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Thu 8th Mar 2012 - Spirit Special Report and Diary

Story of the Day:

Flaming Grill transforms wet-led pubs: Spirit Pub Company’s Flaming Grill brand is saving a number of wet-led pubs that might not otherwise have had a future, chief executive Mike Tye has told Morning Briefing. Spirit has expanded the number of Flaming Grill sites from five to 75 in the past year. Average sales growth is 37 per cent up in like-for-like terms with sites seeing food mix increase from 25 per cent to 50 per cent of turnover post conversion. Mike Tye said that a number of Flaming Grill conversions involved community pubs that might “not have been successful over time” if they had continued to rely on drink sales. The eventual target for Flaming Grill is 100 pubs but that “may go up”. Spirit, which runs 800 managed and 550 leased pubs, is eyeing an eventual target of running 1,200 managed pubs. It is just under three-quarters of the way through an investment programme for its managed estate. It is expecting to complete the final 200 investments next year. Tye told Morning Briefing: “As long as we keep our focus on delivering superior performance, the business will grow over time – it’s just a question of how much and by what method. The growth point is not top of our agenda right now – we are focused on getting every ounce of performance out of our existing business. But there will come a point, as we continue to deliver, the business will have the cash to expand.” Spirit would, however, take a pragmatic approach to using its spare cash right now – the company has bought two freehold pubs in recent months where it saw an opportunity. One of these is expected to become a Chef & Brewer. The Burton-based business has also nearly completed a review of the 550 venues in its leased estate, which is now overseen by former Greene King executive Chris Welham. “We have a high quality leased estate and the first thing to do is get the best possible performance out of it.” Spirit has placed 50 underperforming sites on the market and “sold a decent number”. Tye indicated that it’s likely a few more would be sold from its tail to improve average performance.

Other Spirit Pub Company news:

Chef & Brewer: Spirit has refurbished its entire estate of 135 Chef & Brewers. The company has a target of 200 Chef & Brewers eventually. “Chef & Brewer can definitely grow – there’s no reason why the brand can’t get to 200 sites,” said Tye. Spirit has launched full social media support for the brand, with a new website. It is also focused on growing coffee takeaway sales at Chef & Brewer. “Coffee sales are generally growing well in terms of revenue and volumes,” he added.

Fayre & Square: The value-brand is now at 120 sites, with a target of 250 eventually. Fayre & Square’s ‘no quibble guarantee’ and ‘every day square deals’ with many main courses being part of the 2 for £10 offer, is proving extremely popular. It has also introduced a range of dishes ‘under 600 Calories’. The investment in this young brand has been recognised by the industry as it has reached the finals for Best Pub Brand at the Publican Awards 2012.

The Original Pub Company: Spirit now has 23 sites. Its tagline is: “The place to meet noon and night.” Located in secondary town and city centre locations, these venues open for breakfast and have a modern, light and airy environment. They’re female-friendly with an open plan design and booth seating. A new menu featuring a number of innovative items will be launched in five weeks’ time. Tye said the brand is described internally as a ‘town pub where there’s always something going on’. “It’s a classic day trader with slightly more drink than food sales,” said Tye.

Leased to managed conversions: Spirit has completed seven conversions to date. “We’re learning as we go – and so far the results are encouraging,” said Tye. “The biggest challenge is that a major investment to increase the physical size of a pub or to change its trading style means that the local market can be a little slow to understand the extent of the transformation.”

Closed pubs: Spirit has 50 closed sites, invariably where leases have reverted to the company after other companies have gone into administration. But the development of Spirit’s brand portfolio is giving it options to “make a dent on the 50 closed pubs”. The company has just re-opened the Bear & Dragon in Tilehurst near Reading as a Flaming Grill venue called The Water Tower after a £500,000 investment – it had previously been boarded up for three years. “It actually reverted to Spirit some time ago and we felt it couldn’t be traded,” said Tye.

Morning Briefing Diary:

Meat and drink: There’s no pleasing some folk. Greene King wants to turn a pub in Hampshire, the Fox, into a franchised Meat and Eat venue. Fair enough you’d have thought. But locals have taken a funny turn with 600 signing a petition against the move claiming they don’t want food served at their favourite watering hole. One unnamed local says: “This pub may be boil on the backside of Greene King but it is our boil.”

Property rights and wrongs: Last week’s settlement of the legal action between JD Wetherspoon and Peachy Investments and its beneficiary Paul Ferrari over pub freeholds fraudulently diverted by the company’s former agent Van de Berg saw one unusual outcome. In settlement of the case a property worth £500,000 was transferred to the ownership of JD Wetherspoon. Not a pub, as you might expect, though. It is in fact a property just off the market place in Sleaford, Lincolnshire that Wetherspoon had been looking at for a pub. The plan was stymied by planning. Founder Tim Martin tells Morning Briefing that by the time Wetherspoon turned its attention to another pub in Sleaford poor old Peachy was stuck with a freehold the managed operator no longer wanted to occupy. Such is life, eh?

Perfectly good job goes begging: The list of people who seemed to have turned down the top job at Mitchells & Butlers (M&B) seems to grow longer by the day. M&B executive chairman Bob Ivell has been at pains to stress that only one of Novus’s Steve Richard, Spirit’s Mike Tye and Fuller’s Simon Emeny have been approached after the Financial Times put all three in the “thanks but no thanks frame”. Largely overlooked has been an interview that former Malmaison chief executive Robert Cook gave City AM a while back in which he also hints that he may have passed on the job. He reports that M&B offered him a “senior role” after he stepped own last September. Cook, who is now chief executive of De Vere Group, said: “I was amenable to the (M&B) discussions. But, let’s face it, I’m an hotelier so I thought, ‘Let’s stick to that’.”

McDonald’s offers McPain in France: The one thing we do know about the French is that they’re creatures of habit. And so, mighty McDonald’s has decided to swim with the tide of a French national obsession: bread. The burger chain is to introduce a McBaguette on a six-week trial - a burger topped with French-made Emmental cheese and mustard. The country’s Bread Observatory organisation, which studies and promotes bread (we kid you not), reports that the French each consume about 150 grams a day – many people eat it with most meals and see bread as an extension of the knife and fork in pushing food around the plate.

Don’t forget your old man: In the rush to capture groovy, tech-savvy customers, is it possible others are being over-looked? Step forward, Amber Taverns 75-year-old chairman Clive Preston who makes no bones about his company’s focus on the neglected “grumpy old man” market. He tells the Financial Times: “We’re not interested in the idyllic village location thing – we buy where there’s lots of chimney pots and lots of footfall and, because of our scale, offer competitively priced drinks. A lot of men don’t want to drink in a restaurant or with children running around.” Too right, Clive.

Here comes The Sun: How does the industry campaign to reduce VAT to 5% from 20% look from a tabloid perspective? We found out on Sunday when The Sun, making only its second outing on the Sabbath, covered the campaign. The leader of the campaign, veteran VAT reduction campaigner Jacques Borel, was described as a “French tax revolutionary” who has “declared war on the Chancellor” to save Britain’s pubs. Aside from the florid, even ridiculous language, the point seemed to register with a quote from Monsieur Borel at the end of the piece: “Britain needs jobs.”

Indigo wins the battle of West Street: Morning Briefing treated itself to a retail tour of Brighton’s West Street on Saturday afternoon to see which venue was winning the Battle of Live Football. The mini-tour found Irish pub Molly Malone’s, opened five or six months ago by local multiple Indigo Pub Company, had the biggest crowd watching the Arsenal versus Liverpool game, with Wahoo, Cavendish Bars’ venue occupying the former Walkabout, a very close second. Well done to Indigo on ‘craicing’ West Street.

Standards go down the toilet: It pays to listen to your customers, especially when it happens to be the local mayor. Ilfacombe’s top dignitary Coun Rod Donovan has taken a swipe at Enterprise Inns, criticising the state of the toilet facilities at the tenanted pub company’s sites in the town. He says: “Some of the toilet facilities in these establishments must date back to the 1950s and although I enjoy a drink in these pubs, it is with some trepidation that I would direct a visitor to the toilet. Enterprise Inns must bring the basic toilet and kitchen facilities up to a modern and hygienic standard before offering a lease to a prospective tenant.” They’ll be calling him Dyno-Rod in Ilfracombe. Apologies.

Thomas about to drop a bomb: Morning Briefing caught up with old chum and former Luminar driving force Stephen Thomas this week. As might be expected, the veteran shape-thrower couldn’t resist the lure of the dance floor for too long and has no fewer than 20 sites parked with his legal team. But we don’t have long to wait for The Big One – Thomas reports he’s three weeks away from his first Wonderworld site opening. He’s guarded on the exact location but it’s a large capacity nightclub which will double as a theatre pre-11pm. “I think I’ve got it sorted early doors,” he says, referring to the age-old problem of how to get punters into a nightclub before the pubs chuck out.

Bye, bye Babcock: The unexpected early departure of former BII chief executive Neil Robertson from Babcock International, the firm he joined at the start of the year, has left some wondering whether he might return to his former perch at the BII. Sources close to Robertson dismiss the suggestion on the basis that it’s always a mistake to return to old stomping grounds.

The 100-year shift behind the bar: Morning Briefing salutes Roger and Linda Newton of the Blue Ball Inn in Sidford, just outside Sidmouth, now owned by Punch Taverns. The Newton family has just chalked up 100 years running the pub – Roger and Linda themselves have done a 43-year stint. Interestingly, Roger pays tribute to veteran entrepreneur Michael Cannon, who owned the freehold in the 1980s, for having the most profound influence on him. “I learnt a lot from Michael Cannon – he shook me up. He had very new ideas of what the pub should be and he was a breath of fresh air,” he told Morning Briefing.

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