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Wed 18th Apr 2012 - Novus, Quince Tree and City Pub Company

Story of the day:

Novus Leisure has some of the UK’s “highest turnover food businesses”: Novus Leisure, the London-focused operator led by Steve Richards, has reported it has some of the busiest food businesses in the country. The company is normally linked with wet-led, high-end bars but the company has built a very large food business in recent years. Company sales are forecast to hit £141m in the financial year ending in June with 32 per cent of turnover accounted for by food – a total of £45m in food sales. Food sales account for 50 per cent of sales at Exchange bars, 37 per cent at Lewis & Clark, 35 per cent at Tiger Tiger, and 20 per cent at Jewel bars and Landmark venues. Among the highest performers are: Tiger Tiger in Haymarket with £40,000 per week of food sales on average weekly turnover of £180,000 (food sales are worth £170,000 of £500,000 in Christmas week); its Sway venue where food sales are worth £35,000 of average weekly takings of £90,000 (food sales are worth £140,000 in Christmas week when total sales are £350,000); and its Grace site where food sales are worth £35,000 per week of £80,000 per week average sales (food sales are £160,000 with total sales worth £300,000 in Christmas week).

Propel Opinion: The amount of food sold by Novus Leisure indicates how lines are becoming blurred in the on-trade. Novus is a company very much associated with the late-night market. But the company has been developing its food trade at a gallop – and is a long way above the pub and bar sector average in terms of food trade to turnover percentages. The company’s Exchange bars, with 50 per cent food, slip into restaurant territory by the definition of market insights firm Horizons.

Industry news:

Eating out has become a habit: A report by Horizons has shown that eating out has become a habit in the UK. Despite the economic downturn 72 per cent of adults still eat out which compares well with the figure of 75.2 per cent in December 2008. Horizons stated: “This represents a real opportunity for sales growth as confidence returns – the snow in December 2010 had a greater effect than the recession.” The Horizons report also noted that consumers have become more discerning in the recession. Consumers may still be eating out but they are doing so with less frequently – eating out has dropped from 3.3 times a fortnight to 2.1 times. However, spend per meal has risen from £10.29 to £13.80. The report also found that 125 new formats emerged in the UK in the past year – roughly two a week on average. Horizons found that consumers “are hunting for deals” and that customers are being “encouraged in at different times of the day”, with breakfast leading the way. The food market insights firm also noted the increasingly competitive landscape, with a number of sectors targeting growth: more pub restaurants, more in-store restaurants, increased numbers of food offers in malls, coffee shops expanding their food offer, retailers offering dine-in deals and the home delivery market increasing its coverage. 

The American food service market benefits from “frugality fatigue”: “Frugality fatigue” is driving a rise in retail sales among consumers in the US who’ve “grown tired of putting off discretionary purchases,” said Russell Price, a senior economist at Ameriprise Financial. More generally, Americans are now predicted to eat out more frequently in the next 90 days -- and spend more while doing so -- as their financial health improves, according to a monthly survey by RBC Capital Markets in New York. The percentage of respondents who said they spent more than planned at restaurants during the past 30 days reached a record 31 per cent in February, a sign of improving consumer confidence.

Two industry magazines short-listed in awards: The Publican’s Morning Advertiser and Restaurant magazine have been short-listed in the PPA Awards for Business Magazine of 2011. The magazines had to submit three copies from 2011 to judges. Publisher of the two magazines Tim Brooke-Webb has been short-listed in the Publisher of the Year category. Results will be unveiled in June.

Higher food prices in supermarkets push up CPI: Inflation in the UK rose unexpectedly on the Consumer Prices Index (CPI) measure in March, driven in large part by higher food prices in supermarkets compared to a year ago. CPI inflation rose to 3.5 per cent in March from 3.4 per cent in February, according to the Office for National Statistics (ONS). Retail Prices Index (RPI) inflation fell slightly to 3.6 per cent from 3.7 per cent. The ONS said that food and soft drink prices were 4.6 per cent higher than in March 2011, when deep discounting took place in supermarkets. It cited higher prices for bread, cereals, meat and fruit and vegetables in particular.

LGA – minimum pricing could push drinkers towards counterfeit products: The Local Government Association (LGA) has warned that setting a minimum price for alcohol could push drinkers towards fake brands of alcohol which can contain dangerous chemicals like anti-freeze. Coun David Rogers, chairman of the Local Government Association Community Wellbeing Board, said: “National gestures like minimum pricing and banning multi-buy discounts will only go as far as deterring binge drinking and don’t take into account varying issues of town and city centres across the country. “We are concerned that targeting cheap alcohol could push people to the black market and cheaper drinks. When drinking counterfeit brands you can never be sure what you are putting into your body.”

Company news:

Spirit pays maiden dividend: Managed pub company has unveiled its first dividend – 0.65p a share. Profit before tax rose seven per cent to £20m in the 28 weeks to 3 March. Chief executive Mike Tye said: "Spirit continues to make good progress in transforming and revitalising the business. We have delivered further strong growth in managed sales and margins through continued investment in our brands, our estate and our people supported by strong cost control. The leased business has performed in line with our expectations and we have built a strong management team to drive performance improvement.”

HBSC upgrades JD Wetherspoon: Managed pub company JD Wetherspoon has been upgraded to ‘overweight’ from ‘underweight’ by HBSC, which also raised its target price to 470p from 360p. HBSC argues that with the Olympics and European Football Championships on the horizon, JD Wetherspoon looks set for a bumper summer. “We calculate over 40 per cent of JD Wetherspoon’s estate is in London and Greater London, and all pubs are equipped with television,” wrote HSBC. “The drinking nature of the pubs fits well with sporting events.” Wetherspoon shares rose 10.9p to 416p.

New chief executive for Fifteen Cornwall: Jamie Oliver’s Fifteen Cornwall restaurant has named a new chief executive - Matthew Thomson. Thomson started his catering career at the Cornwall Coliseum and has worked in a number of London restaurants. He currently sits on the Civil Society Advisory Board in the Department of Environment, Food and Rural Affairs. Last year, Cornwall Fifteen’s then chief executive Dave Meneer claimed the restaurant, which has trained more than 100 disadvantaged people since it opened in 2006, had made a £12m impact on Cornwall’s economy. He said: “Right now we have 99 staff on the books, 16 of those are apprentices, plus we employ about 80 full time staff as well and we’re turning over in excess of £3m a year.”

Dominic Walsh – Ask and PizzaExpress suffer sales declines: Dominic Walsh, leisure correspondent for The Times, has claimed anecdotal evidence suggests that the two brands operated by Gondola Group have suffered sharp declines in sales in recent weeks. Walsh, writing in the Tempus column, suggested that ASK had suffered double-digit declines while PizzaExpress had seen a high single-digit decline. 

Jack – managed pub operators well-placed: Numis Securities analyst Douglas Jack has argued that Peach Coffer Tracker trends that show managed pub operators out-performing restaurants, are likely to continue. He said: “Trading benefited from good weather, particularly in the pub/pub restaurant market, which outperformed restaurants. Aided by a strong sporting calendar, the leading managed pub operators (Fuller Smith & Turner (Add 775p), Greene King (Add 535p), Marston’s (Buy 130p), Mitchells & Butlers (Add 280p), Spirit Pub Company (Buy 80p) remain well placed to meet or exceed 2012 earnings expectations, in our opinion.”

Well-known former Tiddy Dols site in Shepherd Market set to re-open: The former Tiddy Dols restaurant site in London’s Shepherd Market is set to re-open in June. Robin Birley, son of late London nightclub and restaurant owner Mark Birley, will open a large new club, called 5 Hertford Street, on the premises. The venue was due to open in January but problems have dogged the enterprise. “It’s been a huge construction project,” Birley’s spokesman Charlie Methven told The London Evening Standard. “The building has been gutted and rebuilt and now the interior decorators are at work.” The club occupies the whole block where the Tiddy Dols restaurant once stood – the venue was one of London’s most popular tourist destinations at one stage.

Thorley Taverns re-opens Broadstairs pub: Thorley Taverns, the Kent operator run by Frank and Phil Thorley, has re-opened The Charles Dickens in Broadstairs after a £500,000 refurbishment. The venue was first operated by Frank Thorley in 1975 and was one of three Enterprise inns sites the company acquired for £3m in December last year. Back in the mid-1970s, Thorley grew the business to a 1,500 barrels-a-year site. Thorley Taverns had been looking at buying the lease on the pub but jumped at the chance to acquire the freehold. The pub has a kitchen three times the size of the original and the first-floor restaurant will have sea views - the first-floor restaurant and function area is expected to open in a matter of weeks. Thorley Taverns also bought The Tartar Frigate and The Captain Digby from Enterprise Inns in the deal.

Prezzo signs for Liverpool site: Restaurant group Prezzo has joined Starbucks and Brasserie Blanc in signing up at Neptune and Countryside’s Mann Island development on the Liverpool waterfront. Prezzo will occupy a 3,500 sq ft unit with 120 covers, facing the new Museum of Liverpool, trading in a unit next to the new Starbucks. Prezzo, formed in 2000, now has 160 restaurants in the UK.

Hybrid pub, restaurant and café opens tomorrow: A former pub will re-open tomorrow (Thursday) in Stonor, near Henley, as a restaurant, café and delicatessen as well as a traditional pub. Owner Bobby Yerburgh, from Nettlebed, has said he hopes having several businesses on the same site will make the pub model more viable. Yerburgh, the son of Lord and Lady Alvingham, has said he aims to attract women who might not enjoy the typical pub experience. He said: “Women don’t want to sit at a table sticky with beer, so we have a great number of options, be it on the dining side or the café with its lighter dishes, or the shop,” he said. The Stonor Arms closed almost eight years ago and refurbishment work has taken two years.

Belfast’s St Anne’s Square attracts two more restaurateurs: Two new restaurants have opened in the St Anne’s Square development in Belfast. The first is the 90-seater Asian restaurant House of Zen, Eddie Fung’s seventh restaurant in Northern Ireland. New to the square is Salt Bistro, owned by husband and wife team Donal and Teresa Cooper, both veterans of the hospitality business. “For the past number of years we’ve been involved in the “fine dining” sector in the south of Ireland,” Donal Cooper said. “For our St Anne’s Square restaurant we wanted to offer something of equal quality but with a more casual atmosphere and mid range pricing which should appeal to the eclectic mix of people who work and relax in the Cathedral Quarter.” Existing restaurant The Potted Hen is adding an extra 3,000 sq ft to its floor space, which will up its covers to 75 from 50.

Glasgow nightclub apologises over “booty call” leaflet: Owners of the Garage nightclub in Glasgow has made a full apology for advertising leaflets criticised as “degrading” and sexist”. The leaflet advertised Booty Call evenings at The Garage, in Sauchiehall Street. The poster featured on the club’s website but attracted a flood of complaints. One said: “The image is deliberately designed to mimic the sort of cards that advertise sex work and sex lines.”

Bruce and Watson plan Henley brew-pub start in the summer: City Pub Company bosses Clive Watson and David Bruce have told a public meeting in Henley that they will start work on a brew-pub in the town this summer. The company plans to convert Henley police station to the brew-pub, with work likely to be completed in the autumn. The interior of the 2,700 sq ft pub, which has not yet been named, will offer a mixture of traditional and contemporary styles with a seated booth in a former cell and a semi-visible kitchen. The brewery itself will create a focal point behind glass walls and it’s hoped will produce more than 2,000 pints a week. Watson and Bruce held a consultation meeting for local residents, which more than 50 people attended and provided an “overwhelmingly positive” response. One person at the meeting said he used to drink at The Goose and Firken in Southwark, part of Bruce’s Firkin chain, when he was a student in 1979. 

Mothers help evict squatters at Enterprise pub: A group of nearly 20 squatters were evicted from an Enterprise Inns pub in Bristol by the police – and their own mothers. Two parents arrived hot on the heels of officers when 18 mostly young people were found inside the Hobgoblin pub on Gloucester Road. They helped get their offspring out of the building, which has been closed since last week for refurbishment.

Hotel puts up stand-up comedian on room service: The newly opened Hotel Indigo in Edinburgh – the seventh in the UK - will provide guests the chance to book a live comedy act along with their food and drink when ordering room service this week. From tomorrow until Saturday (19 – 21 April) local award-winning Scottish comedian Janey Godley can be ordered by guests to deliver a 10-minute stand-up act in their rooms. Every Hotel Indigo draws inspiration from its local area to offer guests an individual experience. Hotel Indigo Edinburgh, in the heart of the city’s comedy district, is just along the road from ‘The Stand’ comedy club which features Fringe Festival comedians, along with the Phoenix and other pubs in nearby Broughton Street. Comedy is one of the themes brought to life in the new hotel.

Telford scheme signs seven restaurant brands: Southwater Event Group, which owns the International Centre in Telford, is a step closer to transforming the site into an entertainment and cultural quarter after seven restaurant brands signed up to its regeneration scheme. Southwater, together with Telford and Wrekin Council, is embarking on a £250m masterplan to transform the events venue and surrounding area into the commercial and residential heart of Telford. The plan is designed to provide exhibition and conference attendees with complementary facilities and attractions. The brands signed up are: Bella Italia, Chimichanga, Harvester, Nando’s, Pizza Express, Wagamama and Zizzi.

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