Salt Bae’s Nusr-Et London posts turnover of £7m from just over three months of trading
McDonald’s is planning to reopen its restaurants in Ukraine over the next few months, despite there being no end in sight to the country’s conflict with Russia.
The company closed all its restaurants in Ukraine and Russia in March, with McDonald’s selling most of its restaurants in Russia to one of its local licensees, Alexander Govor, in May.
“After extensive consultation and discussion with Ukrainian officials, suppliers and security specialists, and in consideration of our employees’ request to return to work, we have decided to institute a phased plan to reopen some restaurants in Kyiv and western Ukraine,” said Paul Pomroy, McDonald’s head of international operated markets in a message to employees.
The company also said it was working with suppliers to get products to its restaurants and bringing employees back on site with enhanced safety protocols. McDonald’s had 109 restaurants in Ukraine but did not specify how many it planned to reopen.
To read the rest of this story and the whole of our latest Morning Briefing, CLICK HERE
Fledgling delivery business Foodstuff is nearing the £1m mark in its crowdfunding campaign, which it hopes will help it expand into four more major UK cities, including London. The business, which was founded by Toby Savill and James Perry, has delivered 70,000-plus orders across four major UK cities since its launch in Cambridge in May 2020. It had set a target of raising £900,000, with an offer of 9.1% of equity in the business, which gave it a pre-money valuation of £9,905,441. It is currently overfunding with 21 days left and has raised £991,918 from 264 investors. The company, which is chaired by Draft House founder Charlie McVeigh, says it is on “a mission to redefine the industry, focusing on quality food from indie restaurants aiming to deliver with fewer emissions”. It said that 40,000 customers have spent more than £1.7m on the platform to date. The company said: “We charge partners a £50 monthly fee, alongside a 15% commission for exclusive partners, or 25% if they’re multi-platform, keeping money in the pockets of restaurants and local communities. With 63% of consumers actively choosing local, 1,700 indie restaurants added to the delivery market since 2019 and a ratio of 4:1 versus chains, we believe that we’re perfectly placed to take our bite of a UK delivery market expected to reach £13bn in 2022, that has no plans to slow down.” Earlier this year, Foodstuff raised £1.1m in new funding in a round led by Base Investments UK, to accelerate the expansion of its food delivery business, and at the same time, appointed McVeigh as its non-executive chairman.
US brand Chipotle is set to open a further site in the UK after being granted planning permission to open a site in West Hampstead, Propel has learned. The company, which recently opened its first regional site in the UK, in Watford, taking its estate to 12 sites here, has been given the green light to include a takeaway hatch on a proposed site in the former Barclay’s bank unit at the corner of West End Lane and Fawley Road. Speaking last month, Brian Niccol, chief executive of Chipotle, said results from the company’s latest five openings in the UK had been “strong”, and it was “gaining confidence that Europe could be another layer to our growth story in the future”. Propel understands Chipotle’s immediate expansion plans continue to be focused on opportunities within the M25.
The Sky Bar, the circa 25,000 square-foot venue which is part of the iconic Trocadero building in London’s Piccadilly, has been brought to the market, Propel has learned. Located on the 12th and 13th floors, the newly developed space includes a circa 5,500 square-foot outside terrace which has 360˚ views across every major London landmark. Its existing license is up to 3am and it has a capacity for 1,000. The entrance to the new venue will be via a demised ground floor unit on Rupert Street, which is home to the likes of The Palomar, The Blue Posts, Hovarda and Speedboat Bar by JKS Restaurants. Propel understands that P-Three, the property advisory firm, is overseeing the leasing of the space.
Steven Kenee (pictured) is to leave his role as chief investment officer at Oakman Group, the Dermot King-led pub-restaurant operator. Kenee joined Oakman, which runs 35 rural and suburban pubs, three years ago having invested in the business during his time at Downing. Oakman founder and executive chairman, Peter Borg-Neal, said: “During his three years with Oakman, Steve made a huge contribution to our business. Among his many achievements was helping us to navigate through the shock waves of lockdown – delivering a successful equity fund raise and securing a Coronavirus Business Interruption Loan. Latterly, he also successfully negotiated our near £30m secured debt with Cynergy, delivered our first ever FCA regulated retail raise and managed the process of Oakman Group becoming a plc.” Kenee added: “I am immensely proud of my time at Oakman. It is a business that I have always held in very high regard. I have learnt a lot from working with the team over the past three years and I wish them all the very best for the future.” Last month, it was reported that Oakman was hunting for a cash injection as it feels the pinch from rising costs. The Sunday Times reported that Oakman is working with advisers from Forster Chase to explore refinancing options in a mission to refurbish a string of new pubs. Propel understands that BGF, the former backer of Coaching Inn Group, which earlier this year invested in Arc Inspirations, had previously been in talks with Oakman regarding an investment. In a trading update last month, Oakman said it had slowed its opening programme as inflation threatened profits. It reported £65.1m of sales in the year to 4 July, up 55.4% on pre-pandemic levels. Oakman raised more than £4m from hundreds of customers in 2021, selling shares in the business to backers. Last year, it raised £14.2m of new equity, including £8.3m of shareholder loans that were converted to equity. King said Oakman was “exploring options to refinance” in a bid to raise funds to refurbish new sites.
Döner Shack, the fast casual kebab concept, will open its first London flagship site in late autumn, in Marylebone. The company will take on the former GBK site in Baker Street, which it said would be the first of four new openings planned for the capital over the next six months. Spread across two floors, the 3,000 square-foot Baker Street site will have seating for 40 people inside and eight people outside. It will join existing Döner Shack sites in Leeds, Manchester and Leicester, while a site is also planned in Glasgow’s Silverburn scheme. With a 15-year lease on the London property, the brand said it is now developing its first innovation store, with state-of-the-art robotic kebab cutters in its kitchens to help reduce food preparation time and food waste. The company said: “As the first Döner Shack location with a basement kitchen, customers will be able to see their food being prepared live via screens within the ground-floor restaurant and a custom-designed travelling belt to transport the food from the lower ground to the upper level to ensure the freshest of deliveries.” Sanjeev Sanghera, co-founder and managing director of Döner Shack, added: “We are so thrilled to announce the location of our new store in such a well-known street in London. Our brand has done brilliantly in the other cities across the UK and, with our dynamic concept which is unique in its menu and store design, I’m confident that this will be replicated here in Baker Street. The liveliness of the surrounding area matches our brand’s ethos perfectly.”
Clean Kitchen Club, the fledgling plant-based, fast-food concept, has said it is seeking to be the “plant-based McDonald’s” as its crowdfunding raise nears its £2.1m target. The company has so far raised £2,072,375 from 103 investors, 98% of its £2,100,008 target. It is offering 14.9% of equity in the business, which has a £12m pre-money valuation. Propel revealed last month that Steve Easterbrook, the ex-chief executive of McDonald’s, PizzaExpress and Wagamama, has invested in Clean Kitchen Club. He is listed as an advisor and investor in the business, with his current ownership (pre the latest investment round) of 1.89% of the company. Co-founder Mickey Pearce owns 37%, and Verity Bowditch, the other co-founder, 10.31%. Investors in the crowdfunding round include British property entrepreneur Harry Hyman; and Spencer Matthews, founder and chief executive of CleanCo, the low and no-alcohol drinks company. It has received an anonymous investment of just under £400,000 and an investment of circa £250,000 from MSE Advisors. Clean Kitchen Club currently has six sites in London, with plans to open two more this year, including one at the Battersea Power Station development. The company, which recently opened in Soho, plans to have 40-plus sites operating by the end of 2024, and hopes to start expanding outside the capital next year, with Manchester, Brighton, Leeds, Bristol and Birmingham among its target locations. The business has also secured £1m-worth of corporate contracts through Sky Studios and Goldman Sachs. It is projecting total sales of just over £13m for the year to the end of March 2023. It plans to launch a retail offering in early 2023, and aims to have Clean Kitchen products listed at major physical and online retailers
St Austell Brewery has made changes to its senior leadership team, to help deliver on its growth plans for the future, Propel has learned. St Austell has also completed on its first acquisition since the pandemic, the Wellington Hotel in the Cornish village of Boscastle – a step towards its ambition of expanding its estate to more than 200 pubs, inns, and hotels in the West Country. As part of the company’s new leadership team structure, Andrew Turner – who joined the company in March 2020 as managing director of beer and brands – has been promoted to the newly created role of chief operating officer. He will oversee all of St Austell Brewery’s day-to-day operations, across its beer business and pub estate. The company has also appointed Paul Harbottle as its first commercial director. His career spans more than 20 years, having held senior roles including chief operating officer and commercial director for JD Wetherspoon, and managing director of Bermondsey Pub Company and group commercial director for Ei Group. The acquisition of the Wellington Hotel takes St Austell’s estate to 175 sites. The property has 14 bedrooms, three aparthotel suites, a pub and a restaurant. Kevin Georgel, chief executive of St Austell, said: “With the significant challenges that hospitality businesses are continuing to face including high inflation, the cost-of-living crisis, fragile supply chains and labour shortages, we’ve further strengthened our leadership team to put us in the best possible position to accelerate our growth and release the full potential of our business. Since Andrew joined us in March 2020 to lead our beer and brands teams, we’ve made considerable progress in this area of the business and developed our brand portfolio to ensure it is fit for the future. With these strong foundations in place, we’re confident now is the right time to align all operations under Andrew’s leadership. We’re also thrilled to be welcoming Paul Harbottle to lead our newly formed commercial function, he will bring a wealth of knowledge and industry experience to our senior leadership team and the wider business.” Of the Wellington Hotel acquisition, Georgel added: “This is a further milestone in the strong recovery we’ve continued to make since the pandemic and supports our plans to strengthen and grow our pub estate across the south west in the months and years ahead.”
The Night Time Industries Association (NTIA) has urged the government to intervene over the issue of escalating insurance premium costs within the leisure sector, with some operators seeing increases of more than 100%. The NTIA has partnered with NDML insurance brokers to look at immediate interventions through guidance. The partnership will also lobby for a change of narrative, looking to address the current insurance premium cost crisis through a renewed government scheme, which would aim to build confidence back with leisure insurers and reduce premiums. The NTIA argued insurance was in a “hard market”, where insurers start to reduce their capacity for cover, in turn driving up premiums. This can happen for a number of reasons but is often down to an increase in frequency or severity of losses, or regulatory intervention that could make things more difficult for insurers. Michael Kill, chief executive of the NTIA, said: “Our industry has paid billions of pounds in insurance premiums to protect their businesses for many years, but during the pandemic many felt they had been let down by insurers in their moment of crisis. We are now facing a cost inflation crisis, from the effects of overseas conflict and domestic policy decisions, which have seen insurance costs in some cases double. This is not sustainable, insurance will require creative intervention from the government to grow confidence in the leisure market and reduce premium costs to an affordable level.”
Trade bodies in Scotland have called on the Scottish government not to exclude pubs from its current proposals that would see other hospitality premises, like restaurants, have greater flexibility with outdoor seating on pavements. As part of the government’s permitted development rights consultation, which closed last week, it is proposed that outdoor restaurant seating could be permitted without a planning application. Under the current proposal however, it would only apply to restaurants and other businesses currently operating as a class 3 businesses (food and drink for consumption on the premises) not pubs or bars. This is due to pubs and bars being classified differently. In their submission to the consultation, the Scottish Beer & Pub Association (SBPA), Scottish Licensed Trade Association and UKHospitality Scotland have told the Scottish government that pubs and bars can’t be forgotten about. A SPBA spokesperson said: “We saw a relaxation of planning for outdoor areas during the pandemic, which gave many premises the ability to trade through an exceptionally difficult period. We’re glad the government is now seeking to make some of those relaxations permanent, but it needs to be for the whole of hospitality.” UKHospitality Scotland executive director Leon Thompson added: “Last month, England made pavement licences permanent, providing potentially business-saving opportunities to hundreds of pubs, bars, restaurants and cafes. Scotland’s hospitality businesses should have access to at least the same generous terms.”
The British Institute of Innkeeping (BII) has written to the government, highlighting the devastating impact of the energy crisis on its members running independent pub businesses and calling for urgent, essential support. It said independent pub operators will need to trade at least 20% higher than pre-pandemic levels to just stand still, but three-in-four are still trading below 2019 levels, with 86% reporting lower profits from that already reduced revenue. In addition, many are still repaying bounce back loans and other pandemic specific debts at an average of around £40,000 per pub. Then BII also highlighted that many of its members are regularly reporting increases of 300% or more on their existing payments. It said even without the crippling inflation across all other areas, the “energy crisis alone is threatening the survival of great pub businesses that have been at the heart of their community for years”. Steve Alton, chief executive of the BII said: “We have seen a sharp rise in calls to our helplines, with members uncertain of how to navigate the challenges facing them, the majority of whom are seeing unsustainable cost increases across every area of their businesses, but rising energy bills are the top concern at the moment. Even at the height of summer, the busiest time of year for pubs, licensees are now seriously considering the sustainability of their businesses, as the astronomical rising cost of business is undermining any recovery they may have already made. The crisis now facing our members is just as damaging as the impact of the pandemic. We have called on the government for urgent short-term support to allow these vital businesses to weather these exceptional costs of doing business. They now urgently need immediate support with energy bills via grants and a cap on future increases, alongside a waiver of business rates for 2023-24 as well as a more meaningful cut to the differential rate of duty on beer applied to smaller container sizes. Alongside these measures, there need to be measures in place to stimulate consumer spending, all of which will allow them time to start their recovery.”
Deliveroo has reported that market conditions softened in Q2 compared to Q1, which it believes reflected the impact of increased consumer headwinds, with its gross transaction value (GTV) growth year-on-year 12% in Q1 and 2% in Q2. The company said that during H1 orders grew by 10% year-on-year and GTV increased by 7% to £3.55bn. GTV per order was £22.1 in H1 2022, down 3% year-on-year in constant currency compared to H1 2021, which the company said was due to the prior year benefiting from higher basket sizes during lockdowns. It said: “Sequentially, however, GTV per order has increased quarter-by-quarter since Q3 2021 to reach £22.6 in Q2 2022, driven by factors including item price inflation.” In UK& Ireland, the company said that GTV grew to £1.91bn in H1 2022, an increase of 8%. However, GTV growth in constant currency slowed from 12% in Q1 2022 to 4% in Q2 2022. The company said: “Third-party data shows that the business continues to gain share in UKI even as the overall market has been impacted by increased consumer headwinds during the period. In H1 2022, orders grew by 12% year-on-year to 80.1 million. GTV per order was down 4% year-on-year in constant currency to £23.9 due to the prior year benefiting from higher basket sizes during lockdowns; sequentially, GTV per order has increased for four consecutive quarters. During the period, Deliveroo continued to add differentiated content for consumers. UKI restaurant selection was further expanded by c.5,000 sites in H1 2022, increasing the base of restaurants by 9%. In May, Deliveroo announced that McDonald’s would become available on the Deliveroo platform in the UK, further enhancing the selection available to consumers; the roll-out began in June and has since scaled rapidly.” In H1 2022, the company said that revenue increased by 12% to £1.01bn, exceeding the increase in GTV of 7%, mainly due to growth in commission revenue and consumer fees, as well as an increased contribution from advertising as this revenue stream begins to scale. Adjusted Ebitda was (£67.9m), an increased loss compared to (£25.8m) in H1 2021. Operating loss in H1 2022 was £157.8m, compared to £97.6m in H1 2021. It posted a loss before tax of £147m in H1 2022 compared to £95m in H1 2021. The company also announced it was commencing a consultation on the proposal to end its operations in the Netherlands, reflecting the its “disciplined approach to capital allocation”. Will Shu, founder and chief executive of Deliveroo, said: “Deliveroo is committed to delivering profitable growth. We are focused on driving the business to the milestone of adjusted Ebitda profitability and then on to positive free cash flow generation. In March we set out our path to profitability and the levers to deliver this. So far in 2022, we have made good progress delivering on our profitability plan, despite increased consumer headwinds and slowing growth during the period. We are confident that in H2 2022 and beyond we will see further gains from actions already taken, as well as benefits from new initiatives. We remain confident in our ability to adapt financially to any further changes in the macroeconomic environment. We continue to be excited about the opportunity ahead and our ability to capitalise on it.” At the same time, the business announced that Lord Simon Wolfson has decided to step down from its board. Lord Wolfson said: “After much consideration, and with regret, I believe that the time required to continue in my role at Deliveroo is no longer compatible with my executive and other commitments. I have enjoyed my time working with Will, the executive team and my board colleagues over the past 18 months and wish the company all the best for the future.”
FiLLi, the fastest growing chai and Indian street food business in the United Arab Emirates, is set to unveil its first UK outlet in London this month. Taking its network to more than 40 fast casual stores across eight countries – FiLLi UK will open a 2,000 square-foot store in Harewood Avenue, Marylebone. The business is already in negotiation on stores in Luton, Leicester and Manchester and the plan is to open up to ten new UK stores over the next two years with select franchise opportunities available. FiLLi was founded in 2004 and the new London store – catering for eat-in, grab and go, delivery and collection – will feature its signature Zafran Chai and an all-day menu encompassing everything from classic paratha and kathi rolls to samosas, bun kebabs, wraps, burgers and masala fries as well as a breakfast range including a variety of omelettes and egg bhurji. FiLLi has developed a series of franchise formats – designed for high street, shopping centre, business parks and event locations – ranging from 500 square-foot kiosks up to 2000 square-foot stores, catering for up to 80 customers indoors with additional outdoor seating. The FiLLi trademark is now registered in 48 countries in addition to the Gulf locations. “In Dubai and the UAE, we see long dwell times in our stores and so we always look to make our environments comfortable, relaxed and easy-going through the day,” said UK head of franchise, Peter Davies. “As for our chai – people simply adore it. Too many start-up tea businesses in the UK have pitched a premiumised and often inaccessible tea offer. We think the UK market is ready for the best chai going.”
Bone Daddies Group – which comprises the eponymous ramen restaurants, Shack-Fuyu and Flesh & Buns – secured two new loan facilities earlier this summer, with one set to be used to fund new store capital expenditure. In accounts filed at Companies House, the company reported turnover for the year to 30 September 2021 of £10,993,919 (2020: £11,703,075), with Ebitda of £319,343 (2020: £539,728), and a pre-tax loss of £528,378 (2020: loss of £406,606). During the year, the company entered into a new Coronavirus Business Interruption Loan Scheme (CBILS) agreement for £1.85m with HSBC with an annual interest of 3.99% over base rate. The balance at the year end was £1,806,225. Post year end, in June 2022, the HSBC CBILS facility was replaced by two Investec loan facilities (facility A and facility B) due for repayment by 27 January 2027. Facility A was to refinance the existing HSBC CBILS, and has a facility limit of £2m and an interest rate of 4.50% above the Bank of England base rate, subject to a minimum of 4.5%. Facility B was provided to fund new store capital expenditure, with a facility limit of £2m and an interest rate of 6.00% above the Bank of England base rate, subject to a minimum of 6%. Speaking to Propel last month, Demetri Tomazos, founder and chief executive of the Bone Daddies Group, said about current trading: “We’re still here, we’re standing, and we’re amazed and thankful on a daily basis at the continued support we have from our guests during these times. It’s a tough time and it continues to be tough, as it is for everyone; I’m thankful our outstanding, resilient team is still delivering an exceptional experience and product to our guests.” The business has lined up an opening under its eponymous brand in The Sidings scheme within the old Eurostar terminal at Waterloo station. The company is also relaunching its Flesh & Buns site in High Street Kensington under its eponymous brand this month.
Renroc Retail, which acquired Bristol healthy fast food cafe chain Friska and four of its sites out of administration last summer, has ceased trading having paid only £10,000 of the £250,000 deferred consideration sum for the business. Propel reported last month Friska had closed all four sites in Bristol. A progress report on Friska from administrators Mazars, showed on 26 July 2022, Renroc Retail advised the administrators it had been “left with no alternative but to cease trading” after experiencing various complications with trading and getting new leases agreed or assigned with the respective landlords. The report stated: “£250,000 of the proceeds from the sale of the business to Renroc Retail was to be paid as deferred consideration. This sum was to be paid monthly over 24 months, commencing September 2021. The deferred consideration payable in relation to the sale to Renroc Retail is not subject to any specific conditions (ie profitability/sales, etc). Accordingly, the deferred consideration was intended to be recoverable over the 24-month period. However, to protect the position of creditors, the deferred consideration has been secured by way of a legal debenture over the business and assets of Renroc Retail. As at the reporting period end date, £10,000 has been received (in June 2022) in respect of the deferred consideration whereas £114,166.60 should have been paid by this point. As a result of Renroc Retail’s decision to cease trading, the administrators await Renroc Retail’s proposals in relation to the outstanding deferred consideration. Furthermore, the administrators are seeking legal advice from solicitors regarding the position.”
McDonald’s franchisee Aberrant Group has doubled the size of its estate with the acquisition of four drive-thru sites in the West Midlands, Propel has learned. On the back of the acquisition, the business, which was founded by David Knight in 2016 to purchase, operate and develop a group of McDonald’s restaurants, currently owns and operates eight drive-thru sites, employing more than 1,000 people with an annual turnover in excess of £45m. On the new acquisition, Knight said: “This is a proud moment for me and an exciting step on the Aberrant Group journey as it really is the first big milestone in our development and growth, doubling the size of the group and taking us into new operating markets. The real work starts here as we start the change management process to merge the leadership teams, business processes and 1,000-strong workforce together into one group, energised to run great restaurants, delight our customers and drive strong sales growth. We have had to navigate exceptional circumstances and challenges presented by the pandemic and now by the cost-of-living crisis. However, we have navigated this better than our competition, staying true to our values and being led by a strong and progressive business plan, which sees us continue to evolve as a true omnichannel business and grow market share as we are led by what our customers want and expect from us.” Last year, it opened a new drive-thru sites at junction 13 of the M6, Stafford. The double storey, 100-seat site was a new concept and the first of its kind in the UK, and included a dedicated delivery cell, automated beverage system, click and serve, and digital menu boards.
Transactions at Pret A Manger sites increased at all regional locations across the UK last week, apart from Manchester. According to the latest Office of National Statistics (ONS) update, based on the Bloomberg Pret Index, transactions in Manchester fell by seven percentage points. There were also weekly falls at London airports and London train stations where transactions fell by three percentage points and one percentage point, respectively. There were weekly increases at Pret’s London suburban sites and West End stores, where transactions climbed two percentage points and three percentage points, respectively. The ONS figures also showed UK-seated diners increased by 12 percentage points in the week to 31 July 2022 and were 131% of the level in the equivalent week of 2019. London seated diners also rose by 12 percentage points in the latest week to 4 August and were at 96% of the level in the equivalent week of 2019. This is the highest this figure has been for nine weeks (since the week to 29 May 2022). Separately, Pret has lined up its first opening in Kuwait, at the Al-Hamra Tower. The new site is scheduled to open in October, with a second site in the country set to open before the end of the year. Last November, Pret, the JAB Holdings-backed business, signed a deal with One PM Franchising, which is a subsidiary of One Franchising Holding, a regional food and beverage operator with a presence across eight countries, to open sites in the Middle East, including Kuwait.