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Morning Briefing for pub, restaurant and food wervice operators

Fri 8th Oct 2021 - Propel Friday News Briefing

Story of the Day:

Nicholls – locking in lower VAT rate will create 125,000 jobs and keep UK tourism competitive globally: Keeping the VAT rate for hospitality at 12.5% will create 125,000 jobs and produce money for the government after just four years, according to UKHospitality chief executive Kate Nicholls. It is also needed to keep the UK competitive on the global stage, where competitors for tourism are already enjoying reduced rates, she said. Writing exclusively in Propel’s Friday Opinion, Nicholls spelt out her fears of what would happen if, as proposed, VAT returns to 20% for hospitality businesses next April. “The economic case for maintaining a reduced rate of VAT at 12.5% is as compelling for the government as it is for the sector,” said Nicholls, following this week’s launch of UKHospitality’s VATsEnough campaign. “Our thorough analysis of key economic metrics highlights the benefits of a permanent reduction as opposed to a return to 20%. It will create 125,000 full and part-time jobs; the policy is revenue positive after just four years and the net cost is minimal at £213.4m per year in the early years. The economic model also calculates the subsequent boost in demand from lower prices and increased investment will generate a greater economic return and sector growth in the long term.” Nicholls added: “We need the chancellor to lock in the 12.5% rate for our sector because permanently retaining this lower rate will bolster businesses’ ability to boost the recovery. It will allow us to navigate the mounting challenges in the labour market and food supply chain; improve job creation; boost wages, productivity and investment; ensure price inflation is kept to a minimum and ensure the UK remains competitive in a global tourism market, where all our competitors already have reduced rates.” Nicholls will share more of her thoughts in this week’s Friday Opinion, which will be published on Friday (8 October) at 11am.

Industry News:

Sponsored message – Food Alert strengthens its consultancy service with STS Food Safety acquisition: Food Alert is strengthening its national food hygiene and health and safety audit service following the acquisition of STS Food Safety by parent company, The Citation Group. The introduction of the STS team into Food Alert will further reinforce the consultancy’s ability to provide a responsive audit service for its growing client base, which includes new clients US burger chain Wendy’s, Itsu, Marugame and late-night operator, Rekom. The integration will also see Food Alert extend its services into supply chain assurance, by adopting STS’s supplier certification and management system and service. This gives businesses the tools to maintain due-diligence and demonstrate their suppliers have good food safety standards and controls in place. Food Alert managing director David Bashford said: “STS is a perfect match for Food Alert with shared values and an established and trusted reputation. The talents of STS’s consultancy team will strengthen our reach across the country so we can continue to provide a quality service for our growing number of national group clients.” If you have a sponsored story you would like to see featured in this newsletter position, email
21 new companies to be added to Propel’s Turnover & Profits Blue Book: The next edition of Propel’s Turnover & Profits Blue Book, produced in association with Mapal Group, will include 427 companies, an increase of 21 companies compared with the September edition. The 427 companies produce total turnover of £30bn – 208 are in profit and 219 are reporting a loss. The next edition of the Blue Book will be sent to Premium subscribers on Friday, 15 October at midday. The Blue Book, which is updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive two other databases – the New Openings Database, produce in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel insights editor Mark Wingett. In this week’s Premium Opinion, which will be sent to subscribers on Friday (8 October) at 5pm, Lavender Bank Partners Geof Collyer analyses the Financial Reporting Council’s 65-page report on Grant Thornton’s performance in regards to auditing the former AIM-listed Patisserie Valerie; while Mark Wingett looks back at the week just gone, including the sudden departure of PizzaExpress group chief executive David Campbell, the Conservative Party conference, the Tortilla initial public offering and a positive update from Revolution Bars Group. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. To subscribe, email
Friday Wrap continues with Tortilla’s Brandon Stephens and Richard Morris: Propel continues its Friday Wrap video series on Friday (8 October) at 3pm. The series, which is sponsored by innovative staffing solution provider Stint, sees Mark Stretton, former sector journalist and now head of sector PR firm Fleet Street Communications, and Propel insights editor Mark Wingett discussing this week’s key issues facing the UK’s hospitality sector, with a leading sector operator or expert. This week they are joined by Brandon Stephens and Richard Morris, founder and chief executive, respectively, of Tortilla, to discuss the group’s initial public offering, how the business reached the decision to float, what it means for the group’s expansion plans, the role delivery has played in its success and the growth of Mexican food in the UK. 
CMA launches inquiry into Admiral’s £222m takeover of Hawthorn: The Competition and Markets Authority (CMA) has launched an inquiry into Admiral Taverns’ £222m takeover of community pub operator Hawthorn. Admiral agreed a deal to buy Hawthorn, which has 674 venues across the UK, from retail property investor NewRiver, in July. The move will strengthen Admiral’s position as one of the UK’s largest pub owners, growing its portfolio to more than 1,600 pubs. At the end of last month the CMA said it was considering whether to launch an investigation into the deal and invited parties to comment on the competition impact of the takeover. Although the deadline for comments is Tuesday (12 October), the CMA has notified Admiral Taverns and Hawthorn it has “sufficient information to enable it to begin an investigation for the purposes of deciding whether to make a reference for a phase 2 investigation”. The deadline for the CMA to announced its decision on whether to move to a phase 2 investigation is Thursday, 2 December. NewRiver left the pub sector through the deal, in an effort to raise funds to help further its growth within retail. The company entered the pub industry in 2013 before expanding with its acquisition of Hawthorn in 2018 for £107m, into which it incorporated its existing estate. In April the group first disclosed its plans to offload Hawthorn as a stand-alone business.
Northern Ireland to remove social distancing restrictions and reopen nightclubs: The legal requirement for one-metre social distancing in bars and restaurants in Northern Ireland is to be removed from Sunday, 31 October. Nightclubs will also to be allowed to reopen, with legal restrictions on dancing in venues scrapped, first minister Paul Givan has announced. It is thought businesses will be asked to check for vaccine certificates, but it will not be a legal requirement, while face masks will remain mandatory in certain settings. Acknowledging just how hard the hospitality sector had been hit by the restrictions, Givan said: “I’m pleased at the end of this month they will be able to operate in a much more sustainable and viable way.” Deputy first minister Michelle O'Neill, meanwhile, warned people should remain cautious. “We’re in for an uncertain period ahead, and we have to work our way through that as best we can,” she added. Earlier this week, the Welsh government voted in favour of covid passes for nightclubs and large-scale events after a failed Zoom connection stopped Tory MS Gareth Davies casting what would have been a crucial vote to block it. The Welsh scheme will come into force from Monday (11 October), while a similar plan got under way in Scotland this week, but England will only follow suit if data suggests action is needed to “prevent unsustainable pressure on the NHS”.
Job of the day: COREcruitment is looking to speak to qualified finance directors or chief financial officers in the Liverpool area to join an established leisure and hospitality business. A COREcruitment spokesman said: “The business is looking for support across all areas of finance and the director will ensure the team and business is properly supported, meeting all filing and tax obligations, annual budgeting, and ensuring daily and weekly balance sheets and cash flow is in order. The director will need to delivery regular financial accounting as well as ensure projects are delivered to a high standard and will have the opportunity to work closely with the managing director to implement short and long-term business plans. You will also support on future development and expansion strategy and oversee annual capex and investment appraisals. This role would suit a hands-on finance professional who is fully qualified. The salary on offer is up to £110,000.” Anyone interested can email

Company News:

Coconut Tree planning four new openings: Sri Lankan street food restaurant group The Coconut Tree is planning four new openings in the next 12 months. Speaking this week at the Propel Multi-Club Conference, Coconut Tree co-founder Anna Garrod said the group’s most recent opening in Reading was performing “really well” and the business was looking at further opportunities to take “Sri Lankan food into the mainstream”. The business opened in Reading’s Kings Road, in the former Zizzi premises, in August. It followed hot on the heels of The Coconut Tree’s opening in Bath in May – with other branches in Cardiff, two in Bristol, Oxford, Cheltenham and Bournemouth. Garrod said: “We feel now is the right time for us to keep pushing The Coconut Tree forwards. In the UK, Sri Lankan food is not as widely available or understood as say, Indian or Chinese cuisine, and we want to help change that; we want to be the ones to make it mainstream.” The Coconut Tree was originally founded by five Sri Lankan friends living in Cheltenham. Praveen Thanginah, Dan Fernando and Shamil Fernando are the head chefs and oversee the food side of things; while the board of directors is made up of financial director Mithra Fernando, operations director Rodrigo Rashinthe and Garrod.
Quick service US burger brand Carl’s Jr steps up plans to enter UK market: Quick service US burger brand Carl’s Jr has stepped up its plans to enter the UK market. The brand, which was founded in 1941 and operates more than 1,000 restaurants across 28 markets worldwide, said it was signalling its intentions to launch in the UK by joining the British Franchise Association (BFA). It said the move was a key step to “building relationships across the UK's franchise industry” for the brand, which is owned by CKE Restaurants. Propel reported last year Carl’s Jr was looking to secure a master franchisee for the UK and launch the brand here. The business, which is led in Europe by Tim Lowther, formerly of Burger King, Shake Shack and Smashburger, said the agreement with the BFA was further evidence of its ambitious growth plans for Europe. It already operates 79 restaurants in the region and recently signed a master franchise deal to open 300 restaurants in Russia. CKE Restaurants already has more than 1,000 international restaurants in 40 markets worldwide and aims to double that number in the next five years. Building on this success, Carl’s Jr aims to double its number of restaurants in EMEA in the next five years. It said gaining a foothold in the UK is “central to this ambition and core to the brand’s development strategy”. The business said: “According to a recent study, the European fast-food market will reach a valuation of $17bn by the end of 2026, and as one of the largest markets in the region, the UK will contribute to a significant percentage of this growth. With Carl’s Jr restaurants already present in central Europe and expansion plans set in place in Russia, the company sees the UK as the natural next step in its European expansion.” Lowther said: “The UK hospitality industry has been in a state of flux over the past year, as a result of the pandemic. But as we move towards a return to normality, there is great opportunity for quick service restaurant brands to define the post-pandemic eating experience. With this in mind, it's an exciting time to bring the Carl's Jr brand to the UK.” CKE has been looking at launching in the UK since the turn of the past decade. In 2011, it was looking for UK companies able to invest £16m for 25 or more units. In 2017, the business again announced plans to launch in the UK, and said talks with prospective franchisees had begun.
Roadchef reports sales recovering ‘strongly’, secures waivers on financial covenants: Motorway services operator Roadchef has reported sales have been recovering “strongly” since restrictions were lifted while it has secured waivers on its financial covenants for the remainder of 2021. The company said while further local and national coronavirus restrictions continued to impact trade in 2020, conditions were “not as adverse as the first UK-wide lockdown of March 2020, helped by the continued operation of our Costa Coffee and McDonald's offers, albeit on reduced hours”. Providing the update as it filed its accounts for the year ending 27 December 2020, Roadchef said the pandemic had resulted in a serious short-term impact on the group’s performance. In their report accompanying the accounts, the directors stated: “The availability of support from the government and key suppliers, such as the Coronavirus Job Retention Scheme, enabled the group to continue trading through the peak of the crisis without the need of any additional funding support. Liquidity has remained healthy and the majority of the group's employees have been retained, which has been key to provide a platform for the group's recovery. As a result of this trading environment a waiver request was required from the group's lenders in respect of the financial covenants and other potential default events up to and including 31 December 2021. This request has been granted, providing the group with sufficient time to recover profitability. With a further national lockdown imposed in January 2021, trade continued to be impacted in the early part of 2021. However, as restrictions were lifted, traffic and revenue rebounded strongly and immediately, with revenue reaching more than 110% of normal prepandemic levels during August 2021. Management are confident revenue levels will be sustained through the remainder of 2021.” As a result of the pandemic, full-year revenue fell 42.3% to £114.2m, compared with £198.0m the previous year. Ebitda was down 73% to £11.2m, compared with £41.5m the year before. Pre-tax losses rose to £37.5m from £4.2m the previous year. 
Plant-based restaurant group Mildreds to open in Covent Garden: Plant-based restaurant group Mildreds is to further expand in central London, with an opening in Covent Garden, Propel has learned. The Sam Anstey-led business has secured the Steak & Co site in Garrick Street for an opening in February. Mildreds currently operates sites under its eponymous concept in Soho, Dalston, Camden and King’s Cross. The company is set to open a new concept called Mallow in London’s Borough Market this autumn. The one-off concept in Cathedral Street, will serve “great value, fresh, colourful and internationally inspired plant-based food and drinks”. The disposal of its Garrick Street site leaves the London-based Steak & Co with sites in Piccadilly Circus, Gloucester Road and Leicester Square. Distrkt acted on the Garrick Street and Borough deals. 
Gordon Ramsay works up Bread Street Kitchen openings pipeline: Chef Gordon Ramsay is in talks on two more sites for his growing Bread Street Kitchen concept – in London and in Liverpool, Propel understands. The chef, who is accelerating the roll-out of his Bread Street Kitchen, Street Pizza and Street Burger concepts, is understood to currently be the lead bidder to take space on the upper floor of 22 Bishopsgate in the City for the former brand. Meanwhile, Propel understands Ramsay is also in talks to take the former Jamie’s Italian in Liverpool’s Paradise Street. It is also thought Ramsay is in talks on another central London site for his Street Burger brand. Ramsay currently operates three Bread Street Kitchen & Bar sites in the capital, plus a Bread Street Cafe in Ealing. He is also set to open a Bread Street Kitchen in Edinburgh, on Drake & Morgan’s former The Refinery in St Andrews Square.
Zip World reports strong demand as it sees full-year revenue almost halve: Adventure tourism operator Zip World has reported strong consumer demand since reopening as it reported full-year revenue almost halved as a result of the pandemic. The group opened its new self-built site at the Tower Colliery, near Rhigos in south Wales, in April and took over operations at the Llechwedd quarry in Blaenau Ffestiniog, north Wales, the following month. Zip World is also acquiring a hotel – Tyn Y Coed – in its Snowdonia heartland with the deal on target to complete this month. The company said this would further add to the extent of Zip World's investment in the tourist industry in north Wales. It comes as Zip World reported turnover fell to £8.3m for the year ending 31 December 2020, compared with £15.6m the year before, as a result of the business being forced to shut for extensive periods due to the government enforced lockdowns in Wales. Ebitda before exceptional charges was £2.2m, compared with £5.4m the previous year. Pre-tax losses increased to £6.8m, compared with £3.6m the year before. Exceptional charges of £400,000 were principally costs incurred in relation to an aborted contract opportunity and HR related costs. No ordinary dividends were paid. The directors did not recommend payment of a further dividend. In their report accompanying the accounts, the directors stated: “Customer demand since reopening has been strong as a result of pent-up demand and the group's investment in building the brand during lockdown. Pre-paid customer bookings were retained in the business until reopening and are now being utilised by our customers. The strategy of the business moving forward is to grow revenue through a combination of organic growth, new site builds, and acquisitions, as it expands its adventure experiences across the UK.”
Pelican State to double up with an opening in Bloomsbury: Pelican State, the American seafood restaurant concept, is to double its presence in London, with an opening in Bloomsbury. Propel understands Pelican State, which is led by the team behind what was Fancy Crab in Marylebone, has secured the former YO! site in the Brunswick Centre for its next opening. The first Pelican State opened on the former Fancy Crab site in Wigmore Street in November last year. The concept is “inspired by the cooking styles and flavours made famous in America's Deep South states, specifically Louisiana”.
Björn Frantzén to make UK restaurant debut at Harrods next year: Swedish chef Björn Frantzén, who runs the three-Michelin starred Frantzén in Stockholm, will open his first UK restaurant at Harrods late next year. The new venue will be within a prime location of the flagship Knightsbridge store. Although it will be Frantzén’s first UK restaurant, he has worked in the capital before having had spells at both Chez Nico's and Pied a Terre at the start of his career. He said: “I really got a feel for, in my opinion, one of the most interesting cities in the world, so it feels right to be coming back to open in London. Over the past few years, there have been several projects and opportunities arise in London, but none have felt right until now. It is an honour to be opening at Harrods as one of the most celebrated institutions in the world.” Some of Frantzén best-loved dishes include king crab in fermented apricot and sudachi sauce with ikura, caviar and wasabi; and hot smoked quail with kabu, wasabi and pata negra. The likes of Jason Atherton, Tom Kerridge, Vineet Bhatia and Gordon Ramsay have all opened premises, some counters and some full rooms, at Harrods in recent years.
Young’s acquires freehold interest of Bloomsbury pub: London pub retailer Young’s has acquired the freehold interest of The Lamb in Bloomsbury from The Governing Body of Rugby School for an undisclosed sum, Propel has learned. The property in Lamb’s Conduit Street was previously let and operated by Young’s under management prior to the acquisition. The pub was constructed in about the 17th century and retains many original features. It is one of the few remaining pubs with “snob screens”. Jack Sinclair, of James A Baker, acted on behalf of the seller and Daniel Mackernan, of Savills, represented the purchaser.
Korean food and culture hub concept Oseyo secures seventh site: Korean food and culture hub concept Oseyo has secured its seventh site – and sixth in London – in Hammersmith. The concept has taken a 1,251 square foot unit at Hammersmith Broadway Shopping Centre in west London. The business already operates sites in Soho, Camden, Tottenham Court Road, Angel, Waterloo and Manchester. Meanwhile, Joe & The Juice has taken a 1,154 square foot site at the entrance to the scheme on a new ten-year lease. Archie Morriss, of GCW, who advised on the two deals, said: “These exciting operators will add variety and interest to the retail and food and beverage offer at the shopping centre, which is now seeing footfall begin to recover to 2019 levels.”
Roxy Leisure reveals new experiential concepts for its Roxy Lanes relocation in Leeds, eyes Bristol site: Roxy Leisure, the operator of the Roxy Lanes and Roxy Ballroom concepts, has released more details of its new gaming hub, set to open in Leeds early next year. The company is relocating Roxy Lanes, a bar and bowling alley based in Bond Street since 2014, to a new venue three times the size (15,000 square feet) of its current base, in The Light in The Headrow. It will incorporate all the elements of existing Roxy venues under one roof, with two bars plus a basement dedicated to gaming, which will feature ten bowling lanes, two duck pin bowling lanes, shuffle boards, American pool tables, beer pong and one of only a few ice curling lanes in the UK. Roxy brand development manager Joel Mitchell said: “While the Bond Street venue was a great starting point for us as a brand, it’s now time to up the ante, and we’re delighted to be able to expand and offer our customers even more of that Roxy Lanes experience. It’s a huge venue that has enabled us to add more games and a bigger bar area.” The Bond Street venue will continue to trade until the switch-over takes place. Meanwhile, Roxy Leisure is understood to be eyeing an opening in Bristol for its Roxy Lanes brand. The company is believed to have lined up the former Fitness4Less site in the city’s Union Street, for a possible future opening. Roxy Leisure also runs competitive social gaming concepts at two other Leeds locations, Merrion Street and Boar Lane, and has plans for further venues in York’s St Mary’s Square and Edinburgh’s Princess Street. The company has also this year unveiled plans to double its Roxy Ballrooms presence in both Nottingham and Birmingham. Last month Roxy Leisure chief executive Matt Jones told the Experiential Leisure in Casual Dining panel at Casual Dining 2021 he believes he could “easily” triple the number of sites he runs from ten to 30 in the coming years, and that trade is 50% up on pre-covid levels.
Historic Oxford pub back on the market after Young’s deal falls through: The historic Eagle & Child pub in Oxford is being marketed to let by Savills after a deal with London pub retailer Young’s fell through. Expressions of interest for a new lease with a rent guide in the region of £165,000 per annum are being sought, with refurbishment and extension work expected to commence late in 2021 or early in 2022. Planning permission for six hotel rooms at the property, which is owned by St John’s College, has been granted. Savills has been instructed to market the pub on behalf of St John’s College, and Chris Bickle, director in the licensed leisure team at Savills Southampton, said: “We are privileged to work with St John’s College to find a new operator for one of Oxford’s most historic pubs. The proposed renovation works will enhance the building while providing potential for additional room income on the upper floors. We are extremely encouraged by the calibre of operator interest shown to date.” Savills was also instructed on the recent letting of the former Pint Shop let to Busaba and the nearby Lamb & Flag pub, also owned by St John’s College, to community interest company The Inklings. Authors CS Lewis and JRR Tolkein were known to frequent both pubs.
Taco Bell franchisee Adil Group opens site in Hounslow: Mexican restaurant brand Taco Bell has opened a site in Hounslow, west London. Franchisee Adil Group has opened the outlet in High Street. Adil Group operates more than 130 sites in the UK with partners KFC, Costa Coffee, Burger King, Taco Bell and Anytime Fitness. Taco Bell operates 67 sites in the UK. The company has more than 7,500 restaurants across the globe with Glen Bell having opened the first in Downey, California, in 1962.
Shutov set to reopen Bob Cité with new name, head chef and menu overhaul: Owner Leonid Shutov is set to reopen Bob Bob Cité, his French restaurant in London’s Leadenhall Street, later this month after keeping it closed since the first lockdown. Renamed Bob Bob Ricard City, the venue will have a new head chef, Ben Hobson, who has worked at The Hand & Flowers, The Star Inn at Harome and Galvin at Windows. He will be in charge of an updated menu, with new dishes including escargots en persillade and quail grillé with truffle jus. Shutov opened sister venue Bob Ricard, which offers a Russian-inspired modern British menu, in Soho in 2008, while Bob Bob Cité, which will throw open its doors again on Tuesday, 26 October, followed in 2019. Following lockdown, Shutov reopened Bob Bob Ricard in August 2020 – again with a revamped menu and a new head chef, Tom Peters, formerly of Maaemo and Roux Parliament Square. Earlier this year, alternative lender ThinCats provided a capital funding package to Bob Bob Ricard to help it recover from the effects of its pandemic-enforced closure.
Langan’s Brasserie to reopen at end of month: Langan’s Brasserie, operated by Graziano Arricale and James Hitchen, will reopen at the end of the month. The original Brasserie opened in 1976 as a joint venture between actor Michael Caine and restaurateur Peter Langan. Reimagined for a new generation, each of the three floors will have its own distinct visual identity when it relaunches on Saturday, 30 October. At the end of the main dining room on the first floor will sit a dedicated seafood bar. The ground floor will be home to an invite-only late lounge, while the lower ground floor will offer a private dining room that seats up to 20 guests. Arricale’s family has always been in the restaurant trade and his personal career path has seen him work with industry stalwarts such as Richard Caring where he was operations director at Caring’s Birley Clubs, playing an integral role in the relaunch of Annabel’s. Hitchen is the founder and former chief executive of East Coast Concepts. Arricale and Hitchen said: “We are proud to be bringing the new and reimagined Langan's to London. We look forward to creating a real hub for locals, along with those from the worlds of fashion, art, film and music to help us bring Langan’s back to its rightful place at the centre of Mayfair.”

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