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Thu 13th Dec 2018 - Propel Thursday News Briefing

Story of the Day:

Costa leads the way as UK sees greatest European coffee shop expansion in 2018, Brexit casts shadow over 2019: Whitbread-owned Costa Coffee helped the UK lead Europe in coffee shop sector growth in 2018 but Brexit is casting a shadow over the next 12 months, according to Project Cafe Europe 2019, Allegra World Coffee Portal’s report on the European market. Costa Coffee is Europe’s largest branded chain, holding 8.7% market share with 2,923 stores across 12 markets, the majority of them in the UK. The second-largest operator, Starbucks, has more than 2,600 stores but operates in twice the number of European countries. McCafé is the third-largest branded coffee chain, with 2,376 outlets across 17 countries, representing 7% market share. Together these chains comprise almost a quarter of the European branded coffee shop market, which totals 33,745 outlets, a 6% rise from 2017. Allegra forecasts the market will reach 42,000 outlets by 2023, displaying five-year growth of 4.8%. The report spans 24 national markets, with 23 of them showing a rise in coffee shops. Romania showed the strongest annual outlet growth rate (25.1%) as eastern European consumers rapidly adopt coffee shop culture. Denmark (14.5%) showed the second-highest growth with Cyprus (11.2%) third. More than half of industry leaders believe like-for-like sales will outstrip GDP in their country during the next 12 months. The UK remains Europe’s most developed coffee shop market, with a burgeoning crop of fifth-wave operators “driving innovation and influence across the continent”. However, Brexit uncertainty continues to hamper planning and investment, with labour shortages, rising costs and diminishing consumer confidence causing serious concern among coffee businesses. The majority of industry leaders surveyed cited good location as having the greatest impact on coffee shop performance, with coffee quality and store atmosphere second and third. More than one-third of industry leaders cited high rent and property costs as their major challenges. Allegra chief executive Jeffrey Young said: “The European coffee shop sector continues to perform well, with healthy growth recorded in a vast majority of national markets and adoption of contemporary cafe culture now widespread. However, the future of the UK coffee shop market, Europe’s most developed, is a key concern as businesses grapple with volatile trading conditions and dampened consumer confidence generated by sustained Brexit uncertainty.”

Industry News:

Propel and UKHospitality launch LA study tour: Propel and UKHospitality are heading to Los Angeles for their next study tour, which has opened for bookings. The visit takes place between Thursday, 16 May and Saturday, 19 May. After successful trips to Chicago, Las Vegas and New York, Propel and UKHospitality have decided to check out LA. The trip features a jam-packed itinerary, including a variety of restaurant and bar tours, where delegates can explore and learn about the hottest concepts in the city. These include visits to the new h Club Los Angeles, McDonald’s original restaurant and museum, and Corporation Food Hall. As well as two bar tours led by James Hacon and Mystery chief executive Dan Einzig, who is based in LA, the trip includes three nights’ stay at the five-star Kimpton La Peer Hotel and three hosted dinners. Propel managing director Paul Charity said: “This is a fantastic opportunity to gain valuable insight into the trends and concepts that are shaping LA and leading the way in the US market, which will no doubt provide fresh ideas and inspiration for delegates.” The cost is £2,895 for operators and £3,795 for suppliers. For more information or to book, email Jo Charity at or call 07780 826228.

Feed It Back, Wireless Social and Zonal join forces to bring automated feedback to customers: Guest feedback service Feed It Back has partnered with Wi-Fi solutions provider Wireless Social and extended its relationship with hospitality management solutions company Zonal to integrate their software capabilities, drive deeper insights and bring automated feedback to operators. The agreement means Wireless Social customers can gain instant access to customer feedback through their existing digital infrastructure by signing up to Feed It Back, and a benefit which is now available to customers of Zonal’s online booking and table management product liveRES. Building on the relationship with Zonal, which gives access to basket data that allows operators to personalise feedback questions based on what customers ordered, the new integration with liveRES offers further automated functionality using data captured at the time of booking. Under the new partnership with Wireless Social, operators can see exactly who visited their venue and how long they stayed. The integrated technology also allows operators to overlay customer feedback with how busy specific sites were during service, giving an additional layer of context. Feed It Back chief executive Carlo Platia said: “By collaborating with like-minded companies such as Wireless Social and Zonal, we can combine our technological capabilities for the greater good of the industry and provide vital tools that are fast becoming imperative to remaining competitive in a challenging market.” Wireless Social chief executive Julian Ross added: “We are in the midst of a very exciting time for our business and unlocking new partnerships such as this one will allow operators to realise the true potential of our systems.” David Charlton, commercial director of Zonal Marketing Technologies, said: “By building on our existing partnership with Feed It Back and working with other technology providers such as Wireless Social, we can truly automate the feedback process for our customers and work collaboratively to help operators navigate the challenging market conditions of the hospitality industry.”

Company News:

Burning Night Group creditors face estimated total deficiency of £11.2m: Creditors of bar company Burning Night Group, which went into administration in September, are facing an estimated total deficiency of £11.2m, a new report has revealed. A statement of proposal by administrators Andrew Mackenzie and Julian Pitts, of Begbies Traynor, showed creditors were owed almost £10.7m. Secured creditor Crowdstacker was owed £7,536,230 together with interest of £894,021. Based on realisations to date and estimated future realisations, the administrators said there would be insufficient funds available to enable Crowdstacker to be paid in full. Unsecured creditor claims are estimated to total £2,259,439 and the administrators said there would be insufficient funds to enable a dividend to be paid. Unsecured creditors include Molson Coors, which is owed £670,000, and Matthew Clark Bibendum, which is owed £690,000. There are no known preferential creditors. The estimated total deficiency is £11,214,154. The report also revealed further details on circumstances that led Burning Night Group to enter administration. The group’s consolidated accounts for the year ended 31 July 2017 showed a loss of £1.5m. Despite this loss, the directors were confident the company could return to profitability and continue to manage creditors successfully in the long term. The company closed its Bierkeller in Cardiff in August, with the impact of a regeneration scheme in the city centre cited as a major factor in the decision to cease trading. The other five sites – in Leeds, Liverpool, Manchester, Birmingham and Nottingham – remain open. Despite the directors' confidence, a creditor issued a winding-up petition, which was due to be heard on 1 October. While the petition was not advertised and was anticipated to be dismissed or adjourned, another creditor subsequently supported it and the petition was due to be heard on 26 November. To protect its position, Crowdstacker decided to appoint administrators.

Fever Bars reports profit boost as turnover passes £25m, plans to open four further sites by March: Fever Bars, led by Mark Shorting and Nigel Blair, has reported turnover increased 41.4% to £25,931,029 for the year ending 31 March 2018, compared with £18,328,879 the year before. Pre-tax profit rose to £2,792,789 compared with £1,898,236 the previous year, according to accounts filed at Companies House. At the end of the period, the company operated 31 sites under the Fever, Bierkeller, Boutique, Kukui, Zinc and MooMoo Club brands. It expects to open four more sites before March. Since the year-end, the group has reopened its Bierkeller venues in Taunton and Cheltenham and opened a multi-room venue in Southend at the end of October. The venues in Gillingham and Northampton were sold in the summer and the lease of the venue in Burton has been handed back to the landlord. In their report accompanying the accounts, the directors stated: “The business is focused on weekend trade, with 55% of total sales on Saturday nights. The size and flexibility of our venues allows us to generate a disproportionately high share of the available market on a Friday (and midnight weeks where applicable) by opening fewer rooms and creating a better atmosphere. The pre-book booth culture has become an important part of our business model and led to the rise of the employment of sales mangers in many sites.” During the period, the company opened sites in Cannock, Exeter, the Isle of Wight, Plymouth, Oxford and Weston-super-Mare, while £553,139 was spent on refurbishments in Banbury, Barnstaple, Exmouth, Fleet, Gloucester, Rugby and Shrewsbury. Blair told Propel: “It has been another exciting year for the business. We continue to invest in developing our people and they are at the forefront of our sales, customer care and entertainment-driven culture within Fever Bars.”

Health and fitness delivery brand Gym Food to launch £350,000 crowdfunding campaign to open three sites: London-based health and fitness delivery brand Gym Food is to launch a £350,000 fund-raise on crowdfunding platform Crowdcube to open three dark kitchens in the capital. Gym Food, founded by managing director George L Streatfield, operates a dark kitchen in Bethnal Green achieving average sales of £23,000 a week from November 2017 to November 2018. During the same period the company saw 278% organic growth, from £238,000 to £663,000, and has been rated 94% on Deliveroo and 4.4 out of 5 on UberEats. Streatfield told Propel: “We are seeking £350,000 to open three additional sites across London – Battersea, Vauxhall and King’s Cross. In a typical restaurant model, this level of capital would barely be sufficient to open one store. I want Gym Food to be the first dark kitchen brand to rapidly scale using this model. I believe the industry will see a massive change in the next 20 to 30 years and dark kitchens will become the norm. I only adopted this model because I couldn’t find the capital to open a fully fledged restaurant, but what started as a way to save money has become a core part of the business.” Streatfield is offering 16.67% equity in return for investment, giving the company a pre-money valuation of £1.75m. The pitch states: “Gym Food is a genuinely healthy takeaway that delivers high-protein, fitness-focused, calorie-counted meals. From its humble beginnings as a two-man operation in a part-time rented commercial kitchen in east London, Gym Food has grown to become a staple in homes and offices across the city, disrupting London’s rapidly growing £1.4bn food delivery market. With sales of more than £90,000 a month in October and November 2018 (January to September 2018 £490,000, Ebitda minus £53,000), Gym Food is looking to execute a low cap ex expansion model. We have no storefronts, shop fits or premiums – we trade purely via delivery. With this investment we plan to open three additional sites – Battersea, Vauxhall and King’s Cross – high-volume food delivery locations that also aim to grow our corporate audience. This investment will support Gym Food’s aim to become the dominant premium health and fitness food delivery brand in London. We’ve proven there is demand for calorie-counted, high-protein, freshly cooked food and seek to prove the scalability of our model.”

McDonald’s to cut antibiotics in beef chain: McDonald’s has said it plans to cut the use of antibiotics across 85% of its beef supply chain to curb the rise of drug-resistant bacteria. The company will analyse current antibiotics usage and set reduction targets by 2020. It will begin reporting its progress by 2022. The company has addressed antibiotic usage in its menu items before. In 2016 it removed antibiotics important for human medicine in chicken products in the US and later launched stricter guidelines for its global suppliers. The World Health Organization has made antibiotic resistance a high-priority public health issue. As McDonald’s operates more than 37,000 restaurants worldwide, food policy changes could have a significant impact. McDonald’s global vice-president of sustainability Keith Kenny told Nation’s Restaurant News: “Antibiotics resistance is a critical public health issue and we take our unique position to use our scale for good to continue to address this challenge seriously.” Other quick-service chains working to address the issue of antibiotics include KFC and Pizza Hut.

Former Dean & DeLuca chief operating officer to launch dining and retail experience in Greenwich, eyes ten stores by 2023: John Barton, former chief operating officer of upscale US grocery brand Dean & DeLuca, is to launch a dining and retail experience in Greenwich, south London. The Market Table will offer a 56-cover restaurant, four prepared food counters and a delicatessen across 11 areas in a 4,000 square foot store next to the O2 Arena. The venue is expected to open in the summer with plans for a further ten stores across London by 2023. Barton, who has 30 years of retail and hospitality experience, told BDaily: “Market Table will bring an exciting hospitality and food shopping experience not yet seen in London. We want to create an environment that excites all the senses and, working closely with the English, Welsh, Scottish and Irish food boards, we will champion seasonal produce with a menu that celebrates our food heritage while embracing international cuisine.”

Voodoo Doll reports 45.7% year-on-year growth at Nottingham Mojo: Voodoo Doll, the group behind Mojo bars, has reported its Nottingham site saw 45.7% year-on-year growth between August and October. Mojo Nottingham opened in July 2017 and was the fourth in the group, joining Leeds, Manchester and Liverpool. A fifth bar opened in Harrogate in April this year and is “doing well”. Managing director Martin Greenhow said: “This growth demonstrates a robust first year for one of our newest bars, despite tough trading conditions. That we can report such positive figures is testament to the hard work of the bar team and our commitment to looking after them without losing customer focus. At the end of the day, we’re about delivering a good time. It’s easy to be the new kid on the block but maintaining that week in, week out takes a highly trained, dedicated team and we have that in our bars.” Voodoo Doll launched Mojo in 1996. The concept combines an “American dive bar vibe with great drink, food and rock ‘n’ roll music from the past six decades”.

Tim Hortons opens its first 24-hour drive-thru in Northern Ireland: Canadian cafe and bake shop Tim Hortons has opened its first 24-hour drive-thru in Northern Ireland. The venue has launched at Connswater Shopping Centre And Retail Park in Belfast. Tim Hortons opened its first UK site in Glasgow in June 2017 and there are now 20 restaurants across the region, while a drive-thru will launch soon in Stenhousemuir, Scotland. Kevin Hydes, chief finance and commercial officer of the Tim Hortons franchise in the UK, said: “This is our second restaurant in Belfast. Tim Hortons is in the process of an expansion strategy that will see us identify a number of sites across Northern Ireland in the coming years.” Professional ice hockey player Tim Horton founded the brand in 1964 to create a space where “everyone feels at home”.

Prison-themed escape room brand to make UK debut in Kent, 25th site in Europe: Prison-themed escape room brand Prison Island is to make its UK debut – in Maidstone, Kent. Brothers Mike and Chris Knell will reopen former High Street nightclub Zee Bar as Prison Island. The Swedish franchise has 24 locations across Scandinavia, Belgium, The Netherlands and Spain. The new venture will comprise 25 cells, each containing a puzzle or physical challenge for teams of up to four people. Inspired by game shows such as The Crystal Maze and Fort Boyard, escape rooms have exploded in popularity since the first opened in Japan little more than a decade ago. There are now more than 400 venues in the UK, a 42% rise in the past year. Maidstone hosts two other escape room businesses but Mike Knell believes Prison Island will stand out when it opens in January. He told Kent Live: “This is a bit different because it’s replayable – teams get scores instead of just a pass or fail.”

Oakman Inns opens fifth Beech House, in Hampton Hill: Oakman Inns and Restaurants has opened its fifth Beech House site, in Hampton Hill, south west London. The company has launched the pub in High Street, adding to its venues in Amersham, Beaconsfield, St Albans and Solihull. Chief executive and founder Peter Borg-Neal said: “Our launch evening was a splendid start to our relationship with everyone in Hampton Hill and people have been very kind in their expressions of delight at our opening. We are in talks with Teddington RFC about sponsoring their mini and junior rugby side, the 15th local team to be supported by Oakman Inns.” Oakman Inns operates 25 sites, with further venues in the pipeline for 2019.

Vittoria Group opens £3m fish and chip restaurant in Edinburgh: Edinburgh-based Vittoria Group has opened a £3m restaurant in the city specialising in fish and chips. The 300-cover, 11,000 square foot Bertie’s Restaurant & Bar has launched in Victoria Street featuring coastal-inspired decor such as rope, anchors and oars. The new venture for the company, which is led by Tony Crolla, adds to a portfolio that includes Vittoria On The Walk, Vittoria On The Bridge, Taste Of Italy, La Favorita and fine-dining restaurant Divino Enoteca. Crolla told Scottish Field: “We are excited to bring an authentic restaurant experience inspired by ‘proper fish and chips’ to Edinburgh. Bertie’s doesn’t compromise on quality – everything we buy and serve is of the highest quality. Bertie’s is a proud addition to our growing business in Scotland’s capital.” 

South west-based smokehouse Bare Grills takes over former Grillstock in Bristol for third site: South west-based smokehouse Bare Grills has opened its third site, in Bristol. The company has opened the outlet at a former Grillstock site on the Clifton Triangle. Bare Grills’ menu includes the Filthy Pig burger, which consists of two beef patties topped with melted cheese and bacon, and the smoked brisket, which is slow-cooked for 16 hours. The company was borne out of an appreciation for “fine burgers and quality smoked meat”, according to its website. Bare Grills’ other sites are in Taunton and Weston-super-Mare, reports the Bristol Post.

Former Artesian head bartender to launch first solo venture, in Old Street: Alex Kratena, former head bartender at Artesian, which was voted best bar in the world four years running, is to launch his debut solo project, in Old Street, east London. Tayer + Elementary will open in early spring as a joint venture with fellow mixologist Monica Berg, who has worked with Jason Atherton. The food offering will be operated by Portuguese-Chinese fusion concept TA TA Eatery. The venue will consist of two spaces. All-day cafe Elementary will offer light lunches and bottomless coffee, with cocktails and larger dishes in the evening. Tayer, which derives from the Spanish word for “workshop”, will be a bar featuring a regularly changing food and drink menu. Kratena told Hot Dinners: “We want to achieve beauty by restraint so there’s a mix of Scandi functionality, Japanese minimalism and a bit of punk.” TA TA Eatery is run by Zijun Meng and Ana Gonçalves and used to operate a restaurant in Haggerston as well as a number of pop-ups. Meng said: “Diners have great trust in our food and we’re looking to carry on that style in our new home.” Kratena and Berg are also co-founders of industry think-tank P(our).

Bakery brand Love Brownies opens third site, in West Kirby: Bakery brand Love Brownies has opened a third site, in West Kirby, Merseyside. Piers Henderson, 19, has launched the franchise in Banks Road. He told the Wirral Globe: “We have been working really hard to transform the place and it looks fantastic. We think Love Brownies will be a great addition to Banks Road. Love Brownies has such a high reputation, not only in terms of the quality of the food and drink, which people can take away, but also in the cafe experience itself. We want people to come in to a warm welcome and really enjoy the indulgence.” The other Love Brownies sites are in Angel, London, and Ilkley, Yorkshire, with two others “coming soon”. All brownies are hand-baked in small batches.

Aktar Islam opens Italian restaurant for second Birmingham city centre site: Aktar Islam, former chef director of Birmingham-based Lasan, has opened an Italian restaurant for his second site in the city centre. Legna has launched in Summer Row next door to Islam’s debut restaurant, Indian eatery Opheem. Islam said: “Italian food is the ultimate marriage of quality, simplicity and emotion. Over the course of my career I’ve had the privilege of not only travelling through Italy but also studying with some great Italian cooks. This is homage to them. With Legna, I hope to raise a glass to the land that gave us rolling hills, hot summers, wonderful people and stunning food.” The site was formerly occupied by steak restaurant FSK, which was operated by Islam as Mi Amore while the long-term plan for Legna was developed. Islam stepped down from his role as chef director of Lasan in September 2017 to “pursue other opportunities in the industry”.

West Country-based bar operator returns to Bristol for second site: West Country-based bar operator Louis Lewis-Smith has returned to Bristol to open his second site. Lewis-Smith, who owns The Dark Horse in Bath, has launched Crying Wolf in Cotham Hill. The 75-seat bar is set over two storeys and offers seasonal drinks using hand-made syrup and cordials, while the bar menu includes pork pie with red ale chutney. Lewis-Smith, who began his hospitality career in Bristol more than 20 years ago, said: “Everything is handcrafted and bespoke. The upstairs bar features a supporting bar station that allows us to run an apprenticeship scheme.” Lewis-Smith has established a parent company for his sites – Wild West Group – with plans to launch further food and drink ventures in the region.

Company behind Sheffield-based bar restaurant Cluck goes into administration: The company behind Sheffield-based bar restaurant Cluck has ceased trading and appointed administrators. Simon Gwinnutt, of Cirrus Professional Services, has been appointed administrator of Cluck Operations UK, trading as Cluck Restaurants UK and Cluck Sheffield Parkway. Shortly before administrators were appointed, the company ceased trading with eight staff made redundant. Cluck offered “home-cooked, honestly priced food” from a service station off Sheffield Parkway, a dual carriageway that runs between the city and Junction 33 of the M1. The company’s directors cited the adverse effects of the hot summer and 2018 World Cup on trade as the reason for the failure. The administrator is currently seeking a buyer for the assets of the business, with interested parties advised to contact agent John Pye & Sons of Nottingham, Insider Media reports.

Manchester-based Korean restaurant Ban di Bul opens second site, in Liverpool: Manchester-based Korean restaurant Ban di Bul has opened its second site, in Liverpool. The company has opened the venue in Bold Street. Alongside an authentic Korean menu, Ban di Bul allows customers to create their own barbecue and hot pot. Diners can order raw meat, fish and vegetables and cook the ingredients on built-in stoves at the table or add ingredients into a broth, reports the Liverpool Echo. Ban di Bul opened its debut site, in Princess Street, Manchester, in 2011.

Esquires Coffee eyes East Midlands move with Leicester site: Esquires Coffee is eyeing its first site in the East Midlands. The company looks set to move into new retail units on the ground floor of New Walk Place in Leicester. The coffee shop would be located in Mattioli Woods’ new £15m office development, reports The Business Desk. Doug Williamson and Gary Buckland founded Esquires Coffee in Vancouver in 1993, expanding to the UK in 2000. The company operates 39 franchised and non-franchised UK stores.

Round Corner Brewing launches £1m brewery at Melton Mowbray livestock market: Leicestershire-based Round Corner Brewing has launched its £1m brewery at Melton Mowbray’s livestock market. The brewery and taproom is a major feature of the second phase of redevelopment at the market following the £5.5m investment in a new livestock building. Round Corner Brewing was founded by brewer Colin Paige and City-based director Combie Cryan, who told the Melton Times: “We are looking to produce a couple of hundred thousand litres in year one but we have the capacity to scale that up to about 1.7million litres. The intent is to develop an iconic brand and whatever happens our home will always be in Melton Mowbray. We see the market as an incubator of small businesses but when you also have a brewery on-site that tends to result in other small businesses mushrooming around it. That is what I think will happen here.” Council chief executive Edd de Coverly added: “Having the brewery at the market is great for the town because it complements the food narrative we have in the borough. The second phase of development at the market will be a food and drink hub and the brewery is hopefully the start of that.”

Southampton-based brasserie owner launches Caribbean restaurant and bar for second site: Hubert Hars, who co-owns Oxford Brasserie in Southampton, has launched a Caribbean restaurant and bar in the city centre for his second site. Hars has launched Indies at a former NatWest bank branch in London Road offering Caribbean street food and “fusion cuisine”. The menu features jerk and seafood dishes such as crayfish-tail mac ‘n’ cheese, alongside curries and a range of buns and wraps with spicy fillings. The dessert menu focuses on gelato and sorbet, while the drinks list features craft beer and spirits, the Daily Echo reports.

Dublin-based The Key Collections reports turnover and profit boost: Dublin-based operator The Key Collections has reported revenue grew 22% to €22.5m (£20.20m) for the year ending 31 December 2017, with profits up 33% to €1.2m. Group marketing manager Christopher Kenny attributed the results to “favourable conditions in the Dublin hotel market that resulted in occupancy rates of more than 98%”. During the year, the company signed a long-term management contract for the 35-bedroom Camden Hotel, formally the Camden Deluxe Hotel, which was “immediately revenue-enhancing”. This year the company has added The Exhibitionist and Gainsborough hotels in South Kensington, London, and The Gate Hotel in Dublin to its estate, bringing its portfolio to seven sites. The Key Collections, which was launched in 2012 by Sabrina Sherlock and Nina Gillett, employees more than 300 staff.

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