Propel Newsletter Archive Page

Luke Johnson – things will start to look better late in 2023, but the next 12-18 months will break a lot of businesses: Serial sector investor Luke Johnson believes the landscape will look a lot better for hospitality operators by late 2023, but the next 12-18 month will “break a lot of businesses”. Speaking at this month’s Propel Multi-Club Conference, Johnson said: “It’s been said a quarter of all sector businesses don’t think they will survive, and I’d guess 95% of them are small businesses, which is a great tragedy because what I’ve always loved about this industry is its diversity and fragmentation. It’s a wonderful place for someone to start a business, innovate and succeed. Unfortunately, family-run private businesses are more vulnerable than those with institutional backing and don’t have the depth of balance sheet to cope. I think late next year things will start to look better, but it will be the next 12-18 months that breaks a lot of businesses, and it’s always very sad to see places shut. I’m going to sit on my hands until we get through the winter as this winter will be very difficult, we’ll see how things feel in March.” Johnson said the current recession “may be the worst of all the recessions we have been through” and the sector “may face the worst conditions of many industries”. He added: “Clearly the better players will prosper, but valuations have got to be super-realistic. Personally, I would only put money into something that was a compelling proposition at a compelling price at this stage. The era of zero interest rates is over and money has got incredibly expensive, so that must effect the price of equity in businesses. In my experience of previous recessions, London and the M25 outperformed, and it will be even more so this time because if you look at the economics, the energy bills and food pricing are not really an issue for the top 25%, and we all know the demographics of this country is enormously skewed in terms of the wealthier population towards the south east. I also think businesses aiming at that better-off market that still have a discretionary spending budget may do better. People might cut back on a skiing holiday or a new kitchen, but I don’t think they will cut back on a nice coffee or cocktail or meal out in their favourite place.” Johnson’s presentation will be among the videos from the Propel Multi-Club Conference that Premium subscribers will be given exclusive access to next Wednesday (30 November) at 9am. 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.

Industry News:

Matt Snell among speakers at Restaurant Marketer & Innovator European Summit 2023, open for bookings: Matt Snell, chief executive of premium casual dining restaurant group Gusto Italian, will be among the speakers at the Restaurant Marketer & Innovator European Summit 2023. The event is a partnership between Propel and Think Hospitality, aiming to build a community, promote the sharing of ideas, recognise talent and define the future of eating out. Bookings are now open for the two-day conference as the centrepiece of the January event series, taking place on 24 and 25 January at One Moorgate Place in London. Snell will discuss how banning discounts has improved the business’ net promoter score. More than 50 industry and agency leaders will take to the stage over two days, representing brands including Gail’s Bakery, Hawksmoor, Burger King UK, Loungers, The Alchemist, Hall & Woodhouse, BrewDog, East Coast Concepts, Press Up Hospitality Group, Krispy Kreme, Mission Mars, Inception Group, New World Trading Company, MJMK, Caprice Holdings, Hakkasan, KellyDeli, Tattu Restaurants, Red Engine, Vapiano, The Cocktail Club, Hilton, Elior, Flat Earth Pizzas, Lollipop, Lego Restaurants, Cornish Bakery, Chotto Matte, Ping Pong, Nobu, Searcy’s and Six by Nico. Day one themes will be consumer and sector trends, start-ups, concepts and creativity and digital evolution, while day two focuses on purpose and responsible business, strategies for growth and communication and culture. Tickets for operators for the two days are £600 plus VAT and £350 plus VAT for one day. Tickets for suppliers are £950 plus VAT for the two days and £525 plus VAT for one day. Tickets can be purchased by contacting Jo Charity at Propel on jo.charity@propelinfo.com.

Number of franchise operators set to join updated Premium Database of Multi-Site Companies: A number of franchise operators are among the 23 new multi-site companies being added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday (25 November), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features Jay Singh, a Papa John’s delivery driver turned multi-unit franchisee, who operates five sites in Surrey and Hampshire. Also added this month is Soul Foods Group, a multinational quick-service restaurant franchisee with almost 400 sites across the UK and Canada, and among the top three largest franchisees of KFC and Starbucks. In addition, north east fish and chip franchise Bell’s, a family run business led by qualified chef Graham Kennedy, which has five sites, will be featured. Meanwhile, McDonald’s franchisee Lemaca, which is owned by Eddie Leligdowicz, and has 14 restaurants in the Stoke and Derby areas, is included. Premium subscribers will also receive a 2,000-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. The database now features 2,722 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 2 December, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes an 8,000-word report on the new additions to the database. Premium subscribers also receive access to the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group, and the UK Food and Beverage Franchisor Database. Premium subscribers are also to be given exclusive access to the recording and slides from this month's Propel Multi-Club Conference. The videos will be sent on Wednesday, 30 November, at 9am. 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. 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 Mark Wingett.

NTIA calls latest train strikes ‘catastrophic’ and warns of another Christmas of struggle for sector: The Night Time Industries Association (NTIA) has warned the latest round of train strikes will be “catastrophic” for the sector and compared it to the Omicron-hit Christmas of last year. A series of strikes will be held across four 48-hour periods on 13-14 and 16-17 December and 3-4 and 6-7 January. It follows RMT members at Network Rail and 14 train companies voting last week in favour of further industrial action. Separately, the Aslef union, which represents drivers, has already announced it will hold another strike on Saturday (26 November) in a dispute over pay, in an action that affects 12 train companies. “The announcement of further strike action during the festive period will be catastrophic and will inevitably have a knock-on effect on service either side of the key holiday period,” said NTIA chief executive, Michael Kill. “These sporadic weekly or daily planned strikes are eating into consumer confidence, leaving many concerned about travelling. Our industry is already suffering heavily from rising costs as inflation reaches a 40-year high, and with consumer disposable income at an all-time low, coupled with rail strike action, we feel we are revisiting Christmas 2021.” UKHospitality chief executive Kate Nicholls said: “Continued rail strikes have had a huge impact on our hospitality sector; preventing staff from making it into work and disrupting consumers’ plans meaning a huge drop in sales for venues across the sector. Further strikes during the busiest time of the year for hospitality will be devastating, just as everyone was anticipating an uninterrupted Christmas period for the first time in three years. I’d encourage all parties to come together to find a resolution that can avoid further strikes and the disruption they cause both businesses and the public.” Emma McClarkin, chief executive of the British Beer and Pub Association, added: “Businesses across the country will be relying on a busy Christmas period to pull them through what is set to be an incredibly difficult winter in the months that follow. Pubs have been hoping to make the most of Christmas party bookings and festive gatherings for the first time in three years. The week of the strikes is usually the busiest in the year for our industry, but instead of supporting pubs, customers will be cancelling bookings and staying home, while staffing shortages will be exacerbated by a lack of transport options for employees.”

Government has ‘underestimated the true value of club culture in the UK’, says new report: The government has “underestimated the true value of club culture in the UK”, according to a new report. The findings by the Electronic Impact Group, which includes professors from the University of Leeds and University of Central Lancashire, highlights “nightlife’s contribution to the UK economy far exceeds the revenue it generates”. It added: “By focusing exclusively on their commercial value, we overlook both the roles individual clubs play within their local communities and the broader socioeconomic context within that nightlife operates”. This includes providing “community and belonging”, providing spaces for “expression and identity”, promoting mental well-being and should be celebrated for shaping communities and culture. The report added: “These quantified benefits are often presented when urging the wider public to tolerate what some only perceive as noise-polluting local venues. However, nightlife’s contribution to the UK economy far exceeds the revenue it generates, and is significantly underestimated by the UK government in its lack of consideration and direct support.” Night-time culture economy accounts for 1.6% of GDP – or £36.4bn – and 425,000 jobs across the UK. Michael Kill, chief executive of the Night Time Industries Association, said: “Aided by this report, wider society will grow to recognise electronic music and club culture as one of the most important economic and cultural movements of the future.” Silvia Montello, chief executive of the Association For Electronic Music, added: “It is great to see the collection of academic evidence of these benefits outlined clearly in a report, which can contribute towards a broader understanding of the importance of our music and scene to millions of people, alongside the clearly defined commercial and economic benefits. The need to dance, to express, to commune and to build friendships that know no barriers of race, class, gender or creed are fundamental.”

Dining app First Table launches in UK: Dining app First Table has launched in the UK. Users are rewarded for dining during a restaurant's quieter hours with a 50% saving off their food bill. There are more than 300 restaurants on board with the platform in the UK and 1,400 globally. Users pay £5 to secure their First Table reservation, and then pay for their discounted meal at the restaurant after dining. Founder Mat Weir said: “Our mission at First Table has always been to make it easy to discover great restaurants and spend time with the people you love.” The app, which has also been launched in Australia and Bali at the same time as the UK, has had more than 30,000 downloads in New Zealand and a total of 45,000 globally after it was made available during a soft launch in April. Weir began First Table in Queenstown, New Zealand, with a custom made booking system built from scratch.

Hospitality leaders sleep out to raise awareness of homelessness: More than 100 chief executives and business leaders, including many from the hospitality industry, gave up their warm beds to raise awareness of homelessness. They spent Monday night (21 November) sleeping outdoors at Lord’s cricket ground for CEO Sleepout London and raised £177,000 for local charities, supporting people facing homelessness this winter. With the cost-of-living crisis worse than ever, there is now a 23% increase of people sleeping rough compared with 2021. Hospitality leaders joining the effort included Martin Williams, chief executive of Gaucho and M Restaurants; Andy Hornby, chief executive of The Restaurant Group; Una O’Reilly, group chief of people at Caprice Holdings; and Yishay Malkov, chief executive of Various Eateries. CEO Sleepout has partnered with local charities ensuring the vast majority of funds raised stay in the London area. These include SHP, Walking With The Wounded, Charity Begins at Home, Borderline, Only a Pavement Away, London Irish Foundation, The YES Charity, Depaul UK, Haircuts For Homeless, and Sutton Night Watch. Various speakers told their story throughout the evening too. Since CEO Sleepout was founded in 2013, events have raised £3.2m, with funds being donated to charities across the UK.

Former Brighton Pier Group chairman passes away: Brighton Pier Group has announced former chairman and senior independent non-executive director James (Jim) Fallon has passed away. The company stated: “Jim was instrumental in leading the initial public offering of the company to AIM in 2013, stepping down from the role of chairman in June 2015 and continuing as the group's senior independent non-executive director, a role he fulfilled until this week.” Chief executive Anne Ackord said: “Jim has been an outstanding mentor to me and the board. His quiet counsel, eye for detail, and extensive business experience will be sorely missed by everyone he came into contact with. On behalf of everyone at the company, I want to say thank you to Jim for his outstanding contribution and offer our heartfelt condolences to his family and friends.”

Company News:

SushiDog plans to double in size in 2023: Quick service sushi roll restaurant SushiDog plans to double in size in 2023, and has a long-term ambition to open in every major city in the UK. Speaking at this month’s Propel Multi-Club Conference, SushiDog co-founder Greg Ilsen said the four-strong London business planned to have eight sites open by the end of next year. Founded in 2018 by Ilsen and Nick Goldstein, the business operates sites in Covent Garden’s Tower Street, Westfield White City, Soho and Bishopsgate. Ilsen said: “We’re already in discussion with landlords about our next sites, which we’re hoping to open in the first quarter of 2023. Despite the very challenging trading environment we’re all operating in, we’re really hopeful for the future and looking forward to executing on our ambitious growth plans.” When it comes to financing, Ilsen said the business was fortunate to have some family back at the beginning. He said: “We took advantage of the SEIS scheme, which really enabled us to launch the business with not that much capital. Since then, we’ve done a small amount of funding in recent times. We made a rule we were never going to take on debt with personal guarantees, which is not something we wanted to do. Suddenly, covid arrived and these new loans, such as the Coronavirus Business Interruption Loan Scheme, came along, and we could get debt without personal guarantees. We funded Soho and Bishopsgate with some debt, which was something we were initially quite worried about doing, but it’s actually opened our eyes to the fact if you can pay it back comfortably, debt’s actually a perfectly fine way to fund the business. We’ve taken on a bit of debt and we’ve given away a bit of equity, but thankfully not too much.” Ilsen said the business aims to generate 20%-plus Ebitda at its stores, all four of which he said were profitable. He added: “I think our gross profit is not as good as some operators will have, purely because we work with raw fish, which was expensive to start with, and now it’s gone through the roof. The thing we really win on is labour, which is a very strong part of our business and means we can generate good Ebitda. We aim to generate 20%-plus Ebitda at all our stores. That used to be very comfortable, it’s now a challenge, but it just means we’ve got to restructure our menu or react to that. Although we’re fighting that battle at the moment, we think there’s still plenty of opportunities to trade at that level.”

Farm Girl closes in on £530,000 funding mark, secures transport hub site for Roll Baby concept: Farm Girl, the London healthy eating cafe concept, is closing in on securing £530,000 with one day left of its crowdfunding campaign, as it secures a transport hub site for its fledgling Roll Baby concept, Propel has learned. Farm Girl, which said it “survived the pandemic and came out stronger than ever”, launched a campaign through Seedrs last month, and hit its target of £400,002 at the start of November. The company, which is offering 4.2% of equity for the investment, giving a pre-money valuation of £9m, has a goal to have ten Farm Girl sites and 25 Roll Baby sites operating across London by 2027. It currently operates five eponymous sites in total across the capital. Last year, the company launched Roll Baby, with the opening of a kiosk site in South Kensington underground station. Co-founder and chief executive Anthony Hood said: “We are pleased to have secured a new site for Roll Baby – inside the new Paddington station redevelopment. We have agreed the lease with the landlord, aiming to start the fit out works in the new year and open in the spring of 2023, in line with the official opening of the major new Paddington Square transport, shopping and office development. At the same time, we are close to finalising the heads of terms on further Roll Baby locations, to be announced shortly. These new Roll Baby sites can be launched in the first quarter of 2023, kickstarting the planned expansion of our healthy grab and go concept.” The company plans to add on average one all-day brunch Farm Girl cafe with 50-70 seats each year and four to five Roll Baby sites annually.

Rekom opens first international site for Pryzm brand: Rekom, the operator of circa 200 late-night venues internationally and 47 in the UK, has opened the first overseas site under the Pryzm brand, in Finland. The company has opened a nightclub under the Pryzm brand in Turku, the oldest city in Finland. Rekom has already transferred its Heidi's Bier Bar and Proud Mary concepts from the continent into the UK. On opening further Pryzm sites on the continent, Rekom UK chairman Peter Marks told Propel: “We will look for others as and when the appropriate rebranding or new-build comes on to the radar.” Rekom has so far launched Heidi's Bier Bar – a concept that first launched in Copenhagen in 2004 and now boasts 20 venues across Norway, Denmark and Finland – in Cardiff and Birmingham. The UK’s first Proud Mary pub opened in Cardiff at the end of last month following a £1.2m investment.

Japanese restaurant group secures London site for European debut of fast-food concept: Japanese restaurant group Dining Innovation has secured a European debut for its speciality fast-food concept, Yakiniku Like. Yakiniku Like Soho will open in a 2,200 square-foot space at 47 Greek Street next year, “delivering a fast-food concept rich in both flavour and efficiency”. Yakinuku Like has more than 260 sites across China, Taiwan, Japan, Singapore and Indonesia, and joins sister brand Kintan, which has two sites in London, as Dining Innovation seeks to expand in Europe. Guests will be able to have wagyu beef, karubi, harami, pork belly and chicken thigh grilled to their personal preferences, using individual smokeless grills. Dennis Maneefuangfoo, chief executive of Dining Innovation UK, said: “We are pleased to be bringing Yakiniku Like to Europe, and what a better place to launch than in London. We believe our concept will be well received, suiting an array of lifestyles including individual visits and family occasions.” Shelley Sandzer acted for Dining Innovation.

Crosstown to open Brighton site: Crosstown, the artisan doughnut and speciality coffee concept, is to add to its regional presence with an opening in Brighton. The business, in which Foresight, the backer of Mowgli and Roxy Leisure, invested £3m in earlier this year, will open in Sydney Street in North Laine, on Friday, 9 December. It will follow regional openings in Oxford and Cambridge, for the business, which operates 26 sites in total, with the majority based in London. Adam Willis, co-founder of Crosstown, said: “Crosstown goes coastal! We’re excited to be making our way down to Brighton, our third location outside of London, following Cambridge and Oxford openings. In our Brighton store we’ll be serving our award-winning doughnuts, chocolate, and coffee, as well as fulfilling event and catering orders to the people of Brighton. Crosstown are no strangers to Brighton, having been delivering to the city since 2020 with our nationwide delivery offering. We’re excited to be offering both locals and visitors the entire Crosstown experience, with our full offering readily available to them.”

Park Holidays acquires two sites: Holiday park operator Park Holidays UK has acquired two sites in the north of England as part of its expansion plans. The company has purchased Chevington Castle holiday park in Northumberland and Cottage and Glendale holiday park in Cumbria from Callaly Leisure. Chevington Castle in Rothbury spans 320 acres and has planning permission for 950 static and touring holiday caravans. Cottage and Glendale is a premium development in Port Carlisle that totals 300 acres and includes facilities such as a leisure suite, lakeside bar and bistro and mini-golf course. Also included is an adventure play park, village store and laundrette. It currently has 380 pitches, with planning permission granted for an extra 54 static pitches and 34 touring pitches. The acquisitions bring the number of parks operated by Park Holidays UK to 56. Savills acted on the deal.

Fuller’s offers London staff another way to get home safe: London pub retailer Fuller’s is giving its staff in the capital an alternative, affordable, safe and sustainable transport option to get home safe. The company has partnered with Lime, the electric scooter and bike company, to give staff access to 50% off all Lime e-scooter and e-bike rides in the capital. The partnership comes as research found half of women (49%) feel unsafe when walking alone after dark in a busy public place or quiet street. The partnership offers another option for Fuller’s team members to access a safe way to travel home or connect to public transport networks, particularly after finishing late shifts. It also aims to provide an additional extra affordable travel option, as well as an opportunity to get more people cycling. Dawn Browne, people and talent director at Fuller’s, said: “It’s our people that make the difference and this partnership with Lime is just another way for us to help make it safer for our team members to get home. It’s a great fit for us – it helps our teams financially too and we know a number of our team members are already using bikes for hire as a method of commuting.” Fuller’s and Lime’s partnership was made possible following an introduction by the Women’s Night Safety Charter – a charter designed to make London a city where all women feel confident and welcome at night – of which both companies are signatories.

Birmingham DJ duo open independent cocktail bar: Birmingham DJs Danny Kane and Paulos Barron have opened an independent cocktail bar in the city’s Jewellery Quarter. No.21 has opened in Frederick Street, serving “elegant cocktails against a soundtrack of bespoke live music and guest DJs”. Kane and Barron first met in 2008 when Kane was running the Bushwackers club in Birmingham, where Barron, also known as DJ OneFour, was the main resident DJ for five years. Kane said: “We’re thrilled to have the opportunity to open a new cocktail bar, in what is already a neighbourhood filled with fantastic independent bars and restaurants. We have so much experience and contacts from our time working in the music industry, and we know what works.” In the spring, No.21 will also expand into offering breakfast, brunch and lunch from Monday to Saturday, and roast platters on Sundays. Barron added: “It’s an exciting time for Birmingham. We can’t wait to add to what is already a fantastic independent bar scene with the opening of No.21.”

Chilled Pubs secures deal for food preparation unit to support growth plans: Chilled Pubs, the award-wining group of Derbyshire pubs that was founded by Richard and Loren Pope, has secured a deal for a food preparation unit. The six-strong operator has taken the lease on a 5,163 square-foot unit in Walton-on-Trent to facilitate its growth plans. Chilled Pubs will use the modern food grade unit at Oaklands farm for storage, food preparation and brewing purposes. Travis Toyne, commercial director at Chilled Pubs, said: “We chose this location as it is central to our current pubs and was only one mile from our previous smaller unit where the central team used to operate from. We needed somewhere that ticked the boxes for the company, but also our team who already worked in our central kitchen. We chose this unit as it gives us gives us consistency across our pubs, offers great growth opportunities, and the biggest opportunity for us is to be able to utilise the location of being on a dairy farm and explore the possibility of making Jersey milk gelato, having our own milk, and making our own butter.” Rushton Hickman acted on the deal.

Inn Hospitality Group directors acquire Newcastle brewery out of administration: Olly Bennett and Matt Daniels, directors of fledgling north east pub group Inn Hospitality Group, have acquired Newcastle independent brewery Tyne Bank out of administration. Tyne Bank collapsed earlier this year, having reportedly run in to difficulties brought on by the pandemic. Now Bennett and Daniels have acquired the business via a separate company called Project Barrel. The move will bring an end of the taproom opening at the brewery’s Walker Road site. Bennett told Business Live he had been approached by administrators to take over the company, which is based in a 13,000 square-foot former pottery warehouse in Byker. Bennett said the scale of the venue meant dedicated events were needed to make it worthwhile opening. Five full-time staff and about five other part-time workers will remain in post following the deal, which will see Tyne Bank retain its name. The new owners are now looking to recruit a head brewer in order to develop new beer ranges, and to complement existing staff. Tyne Bank had previously raised more than £200,000 in investment via Crowdcube. Bennett said Project Barrel was still in the process of starting communication with customers and suppliers, having set up the company last week and it was “starting from scratch”. However, he plans to contact smaller investors, who he said were also valued customers of the brewery and would welcome their involvement in the new business. The new owners said they will honour bookings over the Christmas period.

Tinto Tapas team launches new bar and restaurant concept: The team behind the Tinto Tapas restaurant concept in Scotland has launched a new bar and restaurant venture. Skip’s Seafood Bar and Grill has opened in Battlefield Road, Glasgow. The name of the new venue is a nod to owner Gordon Craig, who is known affectionately by his friends and family as Skip. Candy Craig, Gordon’s daughter and the operations manager of Skip’s, told the Glasgow Times the nickname has been with her dad since he was a young boy. She said: “His dad was in hospitality as well and used to work in restaurants for many years. A group of Americans had come into the restaurant and my grandad was serving them, and they had given him a skipper’s cap. He gave it to my dad when he was about four or five and called him Skip. The name just stuck.” The menu at Skip’s is seasonally based with a focus on steak and seafood. The team hopes to open more around Scotland in the future and work has already started on a second Skip’s site, in Largs. Tinto Tapas operates five sites in Scotland.

Oxfordshire bakery acquires Cotswold site for ninth tea room: Oxfordshire bakery Huffkins Bakery & Café Tea Rooms has acquired a former Cotswold pantry for its ninth tea room. The company, owned by the Taee family from Chipping Norton, has taken over Charlotte's Pantry, which has been run at 18-19 High Street, Moreton, by the Peel family for the last eight years. It becomes Huffkins’ ninth tea room, adding to those in Burford, Cheltenham (two), Kingston upon Thames, London’s Oxford Street, Stow on the Wold, Stratford upon Avon and Witney. The company also has its own craft bakery in Oxfordshire, where all of the products are made by hand. Joshua Taee, managing director at Huffkins, told the Cotswold Journal: “Huffkins was founded more than 130 years ago in the nearby market town of Burford, so we understand the importance of looking after our local residents as well as our visitors. We are proud to be investing in Moreton and we are excited to serve our local community.” Chris Peel, of Charlotte’s Pantry, added: “We’re delighted to be passing the torch to another local family and much-loved Cotswold brand. It’s reassuring to know our loyal staff will remain and be a friendly face for our regular customers, who we’re sure will welcome Huffkins with open arms.”

Story of the Day:

Industry News:

Company News: