for information to agencies with the review in its early stages. Nando’s opted to hire Adjust Your Set following its last review in autumn 2016 when it chose to move into content publishing instead of hiring an agency to create more conventional, above-the-line ads. It is not clear whether Nando’s is now looking for an above-the-line ad agency to work alongside Adjust Your Set or replace it, reports Campaign. The review comes shortly after Nando’s completed a UK media agency pitch in which Essence won the business from seven-year incumbent Havas Media.

Access Group appoints product director for hospitality division: Software provider Access Group has appointed Dr Mat Wood to the newly created role of product director for its rapidly expanding hospitality division. Wood has more than 20 years of commercial software product experience, including the past two years as head of products for Zonal. In his new role he will look to close the gap between strategic, tactical and commercial goals working with the team to deliver on the customer product promise. He said: “Working with our five best-of-breed product teams, I will help to produce a market-leading hospitality software suite. Together we will ensure we both continue to help our customers maximise efficiencies and growth opportunities, and to deliver on our product promises.” Access Group’s hospitality division has more than 1,300 customers to date.

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