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Morning Briefing for pub, restaurant and food wervice operators

Fri 3rd Jan 2020 - Propel Friday News Briefing

Story of the Day:

McVeigh joins chicken sandwich concept Butchies as chairman: London-based chicken sandwich concept Butchies has appointed Draft House founder Charlie McVeigh as its new chairman, Propel has learned. Butchies, which currently has two sites in Shoreditch and Fulham, was founded by Garrett Fitzgerald in 2013. It opened its first bricks and mortar restaurant in 2018 in Rivington Street, Shoreditch. At that time the business attracted initial external investment from Adam Hyman at Code Hospitality and former KFC Global chief marketing officer Jennelle Tilling with the latter also joining the board as non-executive director. In October last year, the business was further strengthened by the recruitment from Nando’s of Ilker Sahinturk as lead general manager. McVeigh said that having proven the operating system, codified the brand and built a solid team, 2020 has become about starting the process of getting Butchies to scale. The company confirmed that it is has two sites in legals which it hopes to develop and open in the first half of 2020. McVeigh, who also recently became chairman of The Breakfast Club, said: “When Adam Hyman first introduced me to the business I was blown away by the chicken sandwich. Six months later I have got to know Garrett well and have been impressed by the commitment to building a systematic and scaleable QSR brand. This is a business with strong roots in streetfood which has adapted well to bricks & mortar. The Butchies management team, led by Garret and Ilker, is characterised by an obsession with quality, consistency and profitability – there are not that many two-site businesses in the market with aggressive growth plans which also post an annual net profit.” Fitzgerald said: “I am delighted to formally have Charlie on board at this crucial stage in our development. His involvement over the last few months has already been transformative. His wide experience and creative enthusiasm are going to be key assets for the business as we look to make Butchies the preeminent Better Fried Chicken brand in the market.” Tilling said: “There’s something really special about taking an authentic street food brand that has been handcrafted by a passionate founder, and bringing it to scale. Garrett has created a truly awesome tasting chicken burger. It deserves to be all over the UK and we are confident that the operational and financial fundamentals are now in place to make it happen.”

Industry News:

Propel and Elliotts launch second Leadership Summit: Propel is launching the second Leadership Summit, which will see a select group of the sector’s most experienced bosses share their expertise on leadership. The full-day event, in partnership with Elliotts, will take place on Wednesday, 12 February at One Moorgate Place and is open for bookings. Ken McMeikan, Moto chief executive, will talk about creating a winning culture and making a difference to society; Alexa Reid, Noble Organisation managing director will set out her approach to empowering individuals to create a cohesive team; Shamil Thakrar, Dishoom co-founder, will present on creating culture at Dishoom; Chris Jowsey, Admiral Taverns chief executive, will set out his thoughts on the importance of being open in a changing world; Emma Woods, Wagamama chief executive, will talk about the role of leadership in innovation; Jonathan Arana Morton, The Breakfast Club co-founder, talks about taking the legwork out of leadership; Jonathan Recanti, Farmer J co-founder, explains the importance of starting with a great idea; Alistair Darby, SA Brain chief executive, will provide leadership lessons from a Playbarn; Penny Manual, Soho Coffee managing director, argues that women make better leaders than men; and Shane Kavanagh, Crussh chief executive, will set out the leadership lessons learnt from extensive change. Propel managing director Paul Charity said: “With the industry facing such challenging times, effective leadership has never been more important. This is an unmissable opportunity to learn from high-profile leaders in our sector.” Prices are £295 plus VAT for Premium members, £345 plus VAT for operators and £445 plus VAT for suppliers. To book, email:

Greggs launches vegan sausage roll: Greggs has launched a meat-free version of its popular steak bake. The new product arrives on Greggs’ shelves at the start of Veganuary. The vegan steak bake has been created to mirror some of the original snack’s features, including 96 thin layers of puff pastry but without the egg glaze. The filling is made with pieces of the fungi-based protein Quorn instead of beef, mixed with diced onions and meat-free gravy. Costing from £1.55, it went on sale in 1,300 shops from yesterday before being rolled out to the remaining 700 outlets on 16 January. Greggs’ chief executive, Roger Whiteside, said: “Our vegan sausage roll launch was a huge success and we’ve been working tirelessly to expand our vegan-friendly offering and provide more delicious savoury food on-the-go options for people looking to reduce their meat intake.” Greggs’ vegan sausage roll – also with a bespoke Quorn filling – launched in January 2019 and has become one of its top ten bestselling products, helping company sales increase by 13.4%. The company says only 14% of the product’s customers are strictly vegan, with two-thirds aiming to reduce their meat intake. Speculation about its successor has been mounting for months but has been rife for the last few days after a sign for a steak bake was spotted in a store and circulated on social media.

Job of the Week: COREcruitment is looking for a commercial director with a specialism in the grocery sector – the position can either be full-time or part-time. The company stated: “We are working with a very successful international food concept who have a loyal following and a great reputation for service and quality. As the next step of their expansion they are looking to develop into grocery / retail – providing a taste of their much-loved food to customers at home or on the move. We are looking for a character who can lead this part of the business. You will take complete accountability for the P&L – from product selection and development through to liaison with key retail contacts and all elements of supply chain and planning. This is a great role for a passionate and driven character who is looking to develop themselves and a business.” Contact for more information

Ready Steady Bake secures debut site: Ready Steady Bake, a competitive socialising concept based on baking, has signed for its debut site at 8 St Paul’s Street in Leeds city centre. Savills advised landlords Schroders on the transaction. Ready Steady Bake has signed a new five-year lease on the 1,987 sq ft unit that will be the first of its kind in Leeds. Appealing to a wide range of consumers from corporate team building groups to birthday parties, groups are assigned their own baking station and compete to create a selection of sweet and savoury baked goods. According to Savills research, there are over 170 competitive socialising operators in the market, with a broad range of concepts. Josh Howe, associate director in the retail team at Savills Leeds, said: “We are delighted to welcome Ready Steady Bake It to 8 St Paul’s Street. Well located near a number of corporate and leisure occupiers, the concept will provide something new and exciting to the line-up of the street.” 

JD Wetherspoon launches annual January drinks sale: JD Wetherspoon has launched its annual January drinks sales across its UK pub estate. Managers at the Wetherspoon pubs are reducing the price of a range of drinks from Thursday 2 January until Thursday 16 January inclusive. The range includes both alcoholic and low and alcohol-free drinks. The drinks featured in the sale include; a real ale (Sharps Doom Bar), a craft beer (Shipyard), one lager (Coors Light), two ciders (Kopparberg Strawberry & Lime and Magners), a selection of wines from Coldwater Creek (pinot grigio, merlot, White Zinfandel Rose), three spirits; Gordon’s gin and Smirnoff vodka (inclusive of a mixer), four soft canned drinks (R White’s raspberry lemonade, Dalston’s Fizzy Rhubarb, Gunna Muscovite Lemonade & Mint and Sanpellegrino), four draught soft drinks, Guinness, Lavazza Iced Cappuccino and Remedy Kombucha. The low and alcohol-free drinks include; Beck’s Blue, Budweiser Prohibition Brew, Heineken 0.0, Brewdog Nanny State and Adnams Ghost Ship. A JD Wetherspoon spokesperson said: “Department stores and shops hold their sales in January, so it is the perfect time to have a sale at the pub too. The range of drinks on sale in the pub is aimed at suiting a wide variety of tastes. This year we have included our biggest selection of low and non-alcoholic drinks. I believe that the January Sale will prove popular with our customers. As always, staff at the pubs will serve customers responsibly.”

BrewDog to open alcohol-free bar: BrewDog is to open its first bar dedicated to alcohol-free drinks. The BrewDog AF Bar will be the world’s first alcohol free beer bar and will offer 15 taps of draft alcohol-free craft beer. The bar will open in central London and will be the first of the company’s global bars to feature a line-up solely devoted to drinks without alcohol. In addition to this, BrewDog will be running ‘Drink All You Can Jan’ across all bars. The initiative offers drinkers unlimited refills of BrewDog alcohol-free beers in all bars for the entire month. The BrewDog AF Bar opens at 12pm on Monday 6th January and is located in the Mews Unit of the Bower Development at 211 Old Street, London. BrewDog is also expanding its core range of alcohol-free beers with two tasty new additions. Wake Up Call, a Coffee Stout and Hazy AF, an alcohol-free take on its existing New England IPA, Hazy Jane join Nanny State and Punk AF. Visitors to the bar will be able to take part in a programme of on-going activities including Hip Hop Karaoke, Dabbers Bingo, Famous First Words and other partners yet to be announced. 

Company News: 

McKie takes chairman role at Megan’s: Rod McKie, the former chief executive of Welcome Break, has joined Megan’s, the south London-based cafe and deli concept owned by Tossed founder Vincent McKevitt, as its new non-executive chairman, Propel understands. McKie is also currently chairman of Tossed and a non-executive director at Sticks ‘n’ Sushi. He stepped down as international chief executive of the Danish restaurant business earlier this year. Megan’s opened its seventh site in Islington Square, its first north London-based café, near the end of last year. Megan’s was founded in 2004 as a daytime cafe in King’s Road and was acquired by McKevitt in 2014. It also has sites in Fulham, Parsons Green, Balham, Battersea, Wimbledon and Clapham. In February 2019, the company appointed Ryan Jacovides, former managing director of Jamie Oliver Restaurant Group and chief operating officer of No 1 Lounges, as managing director. Last October, it appointed Ben Rees, formerly of D&D London and Le Pain Quotidien, as its new finance director. Rees previously spent more than a year as group financial controller at D&D London and prior to that almost seven years at Le Pain, including a final stint as its head of finance.

Upham Group sale and leaseback deal generated net proceeds of £18.7m: Upham Pub Group, the Hampshire-based operator, has reported that the sale and leaseback of 14 sites with CBRE Global Investors last year, generated net proceeds of £18.7m. The 14 sites were leased back on 150-year leases with rent in the first year of £501,000 representing a 2.7% charge on the gross proceeds. The net proceeds were used to repurchase two sites – The Navigator in Swanwick and The Winning Post in Winkfield – which subsequently formed part of the sale and leaseback deal; redeem preference shares, repay a convertible loan note and repay the majority of a primary debt facility with HSBC. This process, along with a restructure of the company’s board and central management team, is expected to reduce annual financing costs by £400,000 and to reduce overhead costs by c£300,000 per annum. The company, which sold its site The Plantation in Canford Cliffs to Young’s at the start of last year for c£2.05m, said that the 15 months to 31 March 2019 had been a challenging period, with the headline performance of the business reduced. On a like-for-like basis, excluding the company’s now closed brewery and The Plantation, sales for the 15-month period stood at £16.3m, down £400,000 than the equivalent prior period. Group Ebitda stood at £600,000 against £1,259,000 in the year ending December 2017. The accounting period also saw £8.4m of fair value write downs and costs relating to the refinancing transaction. The company said: “With the distractions of corporate finance matters resolved, the management team have now been allowed to focus on the detailed management that the operation requires. We have an excellent trading estate and focus will be on improving the customer experience, continuing to seek improvement in margins and further reductions in overheads. These actions will lead to a return to improved Ebitda and therefore increase shareholder value.” Last summer, Chris Phillips stepped down as chief executive of Upham Pub Company. He decided to leave the business to pursue other opportunities. He set up the business in 2012 with David Butcher, who now leads the company with finance director Robb Harris.

Itsu to make France debut through Lagardère Travel Retail partnership: Itsu, the healthy Asian food chain created by Pret A Manger co-founder Julian Metcalfe, is to make its debut in France, with an opening in Paris’ Orly Airport this May. The company, which currently operates 74 sites in England and one in New York, has entered into an agreement with travel concessions operator Lagardère Travel Retail to open a site at the airport. The company plans further opening in the UK and New York this year, with openings in the North, Edinburgh and at the International Quarter London, Stratford, in the pipeline. Speaking to the Mail on Sunday over the festive season, Metcalfe said Itsu would more than double in size over the next five years by opening 100 outlets across the UK and abroad. Half the new premises will be in the UK, which will create up to 1,000 jobs. He predicted that the expansion plan would increase the chain’s sales from £152 million next year to £500 million by 2025. Next month, Itsu’s grocery business will launch a partnership with M&S to stock Itsu-branded chilled broths in 500 of the supermarket’s food halls. Last month, Itsu introduced touchscreens that allow guests to customise their food. The technology has been installed at its new Lime Street site in the City of London, marking the brand’s evolution from its roots as a sushi restaurant. The touchscreens and extended hot dish range will be rolled out to 23 venues in 2020 and form the direction for future sites. 

Wright Brothers lines up City site: Wright Brothers, the oyster specialist and seafood wholesaler, is set to further expand in central London, with an opening lined up in the City. Propel understands that the five-strong group, which was founded by Ben Wright and Robin Hancock, is set to take space at the 1 Frederick’s Place development, close to St Paul’s Cathedral, for a restaurant and bar, with a first-floor private dining space. Since founding their seafood wholesale business in 2002 and launching their debut restaurant at Borough Market in 2005, Wright and Hancock have opened further venues in Soho, Spitalfields, South Kensington and most recently, the Battersea Power Station development. The wholesale side of the business subsequently moved from Borough Market to Billingsgate to aid expansion.

Kappa Sushi to double up in London, with Piccadilly opening: Kappa Sushi is to open its second site in London, after securing a former Strada restaurant in the West End. The company, which already operates a restaurant in Earl’s Court, has secured the site in Panton Street for an opening later this year. Emma Wright at CDG Leisure acted on the Panton Street deal.

Pho launches vegan menu: Pho, the Vietnamese street food restaurant group, has launched a new vegan menu with award-winning plant-based innovators, UK brand THIS. Adding 12 new vegan dishes for Veganuary, Pho will be using THIS Isn’t Chicken in starters, salads, noodle soups, rice bowls, curries and wok-fried rice. The addition of THIS Isn’t Chicken takes the restaurant’s vegan offering from about 25% to 40% giving more choice to both vegans and meat-eaters looking for a high protein alternative. All of the new dishes are also gluten free, and Pho is accredited by Coeliac UK. Also new on the menu will be “prawn-less” vegan prawn crackers and a vegan version of the traditional Vietnamese sauce Nuoc Cham. Juliette Wall, co-founder of Pho, said: “Our menu has been more than a quarter vegan for years now, and as we started to test new plant-based products to enhance our offer for ‘Veganuary’ we were blown away by THIS. It tastes delicious and works in so many of our dishes – we think our customers are going to love it (and won’t even miss chicken!).” Andy Shovel, co-founder of THIS, said: “When we created the products, the goal was to make them as versatile as possible so that they can be used in place of the real thing without compromising on flavour, texture & appearance. Our partnership with Pho is the perfect way to branch out into another cuisine and push the boundaries of what is possible with plant-based meat alternatives. They’re a really exciting restaurant brand and they’ve created some wicked dishes with THIS that meat-eaters will love.” 

Anglian Country Inns reports turnover growth: Anglian Country Inns, the pub and restaurant operator led by James Nye, has reported sales grew by £500,000 to £11.6m in the year ended 31 March 2018. The company stated: “This sales growth was due to a combination of the addition of the Lytton Arms to our portfolio and broadly flat like for like sales except for our town centre sites suffering lower sales due to the extremely hot summer. Despite continuing rises in food and drink costs we have managed to slightly improve the gross profit margins on both, resulting in an overall improvement in gross margin of 0.2 points to 71.8% (2018; 71.6%). Guidance from the central team through menu engineering and improved purchasing has helped to protect and increase margins. Overall, site Ebitda has fallen slightly to £1.7m (2018: £1.8m) with operating profit (before an exceptional property impairment charge of £501,000) falling to £40,000 following £200k of business restructuring costs incurred in the year to improve efficiency for the future (2018: £275,000) although due to associate company debt waivers the profit before tax has increased to £534,000 (2108: £186,000).”

Spaghetti House operator narrows losses: London restaurant company Lavval Group, owned by the Lavarini family and operating the Spaghetti House brand, saw turnover rise to £11.31m for the year ending 24 March 2019, compared with £11.26m the previous year. Pre-tax losses narrowed to £708,000 compared with £1.3m the year before. In March, Lavval Group closed its Pescatori restaurant in Charlotte Street leaving the business with ten Spaghetti House sites. The company was formerly known as Spaghetti House but changed its name in August.

Vaulkhard Group reports profit boost but turnover drops following some ‘significant investment property disposals’: Newcastle-based leisure firm Vaulkhard Group has reported turnover fell to £10.3m for the year ending 31 March 2019, compared with £10.5m the previous year after making some “significant investment property disposals”. Ebitda was down to £778,000, compared with £985,000 the previous year. Pre-tax profit rose to £1.1m, compared with £677,000 the year before. A report by the directors accompanying the accounts stated: “In April 2018 the group disposed of a freehold investment property in Alnwick, for a gross consideration of £250,000. In addition, in August 2018 the group disposed of further freehold investment properties for a gross consideration of £1.67m. This enabled the group to reduce its net debt position and to further invest in the leisure estate. In November 2018, the group took over the operation of The Diamond Inn in Ponteland and in March 2019 opened a third Barluga venue, in Gosforth. Overall turnover for the group has reduced by £245,000. However, £455,000 of turnover in FY18 was attributable to a coffee shop outlet that was closed during that year. The group is pleased to report a near 25% increase in turnover for the gin distillery. Rental income for the group has been impacted by the decision to dispose of the above-mentioned freehold investment properties. The reduction in Ebitda has mainly been as a result of the lag between the freehold investment property disposals and the reinvestment of those proceeds into a more profitable leisure refurbishment programme with Barluga in Gosforth, in particular, opening in late March 2019. Total comprehensive income for the year includes an increase in the value of the group’s tangible fixed assets of £918,000 – due principally to the above capital investment, in additions to lease extensions at a few sites.” As previously reported, earlier this month Vaulkhard Group secured a £7m finance package from HSBC to help support refurbishment projects and potential expansion within the 15-strong leisure business.

KFC launches vegan burger nationwide: Following a successful trial in London, Bristol and the Midlands last summer, KFC’s Vegan Burger is now being rolled out nationwide. The fast-food chain said that during the trial phase, the vegan burger sold out within four days, with demand over 500% higher than predicted – KFC Gloucester Road sold roughly one burger a minute in the first days following launch. Ira Dubinsky, innovation director at KFC UK and Ireland said: “The Colonel was all about welcoming everyone to his table – now vegans, flexitarians and our fried chicken fans can all enjoy the taste of our Original Recipe together. We’ve worked hard to perfect the flavour and make a Vegan Burger the Colonel would be proud of. It’s the flavour of KFC, just with zero chicken.” The KFC Vegan Burger is available in KFC restaurants nationwide from 2 January and is available on delivery exclusively with Just Eat. 

Wagamama launches vegan dish – watermelon tuna: Wagamama has become the first major UK restaurant brand to launch vegan dish – watermelon tuna. The dish will be featured during Veganuary and showcases Wagamama’s “wide ranging, distinctive and flavoursome vegan menu”. Last year, the brand launched the world’s first vegan egg to critical acclaim. Suika means watermelon in Japanese and the vegan ‘tuna’ is made with dehydrated watermelon which is then sliced, seared and served hot. The look and texture is incredibly similar to tuna sashimi, although the flavour remains reminiscent of watermelon. The ‘tuna’ is dressed with a miso sesame sauce and sits on a bed of white rice which is dressed with soy seasoning and accompanied with pickled radish, kale and tenderstem broccoli and an avocado, edamame and tofu guacamole. Wagamama executive chef Steve Mangleshot said: “My team and I are always excited about creating new dishes, we love to innovate and make people think about the food they are eating. After the vegan egg we knew we had to step it up a notch to create a vegan dish that was fresh and full of flavour. The watermelon tuna dish is all about innovation and creating exceptional vegan food for our guests. The joy of being able to produce really cool food that is both vegan and tastes fantastic at the same time is what it’s all about. Putting this on the menu for Veganuary gives us the opportunity to show off a great vegan dish alongside our ever-expanding vegan offerings. To create the watermelon tuna first we slice it into steaks and brine it with salt to balance the sugars and to help with flavour, as well as to take out some of the water content. We then cook the steak sous vide style (low temperature for a long time) in a water bath in order to soften the watermelon and give it that tuna texture which is very important because the texture is the winner for the dish. Once they are cooked the steaks are cooled to keep its tuna-like texture. They are then quickly seared on both sides to caramelise the steak, and then finished with a silky miso and sesame dressing which just elevates the flavours and whole experience. Stir-fried broccoli and kale are added to give the freshness and then that beautiful crunch of the pink radish. A bit of chilli for added kick and that is the fantastic-tasting vegan suika tuna. Perfect!” If it proves successful it will be added to the main menu.

Tom Simmons to open site in Cardiff: Chef Tom Simmons, who already runs a restaurant at One Tower Bridge in London, is to open his first restaurant in Wales in mid-February. Thomas by Tom Simmons will open in the former Cameo Club in Pontcanna, Cardiff, as Simmons and his partner Lois Thomas have taken over the lease for building that houses the private members club, which closed on New Year’s Eve. He said: “We are really excited to finally be coming to Cardiff, it has been a long time coming and something that Lois and I have always wanted to do. The London restaurant will continue to run as normal and we will be bringing some of our favourite and successful dishes from the London menu to Cardiff, as well as creating ones for the Welsh market.” Thomas will have the same ethos as the London restaurant, with the food served being influenced by British and French cuisine with a Welsh twist and most of the produce sourced from Wales. Simmons added: “The builders are moving in on 6 January and we plan to completely refurbish the building and put our stamp on it. There will be a bit emphasis on cocktails and Welsh ales too as we are creating a speak-easy type bar above the restaurant, along with a private dining area for functions and business lunch and dinners.”

Proper Pubs secures second pub site: Midlands pub operator Proper Pubs, led by Andrew Twigg and Mark Hynett, has secured the Star Pubs & Bars lease for The Swan, Whitacre Heath and are undertaking a joint £500,000 refurbishment with the company. This latest addition is their second pub – the other being The Plough in Huddlesford, Lichfield, Staffs which they took on in 2015 and transformed into a destination food pub. Andrew Twigg also operates The Sun on the Hill in Birmingham. Over next five years, Proper Pubs Ltd would like to add a further five West Midlands pubs to their portfolio of destination food pubs. Andrew Twigg said: “The Swan is a wonderful characterful pub in a fantastic village location. When we visited it we immediately saw its potential. The changes will improve the look of the pub which together with the menu and the new range of drinks, will give people more reasons to visit. We’re really looking forward to creating a fantastic local that villagers can be proud of, offering great quality food and drinks at a good price.” 

Smoke & Salt founders hit £140,000 crowdfunding campaign for permanent home: Chefs Aaron Webster and Remi Williams, founders of London restaurant Smoke & Salt, have hit their £140,000 crowdfunding target for a permanent home. Smoke & Salt launched in 2017 and currently works out of a shipping container at Pop Brixton. Now Webster and Williams are aiming to raise funds on crowdfunding platform Seedrs for a permanent home. They are offering 15.98% equity in return for the investment, giving the company a pre-money valuation of £736,000. So far, 181 investors have pledged £141,485 with two days of the campaign remaining. Smoke & Salt offers seasonal cuisine using techniques such as brining, curing, fermenting and smoking. Webster and Williams said: “We are looking to capitalise on our success by starting our own journey towards making Smoke & Salt Hospitality Group the edgiest and best in London. We want to share this journey with you and invite you on a journey that brings with it the kind of rewards money can’t buy.”

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