Propel Newsletter Archive Page

Tortilla reports “strong” Q4, delays rebranding of French acquisition: Fast-casual Mexican restaurant brand Tortilla has reported a “strong” Q4 with like-for-like sales up “at least” 4%. The company said that revenue for its UK business is forecast to exceed previous guidance with a range of £64.0-£64.3m now expected. It said: “This follows the continuation of the strong sales recovery for the UK business which has further accelerated following the successful execution of the ‘Vital 5’ strategic plan at the beginning of April 2024. The UK like-for-like in-store sales performance continues the strong recovery, from a decline of (4.2%) in Q1 and (2.7%) in Q2 to a position of growth in Q3 of +0.6% followed by a strong Q4 of at least +4%. Encouragingly for Tortilla, the CGA Coffer benchmark in those same periods got progressively worse – from +2.2% in Q1 to +0.6% for Q3.” It said that group FY24 trading is in line with management expectations, while adjusted net debt at FY24 period end is expected to be £7.3m. Earlier this year, the company acquired the 32-strong Fresh Burritos business in France. The company said: “The management team for France is now fully recruited and the central kitchen in Lille is almost fully built and will be operational from January 2025. We have chosen to delay the conversion to rebrand the restaurants whilst we have been working through a brand and interior design refresh initiative, which will aid not only France but also ultimately the UK. Whilst the phasing of the delivery of our French strategy will impact our French profitability in 2025, with a new much improved brand proposition we feel more confident of achieving our longer-term goals in this market.” Chief executive Andy Naylor said: “We are delighted to report that we have gained further momentum in the UK, with a strong Q4 sales performance. We have had an incredibly busy eight months, working on numerous initiatives which form part of our Vital 5 strategy: we have overhauled our food offer, recruited a new food director, successfully landed our first limited time offers in many years, purchased new equipment enabling us to sell better quesadillas all day, launched a new loyalty system, implemented self-ordering kiosks across 11 additional restaurants and transformed the internal culture to focus on career development. We will also further expand our partnership with SSP with openings of Tortilla units in both Stansted airport and Liverpool Street train station in the coming weeks. We completed the acquisition of our largest European competitor, Fresh Burritos, in July 2024. Since acquisition, we have successfully built the central team to run this business and have nearly completed our building works in our central kitchen in Lille to get this facility operational from January 2025. Our decision to revise the timing of the store rebranding, whilst causing a short-term profit impact in FY25, is, we believe, the right long-time decision to ensure the success of the acquisition. We have confidence in the long-term project underway in France, which should also provide a base for further expansion in Europe in due course. We are pleased with our achievements this year and I want to thank all the team for all their hard work, enthusiasm and drive which has helped us deliver some significant goals. I look forward to working with the team to deliver further positive achievements in FY25, building on our Vital 5 strategy initiatives.”

Premium Club members to receive two updated databases this week: Premium Club members will receive two updated databases this week. The latest Propel UK Food & Beverage Franchisor Database will be sent to subscribers tomorrow (Wednesday, 11 December), at 12pm. The database will feature 50 new additions, plus updates to existing entries. It now has 330 entries and more than 178,000 words of copy. Among the new entries are Cheat Daze, Marlowe’s, Chocoberry, Churros Locos, Pasta Evangelists, Pizza Rebel, Insomnia Coffee, HeyBoba, Cactus Jacks, 12th Street Burgers, Rico Burrito & Jimmy’s Burgers, Udderlicious, Side Street Burgers, Project Bun, Popeyes and The Souvlaki. The latest Propel Turnover & Profits Blue Book will then be sent to subscribers on Friday (13 December), at 12pm. The database will feature 30 new companies, for a total number of 1,039, with 65 accounts updated. Of these, a total of 650 are in profit and 389 are making a loss. Premium Club members also receive access to four other databases: the New Openings Database, the Multi-Site Database, the UK Food and Beverage Franchisee Database and the Who’s Who of UK Hospitality. All Premium Clubs members will be offered a 20% discount on tickets to Propel paid-for events including Restaurant Marketer and Innovator (two days in January 2025) and Excellence in Pub Retail (May 2025). Operators that are Premium Club members are also able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or supplier. Email kai.kirkman@propelinfo.com today to sign up.

D&D to close remaining Leeds site: The Angelica and Crafthouse site, which opened on the rooftop of the Trinity Leeds scheme in 2013, it to close its doors on 15 December due to “economic challenges”, according to D&D London. The company, which has restaurants in London, Manchester, Birmingham, Paris and New York, closed two of its other premises at Leeds Victoria Gate last year. A spokesperson for Trinity Leeds said the impact of the restaurant on the city’s dining scene “would continue for some time to come”. David Loewi, chief executive of D&D London, told BBC News that the decision to close the restaurant had been made “after thorough deliberation”. It had followed “a comprehensive review of business operations”, he said. “This decision follows and reflects the ongoing economic challenges facing the hospitality industry, with the long-term success and sustainability of D&D London in mind.” When Angelica and Crafthouse opened in Leeds, it was the firm’s first venue outside the capital. A spokesperson for Trinity Leeds said: “We’re sad to see Angelica and Crafthouse go after so many years at Trinity Leeds. Taking up such an iconic location at the top of Trinity Leeds, in the heart of the city centre, it’s perhaps no surprise that there’s been interest from brands keen to invest in the space, so we look forward to announcing what’s coming next in the new year.” Last October, Calveton, the backer of Byron, and Breal Capital, completed a deal to acquire D&D London, which owns and operates circa 35 restaurants across the UK and internationally.

Small businesses upbeat over prospects for new year: Most of Britain’s small and medium-sized businesses are confident of growing next year, despite lingering economic and geopolitical uncertainty and the after-effects of the budget. The Times reports a survey of 1,500 private business owners by the Big Four accounting firm KPMG found that 92% were confident about the outlook for their companies over the coming year. In a separate poll of decision-makers at about 500 smaller businesses by the insurer Aviva, 89% agreed they were confident heading into 2025. KPMG, which surveyed companies in sectors including technology, finance, manufacturing and retail, said that businesses’ optimism arose mostly from an expectation of increased demand for their goods and services. Most also had a “positive longer-term outlook for growth”, KPMG said, and 85% of Aviva’s respondents expected to be doing more business in five years’ time than they were now. Much of that optimism was centred on the planned development of new services and products and moving into new markets, especially in Europe and North America. Euan West, head of KPMG’s private enterprise practice in the UK and Europe, said: “2024 has been a turbulent year, so it’s encouraging to see that private businesses are showing resilience and casting a very positive outlook for growth and investment in 2025 and beyond.” He warned, however, that next year would still probably be “another tough year” for most businesses. Just over a third of respondents expected that the increases to national insurance contributions and the national minimum wage announced in the budget in October would crimp their profitability. More broadly, “cost pressures” was the most common response when bosses were asked what might derail their progress. To get around that, the majority were planning to invest in technology to improve efficiency. Manufacturers, hospitality and leisure groups and financial services companies were particularly concerned about a shortage of workers.

Hiring slowdown fears as firms ‘paralysed’ by budget: Businesses have been “paralysed” by Rachel Reeves’s budget, with experts warning of a slowdown in hiring akin to the one after the covid-19 pandemic. An index of hiring intentions compiled by ManpowerGroup, a recruiter, stalled at 28% over the past three months. The index was based on a survey of more than 2,000 businesses’ hiring plans. This week, the Recruitment and Employment Confederation and KPMG said that vacancies had tumbled at their fastest pace since August 2020. Michael Stull, managing director at ManpowerGroup UK, told The Times: “Businesses have been paralysed by the…budget announcement, just as they were post-covid. There is a strong appetite to grow but the new government’s actions have thrown the labour market into yet another period of uncertainty.” The chancellor outlined £40bn of tax increases in the budget on 30 October, including lifting employers’ national insurance contributions to 15% from 13.8% from April. Since the announcement, business confidence has tumbled and economists have speculated that the NICs increase could depress employment and stimulate UK inflation. Separately, research at Indeed, a job search site, said vacancies fell by 24% over the past year, with roles contracting in nearly every sector.