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Morning Briefing for pub, restaurant and food wervice operators

Thu 27th Feb 2020 - Propel Thursday News Briefing

Story of the Day:

TRG delivery sales more than double, pub estate valued at £150m: The Restaurant Group (TRG) has said delivery sales across its Leisure business, which includes Frankie & Benny’s and Chiquito, more than doubled in 2019. The company, which has launched a number of virtual brands in the past 18 months, said it exited 2019 with delivery sales accounting for circa 6% of total sales from its Leisure business, of which online-only brands contributed about 50% of total delivery sales. Activity during the year included the launch of online brand Chicken Cartel in the majority of Chiquito sites. The company said it continued to pursue opportunities with its existing brands, recently improving and extending the menu of Kick-Ass Burrito, which is also available through its Chiquito estate. As previously revealed by Propel, TRG is also trialling a Caribbean collaboration with Levi Roots – Levi Roots’ Kitchen – in 12 Chiquito sites on UberEats. TRG said it saw further opportunities to extend the reach of delivery sales and recently introduced a Vegan By Frankie’s online brand exclusive to UberEats, which includes a smoky beet burger at £9.99 and a vegan margherita at £8.39. Meanwhile, TRG said its freehold pub estate, which includes Brunning & Price and Food & Fuel, is valued at more than £150m. The group operates 72 pubs under the Brunning & Price umbrella and 12 under the Food & Fuel banner. About 50% of its pubs are freehold. A valuation of the group’s freehold pub estate by Savills in November valued it at £153m. In its full-year update, TRG said its overall pub business had been “continuously outperforming the market”, with like-for-like sales up 4% and particularly strong trading over the Christmas period with like-for-like sales up 8%. The business, which is led by Mary Willcock, opened four sites in 2019, with all four “trading ahead of expectations”. The company plans to open three to five sites this year, which include already secured sites The Telegraph in Putney (opening in April) and Rake Hall in Little Stanney in Cheshire (opening in September). TRG said in the next 12 months its pub business planned further menu development including a broader vegan range; an enhanced drinks range; improvement and extension of events; optimisation of centralised bookings; and further utilisation of space. 

Industry News:

NPD Group to host webinar on how to build breakfast success in the eating-out market: Insights firm The NPD Group is to host a webinar on “how to build breakfast success in the eating-out market”. The event will take place at 1pm on Thursday, 12 March. The 30-minute presentation by Dominic Allport and Gareth Nash, of the company’s UK Foodservice practice, will use NPD Group data to share the latest information and their own insights into British out-of-home breakfast trends. The session will include how to win at breakfast; UK success stories; products and channels to focus on; how to attract new buyers into the breakfast market; buyers you should target; and the future of breakfast in the UK. To register for the webinar, click here

Simon French to explore whether sector is experiencing another case of déjà vu in latest Premium column: Bixteth Partners co-founder Simon French will explore whether the sector is experiencing another case of déjà vu with change painfully slow to effect despite everybody’s best efforts in the latest Propel Premium column, which will be sent to subscribers at 5pm on Friday (28 February). Meanwhile, Premium Diary will listen in on the latest sector whispers. 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, and regular columns from Mark Wingett. Subscribers also receive access to our database of multi-site companies, which has grown to 1,500 businesses. Propel has launched its new-look Premium Club, where readers can save money by receiving a pair of free tickets to one of four conferences in 2020. Subscribers will be able to choose to use a pair of free tickets to one of the following conferences – The Delivery Conference (Tuesday, 21 April), The Finance and Investment Conference (Thursday, 14 May), The Casual Dining Summit (Monday, 12 October) or The New Concept Conference (Monday, 19 October). The normal cost of two tickets to these events is £490 plus VAT for operators and £690 plus VAT for suppliers. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email

TRG begins Hilton hotels link-up with opening at former Jamie’s Italian: The Restaurant Group (TRG) has begun a new link-up with Hilton hotels through its Concessions business by opening a restaurant and bar at the former Jamie’s Italian in More London, Propel has learned. 1751 Distillery Bar & Kitchen combines an on-site gin distillery with modern British dining. The name 1751 relates to the gin act of the same year, created to curb excessive gin drinking. The 5,834 square foot space consists of a 191-cover restaurant and dedicated bar. The venue also offers a hireable 15-cover private dining room with views into the distillery, which features a 50-litre still producing six house gins. Gin features heavily on the drinks list with a dedicated cocktail menu, house-distilled gin and tonics, and gin sliders. The restaurant offers “modern British dining with an international influence”, plus an open kitchen and “theatre cocktail bar”. TRG Concessions managing director Nick Ayerst told Propel: “We are delighted to open such an ambitious and exciting concept in the heart of one of London’s most iconic areas.” In its full-year update, TRG said it would continue to explore opportunities to expand its presence in adjacent markets and expected to open two sites, both bespoke brands, within Hilton hotels this year. Propel understands the company has also signed with Hilton for a site in Canary Wharf, where it will take over all catering barring conference and events. This second location should open in early May with all-day brasserie Olsen’s Social – a shipping name linked to the dock the hotel was built on. It will also incorporate the hotel’s bar and dedicated coffee shop. In terms of its overall Concessions business, TRG said like-for-like sales rose 4.1% for its full year on the back of four openings in 2019. It said 90% of its legacy business during the year received a contract extension, while an average extension is 100% of the original lease term.

Just Eat launches drone delivery trial: Just Eat, the online food delivery company, has launched a drone delivery trial. The company has partnered with drone delivery company Manna, Dublin-based healthy food delivery firm Camile Thai and Ben & Jerry’s ice cream for the pilot. The trial will take place in Dublin from next month with the aim to deliver food from restaurant to customer in less than three minutes. Just Eat Ireland managing director Amanda Roche-Kelly said: “This will transform the business of food delivery as we know it and greatly improve the delivery experience for our customers and add to the countless ways we connect people with food. We are proud to be the world’s first online food-ordering and delivery platform to provide a commercial drone delivery offering to customers.” Manna chief executive and founder Bobby Healy added: “This technology will transform online food marketplaces, restaurants, dark kitchens and communities globally.”

Trade bodies back MPs’ report calling on government to unlock pubs’ potential: The British Beer & Pub Association (BBPA) and UKHospitality have welcomed a report published by a group of MPs that calls on the government to recognise the role of pubs in boosting Britain’s economic and social well-being. The report, entitled Unlocking Pubs’ Potential, reveals the findings of an inquiry conducted by the All-Party Parliamentary Beer Group. It recommends the government fundamentally reviews business rates for pubs and cuts beer duty. BBPA chief executive Emma McClarkin said: “This report recognises pubs are much more than a place to drink, they’re the heart of the community, bringing us together and enriching our lives. They’re a force for good, putting back into society and creating jobs and genuine career opportunities. It’s vital the government continues to recognise the role pubs play in boosting national well-being. That starts with a cut in beer duty and fundamentally overhauling business rates to help keep locals open. It’s now on chancellor Rishi Sunak to listen to these calls and deliver a Budget that helps pubs.” UKHospitality chief executive Kate Nicholls said: “Pubs are fantastic economic and social assets. They are one of our high streets’ biggest assets, although they have struggled against crippling taxes for too long. The report makes a number of sensible recommendations in line with what we have been calling for. We hope the government acts on it to help pubs.”

Regional UK hotel market feels pressure of substantial new supply: The regional UK hotel market is feeling the pressure of substantial new supply despite Europe’s overall market seeing value rise for a third consecutive year, according to a study by consultancy HVS. The company’s European Hotel Valuation Index (HVI) found one of the biggest value fallers of the cities it studied in the past year was Edinburgh (down 2% in euro terms and 3% sterling), with only Warsaw worse off (down 5%). Edinburgh’s woes were largely blamed on significant new supply entering the market in the past couple of years, although the city remains as popular as ever with occupancy levels at more than 80% during the past six years, HVS said. However, there was mostly good news for the region as only six of the 33 markets tracked in the European HVI showed a value decline, with the biggest rises in Istanbul, (17%), Bucharest (11%), Bratislava (11%), Athens (10%) and Brussels (7%). Maria Coll, consulting and valuation analyst with HVS London, said: “While the European pipeline remains below double figures and the lowest on a global basis, key German cities and regional UK markets are feeling the pressure of substantial new supply.”

BII extends Licensee Of The Year deadline: The British Institute of Innkeeping (BII) has extended the entry deadline for the Licensee Of The Year Award 2020 to Friday, 13 March. Entrants must have been operating their business for at least two years, hold a personal licence and have a food hygiene rating of four or five. A rigorous judging process will end with the winner announced at the BII Summer Event on Tuesday, 16 June. The winner will receive a year’s free Sky Sports subscription as part of their prize. The BII will provide £500 towards a party in the winning licensee’s pub to celebrate with staff, while this year the winner will also receive a free day’s on-site training for their team on any subject they choose – courtesy of CPL Training. BII chief operating officer Steven Alton said: “This competition searches for the gold standard in our industry – a licensee who excels in all aspects of running their business. They must be the full package.” Licensees can nominate themselves or be nominated by colleagues, customers or suppliers at or call 01276 684449.

Michelin to let public attend star-award ceremony for first time: Michelin is to allow the public to attend its star-award event for the first time. It made the announcement on Twitter as it revealed the newly starred British and Irish restaurants for the 2021 edition will be revealed at Camden Roundhouse in north London on Monday, 19 October. In another first, a separate event to reveal the Bib Gourmands – awarded to restaurants serving three courses for less than £28 – will be held the day before. Michelin held its first live event for the Great Britain and Ireland guide for its 2017 stars announcement.  

Company News:

Revolution Bars Group to start hunt for specific sites next month as it steps up expansion plans: Revolution Bars Group chief executive Rob Pitcher has told Propel the company will start looking for specific sites next month as part of plans to return to the expansion trail in 2021. Pitcher said having got its Revolution brand “almost back to where it was”, the company could start stepping up its growth plans. Speaking following the company’s interim results, Pitcher said: “The past two Revolution sites we opened have performed particularly well. I don’t think the demographic for us has changed. We know the places where the brands work and it’s now about restarting the search for particular properties, which we will begin doing next month as we expect to start opening sites again in the second half of the next financial year. Once we pinpoint the building, we can decide which of our brands it suits. There’s probably more opportunity around Revolución de Cuba as there are only 19 of them. We’ve worked hard on improving all dayparts with Revolution and are happy with its position in the market. We’ve seen 5% volume growth in food and growing Saturday night sales too. It’s getting back to what it was.” Pitcher said expansion would be on a “site-by-site basis rather than through acquisitions” as the company looked to open a couple of venues. He added: “We want to expand but we’ve still got refurbishments to do. We’ve got to make sure we continue driving the core business forward and avoid making the same mistakes as in the past.” With regards to talking to landlords about rent reductions, Pitcher said the company previously identified eight to ten leases it wanted to engage about. Having now exited six of those venues, Pitcher said there were only a handful of sites where it was still looking to re-gear rents, so work was “almost complete”. Pitcher said while he was pleased with the results, which saw adjusted profit before tax rise 20.5% to £3.5m and adjusted Ebitda up 10.6% to £7.6m, there was still “plenty of work to do”. He added: “There’s momentum with both businesses and our investment in the estate is producing good results. We’re building a solid platform that has allowed us to reduce debt, which should be at a level of one times adjusted Ebitda by the end of the year. Like-for-like sales are up 1.6% at the start of the second half of the financial year and positive sales momentum continues.” 

Wagamama expands delivery kitchen estate, trials ‘pay-on-phone’ function: Wagamama has said it plans to open three to five delivery kitchens in the UK this year. The Emma Woods-led company currently operates three delivery kitchens – in Hackney, Bow and Leeds. Propel understands the group’s next delivery kitchen will open in Peckham. The company said it would focus on areas not covered by its restaurants – such as Peckham – and towns and cities with demand opportunities – such as Leeds – for further roll-out of the concept. The business, which reported its first £1m week of delivery sales during the second quarter of its current financial year, said it also planned to further develop its delivery operation by installing more bespoke delivery stations in high-volume sites to speed packing and working with its delivery partners. The brand, which is owned by The Restaurant Group  (TRG) said it planned to trial a “pay-on-phone” functionality in the next 12 months as part of a technology upgrade to provide customers with a “faster service and remove the need to wait for the bill before paying and leaving”. In its full-year update, TRG said delivery sales rose to 12% of Wagamama’s total sales in 2019, up from 10% in 2018, driven by “implementation of operational and technology improvements such as bespoke delivery stations, Deliveroo tablets and a switch to fully recyclable packaging”. Regarding other formats TRG also said it would spend the next six months evaluating its grab and go format, Mamago, which launched in London’s Fenchurch Street late last year, before deciding whether to roll out more. In terms of its core estate, Wagamama completed eight conversions in 2019, with those sites generating an “average weekly sales uplift of 120%, with an expected return on invested capital of more than 40%”. The company plans to convert five or six more sites in 2020 as part of ten openings overall and believes there’s scope for further conversions in 2021.

Bill’s continues management changes by appointing sales and marketing director: Bill’s, which is backed by Richard Caring, has continued to make changes to its management team with the appointment of Piers Walkers as sales and marketing director, Propel has learned. Walker was previously director of marketing and acquisitions at hospitality management company The Ghost Group. He replaces Lesley McIlroy, who is leaving the business to pursue other opportunities. McIlroy was promoted to the role of marketing director last year. She joined the 78-strong business in November 2018 as head of marketing from Comptoir Group, where she was group marketing director. Earlier this month Nick Gray stepped down as Bill’s chief financial officer after less than six months with the business. The Ivy Collection chief financial officer Jonathan Peters is understood to be currently carrying out the same role at Bill’s. At the start of the year, Bill’s appointed David Hoyle, formerly of Fuller’s, as people director. His appointment followed the departure of Odette Schwartz, who joined Bill’s as people director from Wahaca at the start of 2019. In early 2020, Bill’s reshuffled its management team with executive chairman David Campbell and managing director Sarah Hills stepping down from the business. Baton Berisha, already managing director of The Ivy Collection, took on management of Bill’s with immediate effect.

SSP and Diageo warn coronavirus will hit profits: SSP Group, the UK-based transport hub foodservice specialist, and drinks company Diageo have warned of expected profit hits caused by the coronavirus outbreak. SSP Group has warned it expects to take a £5m profit hit in February as sales in the Asia-Pacific region – the centre of the outbreak – halved this month. It said falling passenger numbers across the region, which accounts for 8% of total group revenue, would reduce overall revenue by circa £10m to £12m this month. Operating profit for the whole group is expected to drop by between £4m and £5m. SSP said passenger numbers at China and Hong Kong airports had plummeted 90% and 70% year-on-year respectively as flights were cancelled and people stayed at home. Coronavirus has also had an impact on passenger numbers at airports in Australia and major travel hubs in the Middle East and India. In response to the falling sales, SSP Group has temporarily closed some units and cut operating hours. It added: “Clearly the duration of the virus and its impact on global travel is uncertain at this stage, as are its consequences for our financial performance for the full year. We will continue to take necessary action as appropriate.” Diageo said it expects a £140m to £200m decline in profits in the year to the end of June. Sales are expected to be down £225m to £325m. The company warned its estimates, which depend on the “timing and pace of recovery”, exclude coronavirus’ impact on markets beyond Greater China and Asia-Pacific. “We have seen significant disruption since the end of January, which we expect to last at least into March,” the company said. “Thereafter, we expect a gradual improvement, with consumption returning to normal levels towards June.” Meanwhile, SSP said it would work with shareholders after almost one-third (31%) opposed its remuneration report at its annual meeting on Wednesday (26 February). It is the third year running SSP has faced a backlash over its pay policy, with many shareholders reportedly unhappy at proposals to cut executives’ bonus targets and an 8% pay rise for chief financial officer Jonathan Davies. SSP stated: “While we are disappointed by the outcome of the vote, we remain keen to encourage an ongoing dialogue with our shareholders and value active participation in that process. We will work together with our shareholders on our new remuneration policy, which is expected to be tabled for approval at our 2021 annual meeting in line with the normal cycle for renewal.”

Old Amersham Hotels and Redesdale Holdings refinance debt to progress ‘other business opportunities’: Old Amersham Hotels, which operates three hotels in Buckinghamshire, and sister company Redesdale Holdings, which runs two hotels in the Cotswolds, have refinanced their debt to “progress other business opportunities”. Cynergy Bank provided £8.55m in newly negotiated loans for the two companies – £5.55m for Old Amersham Hotels and £3m for Redesdale Holdings. The loans have allowed the businesses to refinance existing bank debt and release part of shareholder loans. The loans were provided with repayments modelled over a 25-year term. Old Amersham and Redesdale managing director David Ashfield said: “We have been heavily invested for the past seven years during a build and growth period. With the finance on our portfolio of hotels reaching maturity, this refinancing enables us as a group to progress other business opportunities.” Cynergy Bank relationship director Steve Crosswell added: “The shareholders of Old Amersham Hotels have supported the businesses since inception and created an attractive group of good-performing assets in strong locations. We were delighted to enable them to refinance from their existing lender and withdraw a portion of their loans and we look forward to working with them in the future.” Old Amersham Hotels operates the Crown, the Kings Arms and Kings Chapel, all in Old Amersham, while Redesdale Holdings operates the Redesdale Arms in Moreton-in-Marsh and Number Four At Stow in Stow-on-the-Wold. The bank was advised by Helena Gleeson and Sean Ludden, of Christie & Co, and James Walton and Susanna Caulfield, of Rosling King.

Former River Café chef to open restaurant and wine bar in Bloomsbury: Chef Anna Tobias, formerly of River Café and Rochelle Canteen, is to launch a restaurant and wine bar in Bloomsbury, central London. Tobias will team up with Rafe Hodgson’s 40 Maltby Street team to launch Cafe Deco. Tobias has taken a new lease on the 43 Store Street site from the Bedford Estate. The landlords will hand over the property in the next couple of weeks with an opening due before the summer. The site will offer a casual affair on the ground floor, with more restaurant trading space in the basement. Adam Bowers, of Stonebrook London, acted on behalf of Tobias.

Barworks reopens The Diner in Dalston as gastro-pub: Barworks, the central London bar and pub operator, has reopened The Diner in Dalston as a gastro-pub. The company first applied to Hackney Council to convert the venue in Kingsland Road in July 2018. The 19th century building housed The Crown & Castle until the turn of the century, when it became a Chinese restaurant. Now the pub has reopened under its former name. Last year Barworks reopened the former Beef & Brew site in Hackney under its original name, the Duke of York, and launched the White Bear in St John Street, Smithfield. Barworks operates 13 pubs plus Mare Street Market and five sites under The Diner name, which have been part of Barworks since July 2019. The Diner sites will be converted to independent wet-led operations during the next year. In October Propel revealed the company, which is led by Marc Francis-Baum, had applied to take on Jamie Oliver’s former Fifteen site in Hoxton.

Gulliver’s Kingdom to open fourth and largest theme park, in Rotherham: Family-run theme park operator Gulliver’s Kingdom is to open its fourth and largest theme park to date, in Rotherham, South Yorkshire, this spring. The multimillion-pound development in Rother Valley will span 250 acres and feature more than 50 rides and attractions including an indoor climbing centre, an indoor play area and a Lost Jurassic World. Accommodation at the park will include “unicorn and princess suites, western cabins and Lost World lodges”. The first phase of the development will create between 120 and 150 jobs. Gulliver’s Theme Park Resorts managing director Julie Dalton told The Business Desk: “We are incredibly excited about the opportunities arising for the community to get involved. We have been a family-run business for more than 40 years and I can confidently say anyone who joins becomes part of that family.” Gulliver’s other theme parks are in Milton Keynes, Matlock Bath and Warrington.

Starbucks expands ready-to-drink portfolio: Starbucks has expanded its ready-to-drink portfolio by adding nitro cold brew. It is the latest product to join the ranks of innovations developed since Starbucks and PepsiCo formed the North American Coffee Partnership in 1994. The nitro cold brew comes in three flavours – black, dark caramel and vanilla sweet cream. They are available in cans at grocery retailers and select Starbucks sites in the US.

Climbing centre operators eye expansion as they launch second site: Climbing centre operators Chris and Beth Walthew are eyeing further expansion after opening their second site. The husband-and-wife team, who run the Clip ‘n Climb centre in Cambridge, have launched Climb Quest in Milton Keynes. Described as a “climbing centre meets theme park”, the venue in the Kingston Centre features 25 climbing walls, two extreme challenges and a cafe. The Walthew’s expansion was supported by a £1.2m package from NatWest and Lombard Asset Finance. Beth Walthew told Insider Media: “Once Climb Quest is established in Milton Keynes we will look at expanding our portfolio of centres further afield, bringing a family-friendly and unique climbing experience to other UK towns and cities.”

Whistle Punks to expand Birmingham site: Axe-throwing operator Whistle Punks is to expand its Birmingham venue following high demand since it opened two years ago. The company will add a fifth lane to the site near New Street Station, which will boost capacity to 50 people. John Nimmons and Jools Whitehorn launched Whistle Punks in 2016, with its other sites in London, Bristol and Manchester. Whitehorn told The Business Desk: “Expansion at our venues is a sure sign things are heading in the right direction and we’re excited to see what the future holds.” Last month Propel revealed Whistle Punks, which is backed by Edition Capital, was in talks to take space at 1 Finsbury Avenue for what will be its debut central London site and second in the capital. Last year the company secured £1.5m of new investment from Edition Capital and appointed former Carluccio’s operations director Chris Poole as head of operations.

Yorkshire-based caravan park operator starts expansion with second site: A Yorkshire-based caravan park operator has started expansion by acquiring a second site in the county, with both parks in or near the city of York. York Caravan Park (YCP) has bought Naburn Lock on the outskirts of the city for an undisclosed amount. The 115-pitch site will be modernised with upgraded pitches, landscaping and electrics, as well as new washing and toilet facilities and a glamping area. YCP owner Andrew Wilson told BDaily: “Acquiring Naburn Lock is the culmination of a three-year search for the right holiday site with an abundance of potential. Demand for quality campsite accommodation continues to grow each year across all generations and, after establishing a strong foothold within the adults-only space, it was a clear focus of mine to enter the family market and deliver more accommodation within the beautiful city of York. A glamping area will bring a new accommodation offer that will drive a diverse mix of visitors and further growth to the local economy.”

Nando’s confirms Wigan move: Nando’s has confirmed it will take a unit at the Robin Retail Park in Wigan, years after expressing an interest in opening in the Greater Manchester town. In May 2016, Nando’s was given permission by Wigan Council to open a site at a different hotel and restaurant scheme, which has since stalled. Now London-based project manager Cogent BC, which is acting on behalf of Robin Park landlord Nuveen, has told Wigan Today it is under contract to build an outlet for Nando’s ahead of a June opening. Cogent partner Paul Hewitt said: “It is an exciting prospect to have such a highly regarded and well-known restaurant operator coming to Wigan. It will improve the offer of the park for people who shop there and those who go to other facilities and venues nearby, including the football and rugby. Restaurants improve dwell time, meaning people are less likely to dart in and out of a retail park if there’s a chance to stop for a meal or coffee midway through.” Nando’s has also revealed the opening of its site in Sittingbourne, Kent, has been “slightly delayed”. The restaurant, in the Bourne Place leisure quarter, was due to open in May but has been pushed back slightly, reports Kent Online. A firm opening date has yet to be confirmed.   

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