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Tue 26th Mar 2019 - Propel Tuesday News Briefing

Story of the Day:

TLC Inns targets up to £3.5m for new experiential leisure brand as it converts three Grand Central sites: TLC Inns, the award-winning pub and restaurant company owned by Jo and Steve Haslam, is to diversify into experiential leisure and is seeking funds of between £2.5m and £3.5m for its new “let’s get social” division. The company has been trialling a concept called Wiff Waff at its former Grand Central site in Ipswich. Wiff Waff offers table tennis, pool, “jamaoke” and a “variety of different types” of entertainment throughout the week. The concept is anchored by five-metre screens showing Sky Sports. Two other Grand Central sites have been lined up for conversion – Chelmsford, which will also offer retro gaming machines and pinball, and Basildon. Steve Haslam told Propel that with the Ipswich site spanning 8,000 square feet and Basildon and Chelmsford 6,000 square feet apiece, they offered the space required to develop the concept. He said: “We are exploring all fund-raising options – venture capital and crowdfunding and also the possibility of a sale and leaseback of our Ipswich site where the freehold is owned by TLC Inns. All opportunities are being considered as we look to raise between £2.5m and £3.5m. Having trialled Wiff Waff in Ipswich over the past eight weeks we are seeing a great uptick in trading – up 29% in February and 70% so far in March on a like-for-like basis. Our new standalone company will focus on the whole ‘let’s get social’ experience. London is seeing more and more of these venues open so we thought, given the well-versed headwinds in casual dining, we would trial a switch. On the back of trialling Wiff Waff we are now converting our Chelmsford store to incorporate table tennis, pool and darts with our menu that focuses on sharing, grazing and building your own. We have earmarked one further Grand Central site to flip before looking at further opportunities. Switching has seen wet sales lead on a 70/30 split and wages drop as we exit full service. We have watched with interest how this sector has grown and are fortunate to have three great sites ripe for conversion. We believe it’s a great move for the business and could, with controlled growth, lead to us being a strong regional player in this segment of the market. The roll-out will depend on funding options or a partnership but it’s a great buzz for us to enter a fresh exciting challenge.”

Industry News:

Propel Premium subscribers to receive updated multi-site companies list and Duncan Garrood video: Subscribers to Propel Premium will receive an updated version of the database of multi-site companies on Wednesday, 3 April. Another 100 businesses have been added to the list, taking the total to 1,400. Meanwhile, subscribers will receive a 30-minute video on Friday (29 March) of Ten Entertainment Group chief executive Duncan Garrood giving his views on leadership and the customer experience. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from insights editor Mark Wingett. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Almost three-fifths of UK consumers refer to ratings before making hospitality decision: Almost three-fifths (58%) of UK consumers refer to ratings before deciding where to eat, drink or travel, according to a new study by pricing specialist Simon-Kucher. The report, entitled Trend Radar 2019 – The Rating Economy, revealed a similar number of respondents in the UK and Europe (56%) check hospitality and travel ratings regularly, while more than one-third (36%) regularly rate an experience. One-third recently switched their choice because of consumer ratings, with two-fifths (40%) generally choosing the highest-rated option – a higher figure than any other sector covered by the study. When considering hospitality and travel sector purchases, one-fifth (20%) would pay more for a higher-rated product. “Companies have long been aware of the importance of ratings and rating platforms in travel and hospitality, which have been a driving force behind big disruptors such as Airbnb, TripAdvisor and Opentable, which have been able to dominate the industry by incorporating customer ratings at the heart of their business models,” said Dimitris Hiotis, global head of leisure, travel and transportation at Simon-Kucher. The study asked 6,400 consumers in 23 countries, including 440 from the UK, about their rating behaviour in February.

Quarter of millennials walk out of restaurant or bar if unable to charge their device: One-quarter (25%) of millennials have walked out of a foodservice venue because they were unable to charge their device, according to a new study by wireless-charging technology company Chargifi. Almost half (46%) of respondents said they would stay longer and order more at a hotel, cafe, restaurant or bar if they could charge their device, while almost one-fifth (17%) have spent money at a foodservice site purely so they could power up their phone. The figures increase drastically for millennials, with almost two-thirds more likely to stay longer and order more if they can charge their device compared with less than one-third (30%) of people aged 55 to 64. The study found on a daily basis almost two-thirds of smartphone users run out of battery charge before 5pm. Chargifi chief executive Dan Bladen said: “Easy access to power is no longer a luxury, it is a basic need. Guests will choose venues based on whether they provide convenient access to power and we will start to see the provision of wireless charging having a huge impact on reviews. If you can influence how and when people get access to power, you have a chance to influence the rest of their connected journey and experience.” Chargifi surveyed more than 2,000 hotel, cafe, restaurant and bar visitors.

European craft beer collaboration launches: Citizens of Everywhere, the largest pan-European craft beer collaboration, has been launched. The initiative has seen 12 UK craft brewers pair with 12 breweries, each from a different European country. Each pair has brewed a beer to celebrate European co-operation amid the Brexit debacle. About 700,000 cans and bottles of the new brews will be distributed through online beer subscription service A new batch of launch events will take place in Edinburgh, Hull, Newport, Norwich and Southampton from Friday (29 March). The project has been created by UK brewers Moor Beer and Thirsty Cambridge. Moor Beer owner and head brewer Justin Hawke said: “We love working with brewers, suppliers, customers, employees and friends from all over the EU and the rest of the world.” Sam Owens, of Thirsty Cambridge, added: “It might not make much difference to the political landscape but at least we’re doing our bit.”  

Company News:

Prezzo appoints new people director: Prezzo, the Karen Jones-led group, has appointed Jacqueline Rouse as its new people director, Propel has learned. Rouse joins the business from Hobbs London, where she spent more than five years, the past two as its HR director. Previous to that she had stints at diamond jeweller De Beers, Moet Hennessy and Coca-Cola. Michelle Weeks has been Prezzo’s interim people director since September. Last spring, Prezzo shut 94 of its 300 restaurants across the UK as part of a restructure under a company voluntary arrangement. Last November, Prezzo, which is owned by private equity firm TPG, reported an operating loss of £65m for 2017, restructured its debts and its main backer wrote-off two-thirds of its investment. The company now has 186 rather than 300 restaurants. TPG bought it off the stock market for £304m in 2014. However, a debt-for-equity swap has diluted TPG’s stake and turned five debt providers into shareholders. At the time Jones, the pub entrepreneur brought in as executive chairman after the restaurant closures, said Prezzo was better positioned but market conditions were still tough.

Pret A Manger rolls out free filtered water fountains to 250 UK stores: Pret A Manger, the JAB Holdings-owned group, has further rolled out filtered water fountains to its UK stores in a bid to help customers cut their use of plastic bottles. The move means 250 of Pret’s UK stores now offer free filtered water through the initiative. All the stores are listed on the Refill app and anyone can “fill up for free”, regardless of whether they make a purchase at Pret. There are plans to install 35 more units this year, which would make free filtered water available in more than 95% of Pret stores. In the 90 sites where it wasn’t operationally possible to install fountains, free filtered water is available behind the counter for people to want to refill their water bottles. Laura Gutowski, Pret A Manger director of strategy and sustainability, said: “We have installed filtered water fountains in all our shops with enough space front of house. The fountains are easy to spot and we want everyone – not just Pret customers – to feel able to come in and fill up for free without hesitation. If each of our water stations is used just ten times a day, we could save around a million plastic bottles a year and that, for us, is great motivation to continue rolling them out.”

JW Lees acquires Cheshire village pub from Hydes: North west brewer and retailer JW Lees has acquired The Goshawk in the Cheshire village of Mouldsworth from fellow north west brewer and retailer Hydes. The 19th century pub, which has been incorporated into JW Lees’ inns and hotels division, will reopen on Friday (29 March). The property features a taproom and indoor and outdoor dining areas and has its own bowling green. The pub’s staff have transferred with the business. JW Lees managing director William Lees-Jones said: “When we saw The Goshawk was available we knew it would be a great pub for us, filling a gap between Delamere, Frodsham and Chester. We believe we can add value to the business by welcoming it to our growing inns and hotels division. We’re delighted to have inherited a fantastic team as well as acquiring a landmark pub. We are growing a collection of fine country pubs and they are becoming an increasingly important part of our core business.” JW Lees said it remained keen to acquire more pubs, inns and hotels in the north west.

Bangor-based Wolf Inns buys Belfast bar for eighth site: Bangor-based Wolf Inns has bought the Bellevue Arms in north Belfast for an “undisclosed sum”. The pub, its eighth site, will undergo a £250,000 refurbishment. The pub in Antrim Road employs 48 staff across its restaurant and deli, two bars and beer garden. Wolf Inns managing director Andrew Gedge told Belfast Live: “The Bellevue Arms is one of the best-known pubs in Ulster. We plan to build on the strong foundations already in place. Wolf Inns now employs 172 staff across a strong portfolio of premium bars and restaurants. 2019 will witness further growth for the group as we continue to invest in our team and acquire premises to advance our leasing strategy.”

Liquidators appointed for NY Fold: NY Fold, the company behind US chef Bruno DiFabio’s pizza brand designed for the UK market, has been placed into liquidation. Both of the group’s London sites have closed. Liquidators at BM Advisory have been appointed to oversee the business interests of the company, which operated sites in Charing Cross Road and London Fields. The concept opened its debut UK site in 2015 at the former Gallus Restaurant site in Charing Cross Road. A second site opened in Sidworth Street last year. DiFabio, who is a television star in the US and operates ten restaurants in the States, had previously said he had “exciting plans” to grow the brand and hoped to launch five restaurants in London by the end of 2015. “I’m going to turn the pizza world on its ear in London,” he said at the time.

Big Smoke Brew Co to open fourth pub, in Chichester: Surrey-based brewer and retailer Big Smoke Brew Co is to open its fourth pub, in Chichester, West Sussex. The company will reopen The Hole In The Wall in St Martin’s next month following a refurbishment. The pub will offer a range of Big Smoke Brew Co’s own beer alongside that of other breweries, reports the Chichester Observer. Big Smoke Brew Co has just moved to a new brewery on the outskirts of Esher. Its other pubs are in Kingston, Surbiton and Weybridge.

Brunning & Price acquires Warwickshire village pub: Brunning & Price, The Restaurant Group (TRG)-owned pub business, has acquired The Crabmill in the Warwickshire village of Preston Bagot. The pub, which is a former cider mill with its roots dating to the 17th century, closed at the weekend and will reopen on Saturday, 4 May. The property features leaded windows, a half-timbered exterior, crooked beams and flagstone floors, which are set to remain as the property undergoes a refurbishment. Last week, Propel reported Brunning & Price had secured three sites for its 2019 openings pipeline, including the former Cafe Rouge near Kew Bridge. At its full-year trading update this month, TRG said it expects at least seven openings for Brunning & Price in 2019. Brunning & Price currently operates 71 pub restaurants across the UK having opened its second site with rooms – the Highdown in Goring-by-Sea in West Sussex – earlier this month.

The Cat’s Pyjamas closes Harrogate site: Yorkshire-based restaurant chain The Cat’s Pyjamas, which was rescued from administration in a pre-pack deal last year, has closed its Harrogate site. The town centre venue opened in August at a former Prezzo site in Albert Street. However, the restaurant was evacuated on Christmas Eve as smoke filled the building. Although the venue reopened after Christmas, a typewritten sign has now gone up in the restaurant’s window signed by owner Alison White stating: “Unfortunately we have had to close this site for good. I am scaling back the business a bit to concentrate on spending a little bit more time with my beautiful little baby.” The note ends by stating the other Cat’s Pyjamas restaurants – in York, Headingley and Leeds city centre – would remain open, the Harrogate Advertiser reports. A fifth site, in Sheffield, had already closed due to its “location”. Last month the Indian street food and craft beer brand opened a takeaway-only site in New Briggate, Leeds. The Cat’s Pyjamas was bought out of administration in October by White’s partner, Paul Baron, for £80,000 through a vehicle called Meow Hospitality – the only offer received. The deal enabled the chain to continue trading, with all 100 jobs saved. 

Mayfair Chippy lines up third site, in Clapham: Mayfair Chippy, the fish-led concept, is to continue its roll-out with an opening in Clapham. The concept, which was founded by Jamie Jones and Peter Taylor, has secured a site in Abbeville Road for its next opening. The company is part of Hammer Holdings, the business led by beauty and hospitality entrepreneur George Hammer, founder of the Urban Retreat brand. Hammer, Taylor and Jones launched the first Mayfair Chippy restaurant, in North Audley Street in 2014. It gained an AA Rosette and entry into the Michelin Guide. The company opened a second site in the Minories in the City last year.

Hart Brothers to launch DIY grilling space for fourth site at Coal Drops Yard in May: The Hart Brothers, who already operate three sites at Coal Drops Yard in King’s Cross, will launch outdoor space Parrillan at the London development in May. The Harts operate a third site for Mexican taqueria concept El Pastor at Coal Drops Yard, a fourth for Barrafina restaurant and new-concept wine bar and restaurant The Drop. Parrillan will open on Friday, 10 May as a partly covered outside space where diners can grill their own meat, fish and vegetables on their own “parrilla”, a mini charcoal grill, reports Hot Dinners. Last July, the company raised almost £2.5m on crowdfunding platform Crowdcube to fund the openings at Coal Drops Yard. The campaign was launched with an initial £750,000 target and raised more than £1.6m within the first two hours. The new venues are part of more than 50 stores, cafes and restaurants at the development.

Veeno starts hot food roll-out as focus turns to drinks offer: Italian wine cafe Veeno has started rolling out hot food across the estate – and is now turning attention to its drinks offer. The new offer includes pizza, meat and vegetarian lasagne, parmigiana di melanzane, new salads and bruschetta. Rodrigue Trouillet, who acquired the business out of administration earlier this month having joined as its new partner in November, said: “We have been listening to our customers regarding hot food on the menu and, after testing it in a couple of branches, it’s now being rolled out. Maintaining quality food products to combine with our award-winning wine was a key criteria when putting up this new food menu.” Trouillet said the next step would be to address the drinks menu, with new wine, beer and cocktails added. Veeno aims to make these changes gradually before the summer. Trouillet was overseeing the business’ development strategy and marketing operations before acquiring the business out of administration, a move that resulted in co-founder Nino Caruso stepping back. Veeno currently has ten company-owned and five franchise sites.

Star Pubs & Bars extends food support initiative to leased licensees: Heineken-owned Star Pubs & Bars is making its Just Add Talent (JAT) managed operator food menus available to its leased and tenanted licensees. The move will enable licensees to benefit from negotiated discounts and food insights support aimed at the company’s community pubs, which make up about three-quarters of its estate. Licensees can choose from three menus – one aimed at pubs that haven’t offered food before or have a smaller kitchen footprint, a central core offer, and an enhanced menu that includes sharing boards and charcuterie. Licensees can also offer a children’s menu, a “millennial friendly” wings and burger menu, and packages aimed at events such as Mother’s Day. Star Pubs & Bars head of food Mark Teed said: “At last year’s forums, licensees asked for our help to reduce their food costs. Using the JAT menus enables them to leverage our purchasing power. We have a library of menus to choose from. As our business development managers have detailed knowledge of the pubs in their postcodes, they can ensure there is differentiation between pubs close to one another. We are passing all savings on directly to licensees. The intention is to help our licensees grow their food business, ensuring those businesses are sustainable in the long-term.” 

HSBC reiterates ‘Buy’ rating on JD Wetherspoon shares given earnings momentum: HSBC leisure analyst Joseph Thomas has reiterated its ‘Buy’ rating on JD Wetherspoon shares given the earnings momentum. Thomas said: “Trading remains exceptionally strong. In the most recent six-week period, like-for-like sales were up 9.6%. Much of this appears to be volume driven. Rather modestly, management says this is because of weak comparables (up 3.8% in the same period last year, which was weather affected). But the two-year growth rate, which irons this out, has been very consistent, at about 13%. If this continues, it points to like-for-like sales for the year of circa 8%. That’s well above management’s assumption of 5% to 6%, and implies a slowdown to 4% growth for the remaining 20 weeks of the year. Even if we assume outperformance only dropped through to profit at 20% to 25%, that would still leave a potential upgrade in the region of £10m (circa 10% at earnings per share). We keep our forecasts unchanged because Wetherspoon has a habit of finding ways to spend on cost (eg wages, repairs, price) if it thinks it improves the long-term health of the business. However, the chances of such spending hikes is diminishing. It doesn’t seem to see any need to increase pay rates further in the short term. It says, in any case, that these are already circa 4% to 5% ahead of the living wage and it says it would take two months to implement higher wages even if it decided to so the risks are diminishing ahead of the July year-end. Elsewhere, there doesn’t appear to be pressure on food and drink costs. It says these are running below inflation. Higher repairs charges, which were signalled in January, are the only potential area of concern – but these are small. We leave our valuation unchanged at 1,475p and reiterate our ‘Buy’ rating on the shares, given the earnings momentum. Our target price implies 11% upside. Management’s natural caution means earnings forecasts are being held back for now, but they should increase in time.”

Bite UK Snacks launches range under YO! brand: Bite UK Snacks has launched a range of rice cakes and pop chips under the YO! brand. Pop chips contain 50% less fat than fried potato crisps and are available in barbecue, and salt and vinegar flavours, while the rice cakes come in chocolate and salted caramel, and chocolate and coconut varieties. The range is available in YO! Sushi restaurants across the country and the YO! To Go concessions in Tesco stores. YO! Group marketing director Luisa Fernandez said: “We are delighted to enhance our customers’ eating experience.” Bite UK Snacks founder Jason Bull added: “It is an exciting opportunity to work with a creative mainstream brand such as YO! to develop a unique product that sits perfectly within its portfolio.” Last week YO! Sushi, the Mayfair Equity Partners-backed group, placed six UK sites on the market as it looks to consolidate its restaurant estate and further pivot towards becoming a multi-channel, multi-platform business. Late last year, YO! agreed a deal with Tesco to pilot YO! To Go counters at two UK stores – in Surrey and Bournemouth.

Empty Daventry hotel goes on market for £7m: The Landmark Hotel in Daventry, Northamptonshire, which has been empty since 2008, has been put up for sale with a guide price of £7m. The hotel’s freehold is being marketed by agent Fleurets and comprises 148 bedrooms and extensive banqueting and conference facilities across a 7.44 acre site. The Landmark Hotel was developed by the present owners, Property Investments (Development), in 1976. The original 100-bedroom hotel was extended in 1985 to provide an additional suite of 48 rooms. The hotel was closed in 2008 for refurbishment but did not reopen because of “personal reasons”. Andrew Whelan, of Fleurets, who is overseeing the marketing process, said: “We fully anticipate the property will remain as a hotel after purchase. However, due to its highly visible location we believe there may be further development opportunities to introduce a retail element or food offer.”

Whitbread secures third Premier Inn site in Dublin: Whitbread has secured its third Premier Inn site in Dublin following its largest acquisition in Ireland. The company has agreed a pre-let deal for a 250-bedroom hotel at Castleforbes Business Park. Kevin Murray, head of acquisitions for north and Ireland at Whitbread, said: “Securing a new Premier Inn at Castleforbes builds further momentum to our acquisition drive in Dublin. As the city’s new and expanding tech centre and one of the best hotel trading locations, Castleforbes is an excellent location for our largest Premier Inn to date in Dublin. With significant bedroom requirements in the city we are actively exploring other live freehold and leasehold opportunities as we work to secure up to 2,500 Premier Inn bedrooms in Dublin.” Subject to planning permission, the new Premier Inn will form part of Glenveagh Properties’ mixed-use scheme. The agreement is the third signed by Whitbread in Dublin in the past year. In the autumn, Whitbread secured planning permission for a 97-bedroom leasehold Premier Inn in South Great George’s Street, where work has begun. In January, the company announced its first freehold purchase – a 180-bedroom hotel in Jervis Street. JLL advised Whitbread on the Castleforbes deal, while CBRE Hotels represented Glenveagh Properties.

Dinner Time Stories to launch immersive experience featuring five-course dinner: Dining installation specialist Dinner Time Stories is to launch an immersive experience at Westfield Shepherd’s Bush featuring a two-hour show and five-course dinner. The experience – Banquet of Hoshena – will launch on Friday, 12 April with a story projected on to the table and props including cutlery allowing diners to interact. The story is a journey through a mystical land known as Hoshena and takes place in conjunction with a five-course meal paired with wine and cocktails. The experience will run until Wednesday, 7 August when it will transfer to Shoreditch cocktail bar TT Liquor to run until the end of the year, Hot Dinners reports.

Apex Hotels offers to hold the baby with nanny and dining deal: Edinburgh-based Apex Hotels is to launch a deal for Mother’s Day (Sunday, 31 March) in which a nanny will look after the baby while his or her parents eat a two or three-course meal. The package will be available at all Apex sites, with nannies provided by fully accredited babysitting groups. Apex Hotels chief executive Angela Vickers said: “This is our way of letting mums and dads celebrate a real family occasion with their little ones while not having to worry about their meals getting cold.” Apex Hotels operates ten hotels – in London, Edinburgh, Glasgow, Dundee and Bath.

Norwich-based micro-brewer launches £250,000 crowdfunding campaign to support expansion: Norwich-based micro-brewery Redwell Brewing has launched a £250,000 fund-raise on crowdfunding platform Crowdcube to expand its facilities, range and reach. The company, led by Ben Hopkins, who was responsible for the growth of Naked Wines in its first four years, is offering 7.50% equity in return for the investment, giving a pre-money valuation of £3,085,000. The pitch states: “We are a small-batch, independent brewery with an entirely vegan and gluten-free range. We’re also a well-loved destination, with a thriving taproom and events space. Our planned growth includes expanding our facilities to meet demand and our range into on and off-trade outlets beyond our borders. In a crowded market place, our range is proving an exciting proposition.” In 2017-18, Redwell Brewing had turnover of £629,645 with Ebitda of minus £203,132.

Darwin & Wallace unveils spring menu: Darwin & Wallace, the independent neighbourhood bar group backed by Imbiba, has unveiled its spring menu. The menu uses seasonal ingredients – some of them grown in the company’s own gardens – and continues to champion sustainability. Dishes include roast cauliflower, wonky aubergine and coconut curry with daal, caramelised onion, yogurt and flatbread; and lime and grilled buttermilk chicken skewers with pickled jalapeño, cucumber, mixed leaf and gochujang dressing. New cocktails include The Rhubarb Negroni (Chase rhubarb and bramley apple gin, Campari and Cocchi Americano. The menu is available across Darwin & Wallace’s seven London sites.

CH&Co opens cafe at Greenwich landmark: Independent caterer CH&Co has opened a cafe at the Old Royal Naval College in Greenwich, south east London. The Painted Hall Cafe is part of a two-year conservation project partly funded by the National Lottery Heritage Fund, which has restored the Painted Hall and Undercroft. The new cafe is part of CH&Co’s portfolio of events spaces at the UNESCO World Heritage Site. The restored Undercroft houses the new cafe as well as a retail shop and interpretation gallery. The seasonal menu offers breakfast, lunch, hot and cold drinks, and cakes. CH&Co operations director Andrew Bapniah said: “We are excited to be working with the Old Royal Naval College to launch the Painted Hall Cafe to visitors and the Greenwich community. The Painted Hall Undercroft is a fantastic location for the cafe and as part of the incredible conservation project the space has been restored and designed in way that celebrates its history and will make customers feel they are enjoying a drink and a bite to eat somewhere very special.”

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