Exclusive: Grand Union signs for 7,000 sq ft site

Grand Union, the fast-growing London-based multi-site operator, has signed to open its biggest site yet.

The company is to open Grand Union Paddington, which will fill a 7,000 sq ft retail shell next to the Marks & Spencers headquarters in London.

Grand Union thinks food will accont for 60% of turnover — the estate average at the moment is 20%.

The site is a 25-year private leasehold on which Grand Union has negotiated a "massive" reverse premium and an 80% rent reduction for the first two years.

Co-founder Adam Marshall said: "The landlord really wants Grand Union there. It's the strength of our covenant, and that gives us a lot of pride.

"It's a test for us, though. It's a big deal. Overcoming the building regulations and licensing issues has been the biggest pain. Other operators had given up on it."

Last year, Grand Union appeared in the Sunday Times Fast Track 100, in at 52 after opening five of its 10 pubs during 2009 before adding Wandsworth last year, recording a 22% year-on-year increase in revenue.

Turnover has hit £9 million a year, and EBITDA is just short of £1m. There is a target of 20 pubs in London by the end of 2012.