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Fri 12th Jul 2019 - Propel Friday News Briefing

Story of the Day:

Homeslice to carry out strategic review: London-based better pizza brand Homeslice has hired advisors as it carries out a strategic review of its business, Propel has learned. The company, which was founded by Mark Wogan, Alan Wogan and Ry Jessup in 2011, is understood to be working with Will Baxter at Dow Schofield Watts’ London office on the review, which will look at expansion and investment opportunities for the six-strong business. The company, which is thought to have turned over about £5.5m in its last full year, opened its sixth site early this year in James Street, Marylebone. It also operates permanent restaurants in Covent Garden, Fitzrovia, Shoreditch, the Bloomberg building and White City, plus a unit at Incipio Group’s The Prince in Earl’s Court. Earlier this year the company hired Werner Botha, formerly of Bill’s and Cote, as head of operations. Homeslice, which offers 20-inch pizzas whole or by the slice, launched with an event at London Fields Brewery and went on to operate at markets and festivals with Kerb, Street Feast and Frieze before taking up residency at King’s Cross Filling Station in 2012. It opened its first restaurant at Neal’s Yard, Covent Garden, in early 2013. The Homeslice website states: “The aim was to balance tradition with innovation, offering people our take on the classics alongside more unique flavour combinations. The result was a simple menu of pizza, beer and wine with quality, seasonal produce at its heart, served in a relaxed, friendly space.”

Industry News:

Mark Wingett to look at whether hospitality can be a career for life in latest Premium column, Kevin Charity video: Propel insights editor Mark Wingett will discuss whether hospitality can be a career for life as part of his latest opinion piece, which will be sent to Propel Premium subscribers on Friday (12 July) at 5pm. He will also introduce Premium Diary, which looks at some of the rumours doing the rounds across the sector. Subscribers will also receive a 30-minute video on Friday in which Kevin Charity, chief executive of the Coaching Inn Group, talks about the company’s huge success with coffee and its drive to develop a first-class coffee shop experience for customers while driving trade within what is a “traditional inns” concept. 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. They also receive access to our database of multi-site companies, which has now grown to 1,400 businesses. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email anne.steele@propelinfo.com

Wet-led leaders more upbeat as restaurant confidence falters: Leaders of wet-led businesses have more confidence in the market than their restaurant counterparts, according to the latest CGA Fourth Business Confidence Survey. More than three-fifths (61%) of wet-led business leaders feel optimistic for the 12 months ahead, with only one-third (33%) of food-led business leaders feeling the same. This echoes the Coffer Peach Business Tracker, which showed much stronger like-for-like sales growth for managed wet-led operators than for food-led ones in the past year. Overall, more than two-fifths (41%) of bosses are “fairly” or “very” optimistic about prospects for the eating and drinking out market over the next 12 months – up from 39% in February but down six percentage points on a year ago. Regarding their own businesses, almost two-thirds (65%) are “fairly” or “very” optimistic about the next 12 months, down from 75% a year ago. Almost half (45%) of leaders think consumers will eat and drink out less often in the next six months compared with current levels, with only 9% predicting they will do so more often. More than one-quarter (29%) of leaders reported their business’ performance in the past six months was below expectations. One-third (33%) of leaders plan more refurbishments this year than last, with only 14% planning fewer. CGA group chief executive Phil Tate said: “The patchy optimism is a sign that after many years of pub closures and restaurant expansion, the tables have turned. For many big brands in the sector, the aim for the second half of 2019 will be to preserve market share and invest in current assets ahead of new openings.” Fourth chief executive Ben Hood said: “Productivity and delivering efficiency gains is ‘mission critical’ for hospitality businesses and there’s clear momentum in this area, with operators harnessing technology to drive efficiencies and defend profitability.”

Happerley to launch England’s first national centre for food and drink provenance, in Banbury: Gloucestershire-based Happerley, which was founded to “break down the disconnect between producer and consumer”, is to launch England’s first national centre for food and drink provenance. Happerley England will be based at Lock29, a former BHS store at the Castle Quay development in Banbury in Oxfordshire that will be transformed into a 30,000 square foot space featuring street food stalls. Happerley England will open on 1 March 2020 to give farmers, suppliers and producers a platform to champion their “gold standard” produce in which every core ingredient must be directly traceable to farms or fishing boats. The centre will also feature an auditorium and cinema connecting consumers with the “journey of their food and drink”. Happerley founder and chief executive Matthew Rymer said: “By giving the country an experiential showcase of the best of English produce, we expect to create a national destination venue.” Happerley will also launch a roadshow this month, Happerley on Tour, which will visit every English county to celebrate its produce. Rymer, a food industry consultant and farmer, founded Happerley with Clifford Freeman, director of Gloucestershire Born Beef and owner of St Mary’s Hall Hotel on the Isles of Scilly.

BigDish launches in Brighton: BigDish, the food technology company that operates a yield management platform for restaurants, has launched in Brighton. A select number of restaurants are available on the platform but the company said it expected that figure to “increase quickly”. BigDish also revealed a new territory manager covering the south east would start on Monday, 5 August. Chief executive Sanj Naha said: “The addition of Brighton to the BigDish platform is incredibly exciting. We expect the location to be a major hub of BigDish activity and look forward to seeing more restaurants added.”

Company News:

Wagamama applies to open dark kitchen in London Fields: Wagamama, owned by The Restaurant Group (TRG), has applied to open a dark kitchen in London Fields, Propel has learned. Propel understands the brand is looking to take space at the Railway Arches in Mentmore Terrace and has applied to open a dark kitchen to prepare takeaway food and alcoholic drinks for delivery only. However, it is believed the plans have received objections from local residents. On acquiring Wagamama last year, TRG pledged to invest in more delivery-only kitchens. It said it recognised delivery as a significant area of opportunity, particularly as Wagamama was already one of the top brands on Deliveroo. Wagamama launched in a Deliveroo Editions site in Battersea last year. At the same time, Wagamama is understood to be in talks on a site in the City for its new grab-and-go concept Mamago after passing up on a former Starbucks site in Coleman Street. The brand is also set to strengthen its London presence with an opening in Old Street. Propel understands the Emma Woods-led group will open a restaurant at The Bower mixed-use development later this year. TRG, which acquired Wagamama for £559m last year, said it would continue to roll out Wagamama in the UK accelerated by converting some of its leisure division sites.

Alchemy Partners paid £12.1m for Inn Collection Group: The Inn Collection Group was acquired by Alchemy Partners from Kings Park Capital for a total consideration of £12.1m, new accounts have revealed. At the time of the sale in June last year, the business had made a loss of £894,968 from the beginning of the financial year. In its previous financial year, commencing on 1 January 2017, the loss was £1,751,986. The accounts also show Inn Collection Group paid £2.15m to buy the Waterhead Hotel in Coniston in September last year – its first property in the Lake District. The group has since added the Queens Hotel in Ambleside – its tenth site in total for which it paid £2.6m. The acquisition figures were revealed as Inn Collection Group reported its accounts for the seven months to 31 December 2018 – the period since Alchemy Partners acquired the business from Kings Park Capital. Inn Collection Group said it expects to see strong growth in sales and Ebitda in 2019 as it significantly expands. The company said it is constantly assessing new-build and acquisition opportunities and expects to have secured at least one more site by the end of this year. The group said it intends to add a further three to five sites annually to the portfolio. Turnover for the period was £6.2m, with gross profit of 80.2% and group Ebitda of £945,220. The company made an operating loss of £153,859 and a pre-tax loss of £1,825,068. The seven trading sites in the period produced a pro-forma 2018 12-month revenue of £10.5m – versus £10.2m in 2017 and pro-forma Ebitda of £2.3m – compared with £2.4m in the previous year. In the report accompanying the accounts, chief financial officer Claire Burgess said: “The first-quarter Ebitda was affected by the unusually adverse weather, which had an impact on trading at all sites. The Seaton Lane Inn was closed for part of the 2018 year (prior to the group acquisition) for refurbishment, while Bamburgh Castle Inn had 42 rooms refurbished during the period. This reduction had an impact on Ebitda. Without this closure the 2018 pro-forma trading Ebitda would have improved on 2017.” Managing director Sean Donkin told Propel: “We are delighted how the group is progressing this year and expect this to continue with strong sales and Ebitda from our established core sites while the continued maturity of our newer units develops.” Earlier this year, Inn Collection Group secured £10m from OakNorth as it plans to more than double its portfolio to 21 sites by 2022.

John Lewis to launch Mediterranean-style cafe concept: Retailer John Lewis is to launch Mediterranean-style cafe concept Ori Caffe across its estate, Propel has learned. The first cafe is set to open at its site in Bluewater, Kent, while Propel understands the company is also set to transform the Espresso Bar in its Milton Keynes store to the new format. Ori Caffe is described as an “authentic, Mediterranean-style cafe with flavours that build on a simple principle of quality”.

Waka to double up in London, in negotiations on third site: Nikkei fusion restaurant Waka is to double up in London. The company will open a venue near Liverpool Street in the City of London next month. The takeaway-only outlet will be at a former Ladbrokes betting shop in Houndsditch. As at its White City site, cold dishes will be available in fridges with the hot food prepared by chefs behind a counter. Propel understands Waka is also in negotiations on a third site. Waka launched in Eastcheap in the City in 2017 before moving to White City last year. Nikkei began its evolution in Peru in the late 1800s, when settlers from Japan – known as Nikkei – adapted their home cuisine using local ingredients.

Ego to open at former Harvester in Worcestershire: 3Sixty Restaurants, led by James Horler, has lined up a further opening as part of its joint venture with Mitchells & Butlers (M&B). The 17-strong company will take over former Harvester site The Forest in Lickey End, Bromsgrove. Currently closed, the pub will reopen at the end of August as Ego at The Forest. In August 2018, M&B formed a joint venture with 3Sixty to develop the Mediterranean-inspired restaurant and bar concept after Luke Johnson sold his minority stake to M&B. Ego will open Ego at The Wellington next week at a former Stonehouse Pizza & Carvery site in Shadwell, near Leeds. In May, Ego relocated its restaurant that had operated in Liverpool’s Hope Street for 18 years to The Punchbowl, a former M&B Vintage Inns pub in Sefton Village.

Taster hires Ellison as director of international operations: Delivery-only kitchen concept Taster, which was founded by one of Deliveroo’s early executives Anton Soulier, has hired David Ellison, formerly of Pret, Costa and Black Sheep Coffee, as director of international operations. Ellison stepped down as head of operations at Honest Burgers earlier this year after 15 months with the better burger brand. Taster opened its first three sites in London – in Battersea, Bermondsey and Hackney – earlier this year. Taster offers three pan-Asian brands – Mission Saigon (Vietnamese), O Ke Kai (Hawaiian poke bowls) and Out-Fry (Korean fried chicken). Taster works with third-party online food distribution channels such as Deliveroo and UberEats. Founded in 2017 by Soulier, Taster also operates in Paris and Madrid. In May, the company secured $8m (£6.3m) in Series A investment. The funding will support Taster’s expansion in the UK, where it currently has 20% coverage of London, aiming to reach 100% by 2020.

Frankster’s lines up ex-Five Guys site in Luton: Casual dining concept Frankster’s has lined up its sixth site and first in the south, in Luton. Propel understands the company is to replace the Five Guys unit in St George’s Square Mall, which closed in March three years after its launch. Earlier this month, Frankster’s opened a 155-cover venue at the former Handmade Burger Co unit in White Rose Shopping Centre, Leeds. Frankster’s, which was previously known as Frankie’s, offers burgers, peri-peri chicken, healthy grilled options, desserts and shakes. Frankster’s other restaurants are in Batley, Blackburn, Bradford and Morley, with openings planned in Leicester, Dewsbury and London before the end of 2020.

Joseph Holt to launch UK’s first airport micro-brewery, at £1bn Manchester super terminal: North west brewer and retailer Joseph Holt has revealed the pub it will launch at Manchester airport’s new “super terminal” will feature the UK’s “first air-side micro-brewery”. The Bridgewater Exchange will open in partnership with The Restaurant Group next spring as the brewer’s 127th outlet. Joseph Holt chief executive Richard Kershaw said: “As the capacity of terminal two increases, so will the number of people who can enjoy a taste of Manchester’s finest ales.” The £1bn terminal will include 14 other food and beverage operators, including ETM Group, Wagamama, San Carlo Group and Barburrito.

Punch joins National Pub Fortnight: Punch will join with Ei Publican Partnerships and Star Pubs & Bars this year for National Pub Fortnight, which will see 100,000 drinks given away from Friday, 19 July to Sunday, 4 August. The move will see the number of pubs taking part in the initiative increase to almost 2,500, while the number of free drinks will double from 2018. Consumers will be able to access a web-based app to claim a free drink from participating pubs. Heineken, Britvic and Diageo will offer a selection of drinks for the initiative. Ei Publican Partnerships managing director Nick Light said: “We are delighted to see National Pub Fortnight build momentum this year as Punch joins the initiative. Last year 39,000 people signed up to the offer and we are expecting more this year.” Punch managing director Andy Spencer added: “Publicans face many challenges so it’s important we come together and support each other in every way we can. Star Pubs & Bars head of business support Stephen Rooney said: “This is our third year supporting National Pub Fortnight and we’re excited to see this scheme grow.”

Greggs eyes further drive-thrus following Newcastle launch: Food-on-the-go-retailer Greggs is eyeing further drive-thrus after opening a site in its home city of Newcastle. The venue, located off the A1056 Sandy Lane in North Gosforth, is Greggs’ fourth drive-thru and is close to where the company opened its debut shop. The drive-thru has seating for 40 people inside and 40 outside. Chief executive Roger Whiteside said: “Since Greggs was founded 80 years ago, we’ve constantly evolved as a business to meet the changing needs of our customers. We know having convenient access to quality food on the go is key so that’s why we’re opening more stores where our customers want us to be, including more travel locations. We’ve experienced high demand from our drive-thru shops and hope to replicate that format elsewhere across the UK.” Greggs’ other drive-thrus are in Irlam in Greater Manchester, Ashby-de-la-Zouch in Derbyshire and Blackburn in Lancashire.

Loungers lines up Nuneaton site: Loungers, the operator of neighbourhood cafe bar restaurants trading under the Lounge and Cosy Club brands, is lining up a site in Nuneaton, Warwickshire. The company has applied to Nuneaton Borough Council for a premises licence at a former Maplin unit in Market Place. Propel understands the site would operate under the Lounge brand. Last month Loungers, which floated on the stock market in April, opened its 150th site – Fosso Lounge – in Wells, Somerset. At the time the company said its pipeline for sites was “strong and well advanced”, with the group remaining on track to open 25 sites – 20 Lounges and five Cosy Clubs – in its current financial year.

The Dancing Moose opens fifth site, at former Bill’s in Salisbury: Dorset-based bar and restaurant operator The Dancing Moose has opened its fifth site while expanding into neighbouring Wiltshire. The venue has launched at the former Bill’s restaurant in Blue Boar Row, Salisbury, which The Dancing Moose acquired in April. Bill’s closed the restaurant on Saturday, 25 May with the site transferring to The Dancing Moose Pub Company at the end of the month. Dancing Moose describes itself as “good food, good liquor, good people and good times” and operates sites in Ashley Cross, Bournemouth, Penn Hill and Wimborne. Its website states: “Set in the heart of the city centre, we’re just off Market Square. If you’re nipping in for a coffee in the morning, grabbing lunch in our courtyard or drinking away the evenings with our cocktails – we’ve got you covered all day long. As with all Mooses we’ll serve great food – from juicy burgers and dirty fries to light salads and house plates.”

Camerons to cease trading at Sunderland pub as lease ends: Camerons Brewery is to cease trading at The Ship Isis pub in Sunderland. The company’s lease with the University of Sunderland, which owns the building, ceases at the end of the month. The building is grade II-listed and has been a pub since 1885. A Camerons Brewery spokesman told the Sunderland Echo: “Our lease on The Ship Isis, which we have with the University of Sunderland, comes to an end on 31 July and we will stop trading at the pub as of Saturday, 27 July. We have been conducting an extensive review of our entire retail pub group and our current focus is growing our Head of Steam and Urban Country Pubs brands.” Camerons Brewery has 28 managed pubs in its group including Urban Country Pubs, which is based on the seven Leeds Brewery sites it acquired in 2016.

Hofmeister secures private investment: Hofmeister Brewing Company has secured private investment as it looks to expand distribution. The company worked with financial adviser and broker WHIreland to raise the undisclosed amount with multiple investors and existing shareholders. A heritage brand, Hofmeister was bought and relaunched in 2017 by founders Spencer Chambers and Richard Longhurst and has been reinvented as a Bavarian-brewed beer. The investment secured by WHIreland will be predominately spent on recruiting a full-time sales team supported by new marketing and point-of-sale material to expand retail distribution. Chambers said: “We are thrilled with the success and progress Hofmeister has made in the past two years. It is fantastic to have the backing of WHIreland. This round of funding was oversubscribed and it is amazing to see this kind of support for our brand.” Adam Pollock, head of corporate and institutional broking at WHIreland, added: “This is an iconic brand that deserves restoration to its former glory and we are proud to be associated with it.”

The Avenue Group to open fourth Liverpool site: Liverpool-based The Avenue Group is to open its fourth site in the city. The company will launch Mann Island Social, which is described as a space dedicated to “eating better and eating together”. The 4,000 square foot bar and restaurant will open at the end of this month between the Royal Albert Dock and the Three Graces, reports the Liverpool Echo. The menu will include sharing plates, hand-crafted burgers and salad bowls, while the bar will serve beer and cocktails. The Avenue Group also operates Avenue HQ, St Paul’s Social and East Parade Social.

Merlin extends plastic bottle exchange partnership with Coca-Cola: Merlin Entertainments has extended its partnership with Coca-Cola Great Britain to exchange plastic bottles for 50% off entry to attractions. Trialled last year, the initiative has been extended to 30 attractions, with “reverse vending” machines available for people to recycle 500ml plastic bottles in exchange for a voucher. Sandra Hazel, head of force for good at Merlin Entertainments, said: “This partnership is just one of the initiatives we are investing in to increase recycling at our attractions.” Kris Robbens, marketing director at Coca-Cola Great Britain, added: “We want to reward and recognise people for doing the right thing and make it easier to recycle on the go.” Meanwhile, Merlin Entertainments is to launch its first Legoland Water Park in Europe, at Gardaland Resort, Italy. The venue will open in 2020 as the first water park outside a Legoland. The move follows the opening of Magic Hotel in May, the third themed hotel at Gardaland Resort.

Lyle’s team launches ‘little sister’ in Borough Market: James Lowe and John Ogier have launched a “little sister” to their Michelin-starred Shoreditch restaurant Lyle’s, at Borough Market. Flor has opened as a wine bar, bakery and restaurant inspired by the “buvettes of Paris and the pintxos bars of San Sebastian”. Split across two floors joined by a cast-iron spiral staircase, Flor is housed in a 19th century building in the centre of Borough Market, with floor-to-ceiling windows and banquette seating. Lowe said: “Whereas at Lyle’s we focus on the best produce Britain has to offer, Flor pays homage to the European ingredients available in London. It is a smaller, more laid-back space – but with a big personality.”

Lake District-based operators cut hotel, pub and micro-brewery price by £300,000: Lake District-based operators Mark and Lesley Corr have reduced the price of the hotel, neighbouring pub and micro-brewery they are selling by £300,000 to £1.7m. The Coors put the Strands Hotel and Screes Inn and brewery in the hamlet of Nether Wasdale on the market for £2m in March 2018. Built as a hotel and post house, many original features remain including fireplaces and wooden beams. The 14-bedroom Strands Hotel also features a lounge bar, restaurant and three-bedroom owners’ accommodation. In 2007, the Coors added a micro-brewery and recently opened a brewery shop. In 2017 they bought the Screes Inn pub, which has eight en-suite letting rooms. Christie & Co is handling the sale.

Adam Rawson in double restaurant launch at new King’s Cross hotel: Adam Rawson, who trained under Nuno Mendes and Gordon Ramsay before launching Lucky Chip and Pachamama, has opened two eating and drinking spaces as executive chef of The Standard Hotel in King’s Cross. The ten-storey hotel has opened in Judd Street with the top section run by Michelin-starred chef Peter Sanchez-Iglesias and the entire ground floor run by Rawson and Angela Dimayuga, The Standard’s creative director of food and culture. Rawson has created all-day restaurant Isla, focusing on British coastal cuisine and natural wine, and Double Standard bar, which features a menu inspired by traditional pub classics and New York dive bars. The decor includes heavy-set wooden doors, textured glass and red carpet to encapsulate the “cosy feeling of a British local”. Rawson said: “I have really enjoyed the challenge of creating menus that reflect the distinct personalities of Double Standard and Isla.” The London site is Standard International’s first outside the US and sixth in total.

Marston’s wins national recycling award: Marston’s has won the “partnership excellence – commercial” category at the 2019 National Recycling Awards. The company won the award for its work with UK Waste Solutions to improve its on-site recycling rate from 59% to 77%, while it achieved zero waste to landfill in 2018, two years ahead of its target. Marston’s waste and recycling co-ordinator Jonathan Davies said: “Finding new ways to better our waste reduction will continue to be a big focus for us.”

 
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