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Fri 4th May 2012 - Mitchells & Butlers, the ALMR and Antic Pub Company

Story of the day:

Mitchells & Butlers joins the ALMR: The UK’s largest managed licensed retail company Mitchells & Butlers (M&B) is to join the Association of Licensed Multiple Retailers (ALMR). The company, which operates around 1,600 sites, is also understood to have resigned from the British Beer & Pub Association (BBPA) last September – members are required to give 12 months’ notice of their departure. The decision to join the ALMR follows the recruitment by the trade body of a host of high profile pub and restaurant companies, including JD Wetherspoon, Spirit Pub Company, Intertain, Amber Taverns, Stonegate Pub Company, LT Pub Management and TGI Friday’s. New arrivals within the past 12 months operate a combined 5,000 pubs and restaurants and employ more than 100,000 people. The resignation of M&B from the BBPA follows the decision of both Greene King and Spirit Pub Company to leave in recent years. Two months ago, the ALMR passed the century mark in terms of operator members. The news of Mitchells & Butlers’ defection from the BBPA to join the ALMR was revealed at yesterday’s ALMR 20th Anniversary business day, which was attended by around 300 delegates. Executive chairman Bob Ivell said that he believed M&B has to support a trade body focused on retailing issues. (See Propel Opinion by Paul Charity below: The importance of a proper voice.)

Industry news:

ALMR chief executive – the sector can deliver growth: Nick Bish, chief executive of the ALMR, has argued that the sector can create jobs, especially for young people, if the government provides a fairer and more supportive taxation and regulatory framework. He said: “(We are) delivering growth in excess of any other sector. We can genuinely create jobs overall - and especially for young people. If the government wants success then get the unemployed on to the private sector payroll. The way to do this is to make the taxation system fairer – stop the (beer duty) escalator, reduce VAT for eating and drinking out - and stop the relentlessly increasing burden of compliance costs. The industry can be relied on to be responsive and responsible but we will push back against the anti-alcohol campaigners and the health enthusiasts who are nannying us out of business. But in short, give us the room to succeed.”

Tim Martin – minimum pricing is a red herring: JD Wetherspoon founder Tim Martin has told the ALMR’s 20th anniversary conference that he believes minimum pricing is a red herring for the industry. He argued that the sector needed to put its support behind the campaign led by veteran campaigner Jacques Borel to reduce VAT rates in the hospitality sector. Of minimum pricing, he said: “It won’t do us any good at all – supermarkets will still have the same economic benefit (of no VAT on food). We in the industry have been slow to pick up the point – we’ve been paying 20 per cent VAT on food, supermarkets have been paying nothing.” Martin said that while he had been campaigning for lower VAT in the sector, no-one had been able to argue that point was “wrong in principle”. This meant that there was every chance “of convincing people over time”. “People gradually become convinced,” he said. Stonegate Pub Company chairman Ian Payne told the conference that minimum pricing is “the worst thing that can happen to us”. 

Host of operators receive awards from the ALMR: A host of operators received awards last night from the Association of Licensed Multiple Retailers (ALMR) in recognition of their contribution to the industry in the past two decades. The awards, which were part of the ALMR’s 20th anniversary dinner, saw Chris Hutt win the Entrepreneur Award – Ian Payne, Ted Kennedy, Rupert Clevely and Steve Wilkins were also nominees. The Innovator Award – for continuous development and new ideas – went to JD Wetherspoon. Nominees were Geronimo, Beds and Bars and Mitchells & Butlers. The Endurance Award – for survival, reinvention and retaining relevance - was presented to Thorley Taverns. Nominees were Tim Martin, Bob Ivell and Glendola Leisure. The Best Bet award – for the company most likely to be around in 20 years’ time and delivering the best return – went to Novus Leisure. Spirit, Amber Taverns and Beds and Bars were nominees. The award for Sector Champion was won by Beds and Bars boss Keith Knowles. And an award for Outstanding Contribution to the ALMR was given to Glendola Leisure’s Peter and Alex Salussolia. 

Horizons - innovation increases on high street menus: Britain’s high street restaurants are working hard to give diners a choice of innovative new dishes with bold flavour combinations, as well as offering an increasing amount of information on their menus about the ingredients they are using. These are the key trends evident in UK’s high street restaurants revealed by the latest Menurama survey from foodservice analyst Horizons. “Our chain restaurants are becoming much more innovative in terms of dishes and ingredients, partly to keep people interested, but also because consumers expect them as they now have more exposure to unusual foods through the supermarkets and TV cookery programmes,” said Horizons’ director of services Paul Backman. Horizons also reported that 39 per cent of high street menus carry calorie information on their menus and that regional pricing disparities are disappearing. “Chain restaurants now operate a single pricing structure across their whole estate. Operational costs are also levelling out across the country,” added Paul Backman. Overall, the average price of a dish has risen nearly three per cent year-on-year from £6.19 to £6.41, with the cost of a main course rising fastest in quick service and restaurant establishments. The average price for a three-course meal in a restaurant has risen 7.1 per cent to £20.90, up from £19.52 last year, while a three-course meal in a pub now costs £16.15, up 4.2 per cent from £15.50. 

Mervyn King – Britain to emerge from recession later this year: Bank of England governor Mervyn King has predicted the UK will climb out of the double-dip recession later this year. Speaking on BBC Radio 4’s Today programme, Sir Mervyn said the economic picture was “patchy” but added: “There are signs of a recovery coming and we see that in the business surveys and I think also in the employment data. A reasonable view would be that we would start to see steady, slow recovery during the course of the year.”

Company news:

All Our Bars takes on Punch site: All Our Bars, the multi-site operator headed by Paul Wigham, is making a joint investment of £250,000 with Punch Taverns on a venue in Shoeburyness, Essex. Starting later this month, the refurbishment of The Garrison Arms in Campfield Road will see the pub re-branded as The Bombardier. The pub is located next to the former Shoeburyness Barracks which is now subject to residential development. Paul Wigham said: “We are very excited at the prospect of developing a quality suburban local at a versatile site in a busy and vibrant area. Our offer will see the introduction of a large range of real ales, speciality premium spirits, and a value for money menu. We are excited to be working on another project with Punch Taverns who are proving to be the UK’s most positive and progressive pub company.”

Former Gordon Ramsay pub to re-open as a community pub: The Devonshire Arms in Chiswick, run for a while by Gordon Ramsay is to is to re-open this weekend as a “community pub”. New owner Paul Waterer reports that it will be re-positioned away from its former guise as a gastro-pub, trading as a “traditional local”. “We’ll have reasonably-priced food, and our drinks will be very competitively priced. We want it to be the hub of the local community.” Waterer ran the Prince Edward pub in Notting Hill with business partners Paul Roomussaar and Rob Hutchings until the lease expired in February. Nick Gibson ran The Devonshire Arms for a year after Ramsay left the site.

Antic Pub Company starts work on 24th pub: Antic Pub Company, the London-based operator, has started work converting a former O’Neill’s in North Finchley to The Bohemia. Earlier this week, Morning Briefing reported that the freehold of its most recent opening, Pratt & Payne on Streatham High Road, is to go to an Allsops auction on 21 May with a guide price of between £1.2m and £1.3m.

McDonald’s gets 24-hour opening in Stoke residential area: Residents have lost their battle to stop a McDonald’s in Stoke’s Meir Park area from opening 24 hours a day. The McDonald's branch was previously open from 5am to midnight. McDonald's lodged a similar application in 2008 which was defeated following residents' protests. At the time, councillors agreed to allow the restaurant to remain open for an extra hour. Spokesman Andrew Evans said: “McDonald's is seen as a big American company which doesn't do what it should. That may have been true a long time ago but it's not the case anymore."

Douglas Jack – buy Marston’s shares: City analyst Douglas Jack, of Numis Securities, has issued a “buy recommendation” on Marston’s shares ahead of the company first half results on Thursday 17 May. Jack forecast profit before tax for the company will be up ten per cent to £32m. He added: “However, we believe forecast risk is firmly on the upside: the factors that helped to drive a 16 per cent rise in earnings per share in the second half of 2011 have not suddenly gone away. We believe double-digit earnings growth and a resumption of dividends being progressive should lead to the share price breaking out to circa 115p a share.” His Target Price for Marston’s shares is 130p.

Punch buying club raises a toast to 100,000th order: An industry leading online purchasing website launched by Punch Taverns has just celebrated its 100,000th order. More than 2,300 Punch licensees now order online through the Punch Buying Club, accounting for more than 38 per cent of drinks orders. Licensee Christopher Watson, from The Royal George Inn in Peterlee, County Durham, placed the milestone order which he received free of charge. Buying Club director Andy Slee said the website was more than just an online retail store, with licensees using the site to submit comments, offer feedback and share best practices. Licensees trading online also benefit from free access to business building and marketing resources and can sign up for exclusive group buying deals or just check up on their latest invoices and statements.

Friday opinion:

Subjects: A proper voice, South Africa food scene, ALMR at 20
Authors: Paul Charity, Ann Elliott, Steve Richards

The importance of a proper voice by Paul Charity: Later today I leave for the National Restaurant Association (NRA) show in Chicago with a group of Association of Licensed Multiple Retailers (ALMR) members. For those who haven’t been, it’s rather special. Attracting 55,000 attendees, the show provides a showcase for all manner of new products and innovation in the world’s largest eating and drinking out market (the brilliant educational sessions at the show alone make it worth attending). It’s organised by the NRA, a powerful lobby group for US restaurant and foodservice operators. The NRA provides an interesting compare-and-contrast with the UK, where the eating and drinking out sector is, of course, also hugely vibrant. There’s been a void in the UK where the NRA sits in the American scene. No single, clear voice has emerged in the past two decades, as the landscape has evolved quickly, to represent the interests of all companies who have one thing in common – the provision of food and drink outside the home. As huge employers and massive taxpayers, these companies, our companies, deserve and need to have a clear, articulate single voice on the major issues that unite them. The development of such a voice has been beset by legacy issues that go back to the development of the industry. The British Beer and Pub Association quickly became, after the Beer Orders, the trade body that largely homed the beerage and the large property-owning companies that were formed out of the diaspora of pub property that followed the brewers’ departure from the retailing landscape. Sometimes it even felt a bit like a class issue as well. From around 2000 onwards, Mitchells & Butlers (M&B), for example, increasingly focused on better quality retailing, didn’t really have an awful lot in common with the large tenanted companies and brewers. But its executives were from the world of its former incarnation as Bass and no doubt felt at home with people they previously regarded as colleagues in the brewing fraternity (or went shooting with). Yesterday’s news that M&B is to leave the BBPA and join the ALMR is a hugely symbolic step and a telling piece of realpolitik. Essentially, M&B, so long largely voiceless on the real issues facing retailers (when was the last time you heard a M&B view on the burning issues of employment and tax), has followed the compelling logic of the situation and made its way to the place where all the other pure retailers are gathering. It follows hot on the heels of a host of other arrivals. These include Spirit Pub Company, where chief executive Mike Tye decided last year the company should be members of a trade body with a total retail issues focus and JD Wetherspoon, where founder Tim Martin was persuaded after 30 years of “go-it-alone” that he could no longer plausibly complain that the industry has a fragmented approach to issues. An amazing amount can change in a single year as momentum gathers in a certain direction – within 12 months the strength and influence of ALMR has been boosted enormously by an influx of new members and the absorption of the out-lying late night operators who were previously members of the trade body BEDA. But there should be a second phase. It seems to me that the interests of companies like Tragus, Restaurant Group, Yo! Sushi and Whitbread and others are best-served within the ALMR. Again, legacy issues are at play. The vast majority of the senior executives of these companies came from a pub sector background. When they took their careers outside the pub sector - often a decade or so ago - it must have felt they had arrived on a wholly different planet such was the contrast with their old worlds. Now, though, the divisions are so much less distinct – there is increasingly little difference between, say, M&B and The Restaurant Group. Resources need to be gathered still further to make the case for our industry in the best possible way. The ALMR, now with just under 150 operator members, is now the right body for operators to hang their hats.
Paul Charity is managing director of Propel Info


What South Africa can teach us by Ann Elliott: I have always wanted to visit South Africa of course for its weather, beaches and safaris but also for its food. So this Easter I took a bit of gastronomic tour of the country. In general our food was wonderfully fresh and prepared from scratch with limited usage of bought in finished product. There was little mention of provenance (apart from Chalmar beef), organic, local or regional sourcing or sustainability credentials on any menu. Needless to say the fish was exceptional (Angel fish, kop, yellowtail and Kingclip), the steak was superb and menus featured a wide range of South African meats including Ostrich, Springbok, Kodu, Impala, Crocodile and Warthog. South African food though is nothing if not eclectic. A ‘South African’ menu might include Greek salad, Patagonian calamari, half a dozen snails, Moroccan chickpea soup, Indonesian vegetable curry, Persian chicken, Norwegian sesame crusted salmon and beef & lentil korma. In top end restaurants chefs used a broad spectrum of ingredients -not frightened of blending 10 or more different tastes on one plate to excite and challenge customers. Often this mix of ingredients created exceptional tasting food for an average spend per head, including wine, of around £25-£30. What was stunning and surprising in South Africa was the attention paid to plate presentation even in the most obscure of locations. Usually, detailed care had been paid to the look of food on the plate with real consideration being given to texture, colour, portion size and aesthetics. Service, more often than not, was friendly, professional, attentive and knowledgeable. Food was generally served correctly to the person that ordered it without being ‘auctioned’ first. Checkbacks were quick and unobtrusive and most servers seemed to ‘own’ their table. There is no doubt that, in South Africa, the very low cost of casual labour helps keep kitchen costs low, helps restaurants spend time on wonderful plate presentation and helps front of house speed of service. Restaurant marketing however was not particularly great. External signage was often poor and non-descript giving absolutely no clue as to the restaurant’s identity, differentiation or offer. There was little evidence of database marketing, CRM activity or online marketing activity. Websites didn’t always include online booking, up to date guide mentions or customer reviews. There is a massive tourist market so this may not be necessary. It did however reinforce the importance of building relationships with those who offer accommodation. Those word of mouth recommendations are critical in this tourist market. In summary, South Africa’s food offering was refreshing, exciting and different. It’s a market of few chain restaurants and lots of interesting individual offerings. The food starts from the basis that it’s fresh, locally sourced and cooked from scratch. Plate presentation was a revelation. Service was consistently good and not a differentiator. Here culinary skills really do create differentiation. I took away many ideas that we, as an agency, can use in terms of insight, strategy and marketing activity that we can, and will, use to help our clients increase their sales of food and drink. I have produced a short report on my experience of eating out- just email me if you want a copy (ann@elliottmarketingpr.com) though I suspect you might be sent a copy anyway. I loved the place- lots to learn, copy and share for operators and suppliers alike. A must visit country with lots to teach us.
Ann Elliott is managing director of Elliott Marketing and PR


The ALMR goes from strength to strength by Steve Richards: To understand why the ALMR was formed, it is worth remembering the political and economic climate prevailing at the time. Mrs Thatcher’s long premiership had just ended and John Major’s had just begun. He had to govern with a small majority and a divided party; he also presided over a broken economy following a deep recession and there were three million people unemployed. Whoever said ‘history doesn’t repeat but it does rhyme’ might be on to something. In the hospitality sector things were very different, the “Big Six” brewers were shedding thousands of pubs following the Beer Orders a few years earlier, thereby creating a new business model – the pubco, and 70 per cent of alcohol was still consumed in the on-trade. There were few branded outlets and the likes of JD Wetherspoon, Slug & Lettuce, TGI Friday’s, PizzaExpress and All Bar One were in their infancy. On the high street, the abundance of cheap empty property allowed branded pub chains to grow and casual dining businesses to gain a foothold. It was against this backdrop of transformational change and tough economic conditions that a group decided to form a new body to represent this new breed of operator entering the trade; helping them develop their businesses and lobbying government and Whitehall on their behalf. What made the ALMR different from the other trade bodies at the time was its focus on representing the concerns of licensed retailers only. I believe the original vision is still relevant and will provide the guiding principles for the next 20 years. Obviously, the ALMR today is a different animal to that of 20 years ago and following the recent merger with the Bar Entertainment and Dance Association (BEDA) now represents 142 companies who employ many people. BEDA has made a big impact since its inauguration in 1952 and with John Hayes and Damian Walsh, the ALMR has two experts to call upon. The merger will strengthen our presence in the late-night sector and add clout to our dealings with central and local government. This year, the ALMR will focus on increasing its ‘brand relevance’ to operators in the casual dining sector. Within the organisation, members such as TGI’s, La Tasca, Geronimo (now part of Young’s), and Whiting & Hammond have a significant presence within the arena and the ALMR will make their voice heard in Whitehall. The ALMR will also be addressing the current challenges facing all operators. These include: tax and duty levels, in particular the imbalance with supermarkets; changes to legislation that increase costs and unnecessary regulation; PPL tariffs; as well as presenting the many positives of the industry via the “Outlook” campaign. We will also showcase to Government and national press the career opportunities within hospitality; highlighting the sector’s importance to both the economy and people’s daily lifestyles; and stressing the success of multiple retailers and the abundance of innovative ideas they bring to the country as a whole. Throughout the many changes over the past 20 years, the ALMR has been fortunate in having chief executive Nick Bish ever present. He has led the organisation through many challenges, but has always remained true to the original vision; this I believe explains the continuing success of the body. Around Nick sits a very talented team, who bring great experience and specialist skills to the organisation. In particular, the ALMR has great lobbying and influencing capabilities; let’s just say I am very relieved the formidable Kate Nicholls is on our side of the debate! The ALMR is very much run for its members and absolutely relies on their expertise and input. All of the campaigns ALMR undertakes are funded by its members and steered by its members; it’s fair to say ‘one gets out what one puts in’. Here’s to another 20 years.
Steve Richards is chief executive of Novus Leisure and chairman of the ALMR

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