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Morning Briefing for pub, restaurant and food wervice operators

Thu 30th Aug 2018 - Propel Thursday News Briefing

Story of the Day:

Australian virtual reality gaming centre to open debut UK site: Australian free-roam virtual reality gaming centre Zero Latency is bringing its experience to the UK. The company has agreed a deal to open MeetspaceVR at the Intu Victoria shopping centre in Nottingham in October. Zero Latency has signed a six-year lease to occupy a 6,000 square foot unit in the upper mall. Founded in 2014 in Australia, Zero Latency operates from 19 venues in ten countries across four continents, with more than 500,000 games played to date. Free-roam virtual reality represents the next level in social entertainment, allowing players to explore virtual worlds, as they would do in real life. The immersive gaming sees customers use their bodies as the controller via wearable technology. Up to eight players at a time can take on a variety of virtual challenges, including battling armies of zombies and droids and drones. Intu development director Martin Breeden told The Business Desk: “MeetspaceVR is an exciting new brand that brings the global phenomenon of free-roam virtual reality gaming to the heart of Nottingham. We piloted a virtual reality winter wonderland experience two years ago, and so we have a great understanding of its impact on dwell time, customer loyalty and the shopping experience." MeetspaceVR chief executive John Lilley added: “We can’t wait to bring this amazing, next generation of social virtual reality technology to the UK. Virtual reality technology and e-sports will evolve quickly and we are committed to bring the best in class experiences together under one roof." 

Industry News:

Propel Multi Club Conference open for bookings, John Upton to present, two free places for operators: The final Propel Multi Club Conference of 2018 is open for bookings. The full-day event takes place on Thursday, 1 November at the Grange Hotel, St Paul's, London. John Upton, former managing director of Leon, member of the McDonald's UK leadership team and now board member of Motherclucker and Naked Deli, will offer his key insights on scale planning, operational teams, improving sales growth and cost efficiency as well as change management in growth companies. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

Deadline extended for operators to take part in sector's biggest benchmarking survey: The deadline has been extended for operators to complete the fifth annual haysmacintyre UK Hospitality Index. The survey, for multi-site pub, restaurant and foodservice operators held in association with Propel, will now close on Tuesday, 11 September. It is the sector’s biggest benchmarking survey with more than 110 companies taking part last year. Covering trading, staffing, capital and funding, and property, the index will deliver quality financial data and benchmarking intelligence to help hospitality businesses understand their sector’s key metrics and how they compare and can improve operations. To complete the survey and receive the final report click here. Information provided will be reproduced anonymously in this year’s index, which will be launched at the Propel Multi Club Conference on Thursday, 1 November. Data and comments will not be attributed to respondents unless permitted.

Cask Marque to reveal survey findings at seminar next month: Cask Marque, the industry watchdog for quality beer, will unveil the findings of this year’s Cask Report at a seminar on Thursday, 27 September at the Lyric Theatre, in Hammersmith, west London. As cask beer faces challenging times, the event will also include a debate about whether it is time for radical reconsideration for the category. Over the past 18 months the decline of cask has been twice that of beer in the on-trade. Cask marque director Paul Nunny said: "For this year’s Cask Report we have carried out extensive research to identify drinking trends on all beers and have hosted consumer focus groups in London, Manchester, Birmingham and Edinburgh. A wide range of searching questions was asked and the results provide an important guide to the future marketing and sales of cask. They are highly relevant to both pubcos and brewers." Kris Gumbrell, co-founder of brewpub business Brewhouse & Kitchen, and Andy Wingate, Heineken senior category manager – on-trade, will be among the speakers. The event starts at 10.30am with coffee from 10am and will finish at 1pm with a networking lunch. To attend, email

MCA publisher William Reed reports underlying turnover up 15% to £37.9m, Ebitda down 32%: William Reed, publisher of MCA, Restaurant Magazine and the Morning Advertiser, has reported underlying turnover grew 15% to £37.9m in the year to 31 March 2018. It reported growth in digital and face-to-face revenue offset by a modest decline in magazine revenue. Digital income increased to £12,428,000 (2017: £6,524,000), flattered by the transfer of the Global Brands digital business. Face-to-face income was £12,789,000 (2017: £16,107,000). Insight income was £1,596,000 (2017: £1,576,000) and magazine income was £8,894,000 (2017: £9,650,000). The company stated: "Despite the increase in underlying revenue, the underlying Ebitda of £3.7m (2017: £5.4m) declined by 32% and Ebitda margin fell by seven percentage points to 10%. The decline in underlying Ebitda was explained by an increase in costs paid to other group companies related to the Global Brands business, and an increase in IT and other staff costs related to new initiatives and further investment in central functions." No dividend was paid, compared with a dividend of £12m the year before. Net cash declined by £4.7m to £5m due to cash paid to the William Reed Group.

UKHospitality condemns introduction of personal licence renewal fees in Scotland: UKHospitality has condemned the Scottish government’s decision to introduce personal licence renewal fees. The trade association had previously called for renewals to be scrapped, in line with legislation in England and Wales. Executive director in Scotland Willie Macleod said: “We responded to the consultation and highlighted the successful elimination of the renewal process in England and Wales. Removing the requirement to renew has reduced administrative burdens for both businesses and local authorities without any consequences. The Scottish government’s decision to introduce fees for renewal will mean an additional headache for councils and an extra financial burden that employers in Scotland could do without. This sort of approach to business, treating them as cash-cows or burdens to be managed, rather than assets to be supported and encouraged, does little to boost vital businesses.”

Company News:

Spanish based hospitality company backed by famous names to open debut UK site: Spanish-based Mabel Hospitality, which is backed by a host of famous stars, is to open its debut UK site. The company is launching Zela at the ME London hotel in The Strand. Mabel Hospitality was founded by Spanish entrepreneurs Manuel Campos Guallar and Abel Matutes. They opened Zela Ibiza last year and they also own the Spanish restaurant Tatel, which has sites in Madrid, Ibiza, and Miami and is just getting ready to open in Beverly Hills. The company's backers include footballer Cristiano Ronaldo, singer Enrique Iglesias and tennis player Rafael Nadal. Zela London is opening next month in the space previously occupied by Cucina Asselina. The restaurant will serve "meppon" cuisine – Japanese techniques and flavours applied to Mediterranean products and traditions, reports Hot Dinners. Fish will be sourced from the Mediterranean and served in tatakis, tartars, sashimi, sushi, gyozas and tiraditos. Dishes will include tiradito of scallops with Ibizan sobrasada and butterfish nigiri with white truffle. The drinks list will have a similar direction, pairing Asian and Mediterranean flavours, such as Santa Maria (sherry wine, homemade spice mix, tomato, basil) and Harakiri (sake, lime, egg white, shiso syrup).

Richoux Group raises £1.09m through share subscription: Richoux Group, the owner and operator of 18 restaurants under the Richoux, Villagio, Friendly Phil’s, Zintino and The Broadwick brands, has raised about £1.09m through a share subscription. The funds were raised by way of a subscription of 18,168,335 new ordinary shares of four pence each at a price of six pence per ordinary share. Richoux Group had announced plans for the share subscription in a trading update on Wednesday (29 August). The company said the funds would be used for "general working capital purposes".

BrewDog updates on bars pipeline: Scottish brewer and retailer BrewDog has updated on its site pipeline in the UK and overseas. The company is opening the following UK sites – Canary Wharf in October; George Street, Perth, in October; Coldharbour Lane, Brixton, in November; Botchergate, Carlisle, late 2018; Market Place, Inverurie, late 2018; Marischal Street, Peterhead, late 2018; its second brewpub, at the University Green development in Manchester, in December; Edinburgh Airport – its first airport location; and Hull in 2019. It also has an "iron in the fire" in Dalston. Meanwhile, it has also updated on its international pipeline. Its next US opening in Cincinnati will be "very soon" while it is in the final stages of negotiation for a site in Indiana. In Europe, the company said it was "close" on two sites in Paris and Berlin. Elsewhere in Germany, it is also set to open in Hamburg. Openings are also planned in Iceland – in Reykjavik and Tampere – along with Budapest in Hungary. Meanwhile, its first Canadian site is set to open in Toronto. BrewDog is also refurbishing sites with revamps completed at Cardiff, Camden and Clapham Junction while work is planned at Bristol and Dundee. In October, it will close its brewery taproom DogTap for a full makeover. The company is also rolling out more direct-draw dispense systems for its keg beer and said it now has a record 59 certified cicerones, with a first-time pass rate more than double the cicerone average. The company added: "There is more to come in addition to all of this of course – our bars team is negotiating on some amazing projects in addition to the above, so stand by for a few surprises before the year is out! With our bar sales forecast to end 2018 at more than 100% growth on last year, we are more committed than ever to drive to get as much awesome craft beer into the hands of the people as possible."

Chef behind The Palomar opens restaurant at Coal Drops Yard: Assaf Granit, the chef behind The Palomar, has opened a restaurant in partnership with designer Tom Dixon at the Coal Drops Yard development in King's Cross, central London. The duo have launched The Coal Office in Bagley Walk, which is next to Dixon's new headquarters and is the first venue to open at the scheme. They describe the restaurant as "a place where you can experience fresh, creative food in a variety of beautifully designed and atmospheric spaces, where the provenance is explained, the tableware is available to buy, and the recipes are shared". The menu is split into a variety of snacks, small and larger plates. Small plates include sashimi uri style with kingfish and a ginger vinaigrette while larger dishes feature midnight shawarma with baked bone marrow and freekeh risotto with skordalia cream and black aubergine, reports Hot Dinners. Coal Drops Yard officially opens in October and will home to more than 50 stores, cafes and restaurants including the third site for Hart Brothers' El Pastor and their new-concept wine bar and restaurant The Drop.

Japanese coffee shop Omotesando Koffee heading to UK: Japanese coffee shop Omotesando Koffee is heading to the UK. Eiichi Kunitomo-san launched the concept in Tokyo's Omotesando Hills. Now he is bringing Omotesando Koffee to London by opening a site in Rathbone Square in Fitzrovia next month. Its drinks include the iced cappuccino, which is covered with a layer of bubbly milk foam and topped with cocoa powder, reports Hot Dinners. Kunitomo-san has since closed the original site in Tokyo and opened branches in Singapore, Hong Kong and Bangkok. 

EatsMeatsWest to launch Chinese concept: Independent Manchester operator EatsMeatsWest will be launching a new casual dining Chinese concept, in Altrincham. Opening this autumn, WowYauChow will offer a diverse menu of British Chinese favourites and Chinese street food, combining this with craft beer and cocktails. EatsMeatsWest currently runs two restaurants with its meat-themed MeatShack concept based in Rochdale and Stockport. Founder and managing director Henry Yau has wanted to launch his own take on a Chinese concept. He said: "I was born in Hong Kong, and having been raised in England since I was five, Manchester is where my heart and home is. Altrincham is simply a fantastic suburb of Manchester with a diverse population, enjoying a great range of independent and branded eateries and drinking places, so we thought this would be the perfect place for us to launch our new concept and we can’t wait to be part of the Altrincham community." 

Stonegate launches level four back-of-house training scheme: Stonegate Pub Company has further enhanced its Albert's Theory of Progression training scheme with the addition of a new management training programme for back-of-house staff. The new level four management training programme is the latest addition to "Albert's Evolution" for kitchen teams, launched in November. The bespoke scheme, created by Stonegate's apprenticeship manager Jemelle Bish and back-of-house training manager Rhona Symon, is currently comprised of three levels. It takes budding chefs and kitchen managers from a basic induction course through to level two, covering food operations and processes involved in running a kitchen, which takes six months to complete. They can then progress to level three, run in partnership with Remit Training, which covers areas such as leadership skills, marketing and sales, financial operations, operating procedures and menu design, people management and customer service. The new level four management training programme, which lasts for 18 months, is aimed at experienced chefs and kitchen managers. It was created in partnership with Remit Training to "develop exceptional leaders who are able to inspire their teams to demonstrate and achieve the visions and objectives of the business". Currently there are 107 members of staff on the level two programme, 59 on level three and 38 people who have been assessed and are on the waiting list ready to start level four this month. Bish said: "Turnover among kitchen staff is often fairly high, but we have seen a significant increase in staff retention and engagement since the launch of Albert's Evolution. The addition of level four means we can offer back-of-house staff a full career pathway, which is the equivalent of a vocational degree."

Chipotle offers direct delivery through app: Chipotle is now offering delivery through its own app as part of a strategy to make the brand more accessible to customers. The company has launched delivery, powered by DoorDash, through its own mobile app as well as its website. DoorDash’s services are available in 70 national markets that include 1,800 of Chipotle’s more than 2,400 US restaurants. The move comes after newly appointed chief executive Brian Niccol has made it clear Chipotle needs to become more accessible. Other initiatives include adding pick-up shelves for mobile orders. Curt Garner, chief digital and information, said the company was “proud to be among the first fast-casual chains to offer this delivery service", reports Nation's Restaurant News. In late July, Chipotle said digital sales were improving and now represent 10.3% of total sales. That includes sales from third-party delivery, which during the second quarter was available in 1,700 restaurants. Chipotle said it expects to reach 2,000 restaurants by the end of the year. The company said it has four million active digital users, up 65% from a year ago.

Manchester-based bakery reports turnover and pre-tax profit surge: Manchester-based bakery Carrs Foods International has reported a huge rise in sales and pre-tax profit following a year of record growth. The company can trace its roots to 1986 when it was established as part of a larger group. Having undergone a management buyout in 2004, it now operates the St Pierre, Baker Street, Dan Cake and Paul Hollywood ready to bake brands. Turnover rose to £49,429,678 for the year to 31 December 2017, compared with £38,002,072 the previous year. UK sales were up to £30,438,217, compared with £27,238,137 the year before. European income increased to £1,450,027, compared with £1,178,662 the previous year while rest of the world sales surged to £17,541,434, compared with £9,585,273 the year before. Pre-tax profit more than doubled to £5,191,413, compared with £2,081,383 the previous year, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: "The company has enjoyed another year of record growth, both at home and in overseas markets. This continued growth comes as the business faces seismic changes within the UK retail market and a challenging currency market following on from the Brexit vote. In the year ahead, the company is looking to achieve a step change in the business with a renewed focus on the UK market, expanding its distribution and customer base within the convenience, wholesale and multiple sectors, while extending into new channels such as food to go."

Yorkshire-based craft brew company launches £140,000 crowdfunding campaign to build brewery and taproom: Yorkshire-based craft brew company Play Brew has launched a £140,000 fund-raise on crowdfunding platform Crowdcube to build a brewery and taproom. The company, founded by Phil Layton, is offering 12% equity in return for the investment. Founded last year with four core beers, Play Brew has been using contract brewing until now to "help it gain traction". The pitch states: "To date, we have produced about 5,500 cans and our beers have been sold in 33 outlets. We want to be the first to open a brewery and taproom in our local area, providing our community with a place to drink and socialise while also providing outlets in the vicinity with fresh local craft beers for retail. Play Brew recognises securing the right location is the key to success. Being the only brewery within a 19.5 miles radius, connecting and engaging the local community through a taproom will be instrumental to the business growth and profit. On the back of our soft launch, we have a number of outlets that are keen to become full-time stockists. Having our own brewery and taproom will not only allow us to grow our sales, it will also give us the opportunity to create new flavours to add to our range."

Thai Leisure Group closes Thaikhun site in Nottingham: Thai Leisure Group has closed its Thaikhun site in Nottingham. The restaurant, which opened at the end of 2015, is the fifth venue to shut in the Clocktower dining area of the Intu Victoria shopping centre. It follows the closure of The Restaurant Group brands Joe’s Kitchen and Coast to Coast along with Handmade Burger Co and Stonebaked Pizza Company, reports the Nottingham Post. A message on the door signed by Thai Leisure Group managing director Ian Leigh said: "We are sorry to say we have decided to close our restaurant after more than two happy years here in Nottingham. This location didn't quite work out for us unfortunately. We would like to thank every person who visited our restaurant and we are sorry if you have made a journey to us today only to find we have now gone." Earlier this week, Thai Leisure Group revealed it would launch new concept Thaikhun Street Bar, at Liverpool ONE in October.

Papa John's founder launches fresh attack on company's leadership in franchisee letter: Papa John's founder John Schnatter has launched a fresh attack on the company's leadership in a letter to franchisees. In the letter posted on Schnatter’s own website,, he said: “The source of the company’s poor performance is rot at the top.” He said chief executive Steve Ritchie was “out of his depth” and was blaming Schnatter for the company’s failings. He added he recommended Ritchie be removed as chief executive in June. Schnatter told franchisees: “Right now, he’s blaming me. Tomorrow, it might be you. It will never, however, be Steve’s responsibility.” In the letter, Schnatter, who resigned as chairman in July and later claimed it was a "mistake", said he told the board in June: “Steve needed to go. At the time, the board agreed – and asked me to become executive chairman.” Papa John’s denied the claim. It added: “We have taken important steps to move the company forward and create a better future. The special committee, franchisees, employees, and shareholders are supportive of these steps and the new business priorities being executed by the leadership team, led by chief executive Steve Ritchie. We are confident in the company and the new direction we are headed.” Papa John’s domestic like-for-like sales fell 6.1% for the quarter ended 30 June. They fell further in July amid Schnatter’s resignation. For the period of 2 July to 29 July, like-for-like sales were down 10.5%. Papa John’s responded by offering financial assistance to franchisees in the form of reduced royalties, food pricing and online fees. It also has undergone a public-relations campaign distancing itself from Schnatter, apologising for its insensitivity and spearheading new diversity initiatives. Schnatter’s series of conflicts with the company he founded started in November, when as chief executive at the time, blamed flagging sales in part on the National Football League’s failure to quell the silent protests of some of its players during the playing of the national anthem before games.
Lincoln & York 'maintaining progress' in current financial year as it reports turnover and pre-tax profit boost: Coffee sourcing, roasting and packaging specialist Lincoln & York has maintained progress in the first half of its current financial year as it reported an increase in sales and profit before tax along with its parent company. Turnover at Lincoln & York rose to £34,552,864 for the year ending 31 January 2018, compared with £28,082,550 the year before. Pre-tax profit was up to £4,473,094, compared with £2,798,396 the previous year, according to accounts filed at Companies House. Accounts for its parent company Elsham Wold Estates revealed turnover rose to £39,943,739, compared with £32,243,220 the year before. Pre-tax profit was up to £4,603,063, compared with £2,121,636 the previous year. Lincoln & York supplies the out of home, foodservice, specialist retail, contingency, wholesale, vending and export markets. In their report accompanying the accounts, the directors stated: "We have continued our period of sustained growth. This progress has been maintained into the first half of the current financial year. We have continued our attempts to optimise efficiency during the year as a means of improving margins. The level of business and the period-end financial position remain satisfactory for the company and the directors are confident to be able to develop the business further in the future."

Innspired Leisure opens second Olivia's site, in Durham as part of UK roll-out: Innspired Leisure has opened a second site for its cocktail bar concept Olivia’s Group, in Durham. The company has invested £2m in The Butterfly Room, a venue in Durham’s Walkergate Complex that also extends into the former Love Shack nightclub that closed last August. The 2,000 square foot venue has opened under the Olivia’s Group family of leisure venues, following on from the launch of Olivia’s Townhouse in Birmingham. The Butterfly Room mirrors the contemporary decor of the Birmingham venue, with a terrace, pizza oven and VIP tables. There are more than 50 cocktails alongside a gin menu, mixology masterclasses and tastings. Newcastle-based Innspired Leisure was launched five years ago by Gordon and Jonathan Codona and also owns and operates the Players Bar brand. As previously reported, Innspired Leisure is planning to continue rolling out the Olivia's concept and is due to open a site in Sheffield before the end of the year.

Tim Hortons withdraws plans for Nottingham drive-thru: Tim Hortons, the Canadian cafe and bake shop owned by Restaurant Brands, has shelved plans for a drive-thru in Nottingham. SK Group, which is leading the UK roll-out of Tim Hortons, has withdrawn its application to the city council to open the venue on the site of a hand car wash in London Road, reports The Business Desk. Tim Hortons’ debut UK site opened in Argyle Street, Glasgow, in June last year and it has been rapidly expanding in England, Scotland and Wales as it plans up to 100 UK outlets. Tim Hortons was founded in 1964 by its namesake, a professional ice hockey player who wanted to create a space where “everyone would feel at home”.

Goodbody – we expect 'strong' update from Dalata at first half results next week: Goodbody leisure analyst Rachel Fox has said she expects a "strong" update from Irish hotel operator Dalata at its first half results next week. She said: "At a group level we forecast revenue growth of 7% year-on-year to €173m. We forecast Ebitda growth of 12% year-on-year to €50m given a good conversion rate in the first half. However we expect growth should temper somewhat in the second half given pre-opening costs associated with new hotels and increased costs associated with the continued expansion in the UK. We forecast revpar growth of 5% in Dublin and 4% in regional Ireland. Given the strength of both Irish markets in the first half (Dublin revpar +8.9% and Ireland regional +10.6%) we expect the group should have had a strong first half performance and is likely to outperform our revpar assumptions. The overall UK hotel market revpar growth was +1% in the first half (regional UK: +2%; London -1.4%), which we think Dalata should continue to outperform. The key issues we are focused on are the quantum of dividend to be paid in the second half; an update on the Dublin hotel room supply pipeline given Savills has recently revised its FY19 new room supply number down from 2,128 rooms in Dublin to 1,079, which should facilitate continued revpar growth; any colour on the impact of a potential increase in hospitality VAT from 9% to 13.5% given ongoing media speculation ahead of the Irish budget on 9 October; and an update on the UK expansion pipeline. Overall, we expect a strong update next week and the Irish hotel market to remain in good shape across 2018. Given the good update the group had in May and strength of the market in the year to date, we expect management to also guide to a positive outlook for the rest of the year and, as we have said before, the strong first half performance in Dalata’s core markets implies upside to our current forecasts (FY18 Ebitda: €115m)."

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