Propel Newsletter Archive Page

New CEO pledges to ‘get back to what makes Starbucks, Starbucks’: Brian Niccol has laid out his vision for his first 100 days as chief executive of Starbucks, promising improvements to both operations and marketing while vowing to “get back to what makes Starbucks, Starbucks”. In an open letter to Starbucks employees, customers and stakeholders after he officially took on the role, he said that the company has lost some of what has made the brand special – notably its status as a “community centre” as its shops focus more on getting large numbers of customers in and out, reports Restaurant Business Online. “Many of our customers still experience this magic every day,” Niccol wrote. “But in some places, especially in the US, we aren’t always delivering. It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic. These moments are opportunities for us to do better. Today, I’m making a commitment. We’re getting back to Starbucks.” Niccol’s hiring comes at a time when the US company is experiencing its worst year since the economic downturn of 2008, with weak sales in both the US and China. Niccol, who Starbucks lured away from Chipotle Mexican Grill, listed four key areas that will have the biggest impact in the next 100 days – empowering baristas to take care of customers; improving service in the morning; re-establishing Starbucks as the community coffeehouse; and “telling our story”. On empowering baristas, Niccol said employees need “the tools and time to craft great drinks every time” and said the company plans to make “Starbucks the best place to work, with career opportunities and a clear path to growth”. Service in the morning, meanwhile, has been a key problem as the company’s mobile ordering app creates backups inside shops or drive-thrus. “People start their day with us, and we need to meet their expectations,” Niccol said. “This means delivering outstanding drinks and food, on time, every time.” Re-establishing Starbucks as a community coffeehouse is another key goal, while Niccol is promising to elevate the in-store experience. “Our stores will be inviting places to linger, with comfortable seating, thoughtful design and a clear distinction between ‘to-go’ and ‘for-here’ service,” he said. Marketing is also an area Niccol wants to improve. “It’s time for us to tell our story again,” he said. “We won’t let others define who we are.” Niccol said the company is making investments in technology to improve the experience of employees and customers and its supply chain. He also said the company plans to evolve its mobile app and ordering plan.

Premium Club members to receive two new databases this week: Premium Club members are to receive two new databases this week. The next Propel UK Food & Beverage Franchisee Database will be sent out today (Wednesday, 11 September), at noon. The database, which is updated and published on a bi-monthly basis, has ten new entries. These include Chopstix franchisees KK Foods and Southern Creations, and Highway Shops Retail, the first partner for Fireaway Pizza’s new express format. The database now has 160 entries and more than 72,000 words of content. Premium Club members will also receive the next Turnover & Profits Blue Book on Friday (13 September), at midday. The database will feature 57 updated accounts and 21 new companies for a total of 978. Premium Club members will also receive the next Turnover & Profits Blue Bookon Friday (13 September), at midday. The database will feature 57 updated accounts and 21 new companies for a total of 978. Premium Club members also receive access to four other databases: the Multi-Site Database, the New Openings Database, the UK Food and Beverage Franchisor 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 the Talent and Training Conference (1 October), 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.

PureGym set to expand in the US: PureGym, Britain’s biggest health and fitness club operator, looks set to expand in the US after its subsidiary, Pinnacle Holdings US, entered into an asset purchase agreement (APA) with Blink Fitness, which filed for bankruptcy in August. PureGym, which operates as PureFitness in the US, currently has three gyms there as part of an overseas estate of 229 gyms (plus 387 in the UK). The APA gives PureGym ‘stalking horse bidder’ status ahead of an auction, scheduled to take place on 28 October. PureGym chief executive Humphrey Cobbold said: “PureGym is committed to ensuring continuity of service for Blink’s members in New York and New Jersey. As part of our strategic expansion into the US market, PureGym plans to invest further in these gyms to enhance the customer fitness experience. This agreement also lays the foundation for PureGym to successfully expand its footprint in the US. Should PureGym be successful in the auction, Blink Fitness’s assets will, we are confident, offer a significant step forward for our ambitions in the US, where we started operating in 2021.” Last month, PureGym reported “reliable, ongoing growth” in its second quarter boosted by further site openings. The company said revenue in the three months to 30 June 2024 increased to £151m, up from £138m the previous year, while group adjusted Ebitda stood at £41m, up from £35.8m in the same period of 2023. The group opened nine new sites in the UK in the quarter, making 20 in the first half, and a further 20-25 sites are expected to open in the second half.

West End private members’ club narrows losses, marks bicentenary year with membership drive as some fees waived: Oriental Club, the private members’ club in London’s West End, narrowed its losses in the year to 31 December 2023 and is marking its bicentenary year with a drive to increase membership, including the waiving of some fees. Pre-tax losses narrowed to £50,737 from £575,842 in 2022. Turnover increased from £5,147,913 in 2022 to £5,761,017. Among the biggest areas of revenue were £2,009,662 in subscriptions (2022: £1,888,959), £1,439,270 in bedrooms rentals (2022: £1,056,201) and £1,186,315 in catering (2022: £1,076,063). Director Michael Gould said the inflationary environment had necessitated price increases on menus and subscriptions “to maintain long-established and prudent margins”. He said bedroom rates increased marginally for the first time in four years but offer “greater relative value than ever due to the significant increases in average room rates in London hotels”. The year saw refurbishment works completed on the Smoking Rooms and Dining Room – with the latter resulting in “an overnight near-doubling of covers served for lunches and dinners most weekdays”. A total of 228 members were elected in 2023, with a net decrease of 17 overall. “A key strategic objective of the bicentenary is to increase membership, striving for a net increase at least equal to the level of membership in 2018 (the ‘high water mark’ for the current era),” Gould said. “There is therefore a range of initiatives underway to achieve this including the removal of the entrance fee for the first 200 bicentenary members elected during 2024. The bicentenary has begun well, notwithstanding the faster than expected embracing of the new food and beverage strategy, which forecast a longer period of transition. The early signs of the bicentenary year illustrate very high levels of engagement and endorsement by members and a trend towards increased candidate nominations – although the ambition is for a more material uptake. With a return to material operating surplus before depreciation in 2023, the board, committee and executive have all proved that their strategic, commercial and operational plans are credible and appropriate for the club as it entered its third century of existence.”

Gym Group reports positive summer trading and expects to deliver 5-6% lfl revenue growth in 2024, on track for opening 50 new gyms over next three years: The Gym Group has reported positive summer trading and expects to deliver 5-6% like-for-like revenue growth in 2024, and has said it is on track for its target of opening circa 50 new gyms over the next three years. It comes after the business reported a strong first half for the six months to 30 June 2024. Revenue was up 12% from £99.8m in the same period in 2023 to £112m, with group adjusted Ebitda less normalised rent up 28% from £17.2m to £22.1m. An adjusted pre-tax loss of £5.2m turned into a profit of £0.5m. The company said strong free cash flow generated in the first half, up 73% to £24.5m, funded four new sites opened in the period, enhancements to existing sites and continued technology investment. As previously reported, a new £90m three-year combined bank facility was signed in June 2024, made up of a £45m term loan and £45m revolving credit facility, with improved terms. The company said its Next Chapter growth plan, announced in March 2024, is starting to deliver progress in driving up returns in its mature gym estate through higher yield, reduced promotion and better targeted customer acquisition. It has refreshed its app to improve member retention and reported high levels of member engagement and satisfaction levels throughout the period. Following the seven new sites opened so far this year (four in the first half), the company said it is on track to open 10-12 in 2024 and has a “strong pipeline of high-quality sites to accelerate new openings in 2025, in line with our plan to open circa 50 sites over three years, funded from free cashflow”. It said trading momentum continued in July and August, and “we now expect to deliver 5-6% like-for-like revenue growth in 2024”. Chief executive Will Orr said: “Further positive trading momentum during the first half reflects the continued early benefit of executing on our Next Chapter strategy, set out in March. We have increased membership, revenue and profit and our market-leading proposition is more resonant than ever, in a growing market. We are also well on track to deliver our target of opening circa 50 new high-quality gyms over the next three years, funded from free cash flow. We have detailed plans in place for the key autumn trading period and are well set to deliver full year results at the top end of recently revised market expectations.”