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Morning Briefing for pub, restaurant and food wervice operators

Tue 22nd May 2012 - Best Place Inns, Young’s and Marston’s

Story of the day:

Best Place Inns in private equity talks: Best Place Inns, the five-strong pub and hostel provider led by Ben Stackhouse, is in early stage talks with a private equity firm after receiving an unsolicited approach. The company provides hostel accommodation over traditional pubs in London. It is planning as many as three new openings next year with a possible move outside London to open a site in Cambridge. Stackhouse told Morning Briefing: “Private equity backing is not something we’ve looked for but I’m happy to have the conversation. We’ve also had offers of backing from private individuals.” The company operates traditional tied pubs and develops hostel accommodation above. Stackhouse added: “This year we are focused on consolidation but we are breaking weekly sales records as our sites continue to build.” Stackhouse reported, however, that the London budget accommodation market is currently being flooded, with 100 new arrivals listed on since the start of the year. He added: “It’s a shame because some inexperienced operators are offering discounts far too early – it means tens of thousands of pounds of lost revenue for the marketplace as a whole.” Best Place Inns’ most recent opening was a £250,000 joint investment with Punch Taverns - The Great Eastern in the Isle of Dogs.

Free Report: Paul Charity has written a report on menu trends, the drivers of US dining occasions, the franchise business model and other key areas of the US foodservice market and their significance to the UK market. The report, based on a visit to the National Restaurant Association show in Chicago, is produced in conjunction with the Association of Licensed Multiple Retailers and sponsored by CPL Training. It is free and is available by e-mailing Paul Charity on

Industry news:

An English wine beats champagne houses: An English wine produced in Bolney, West Sussex has beaten the best-known champagne houses in France in an international competition. Bolney Wine Estate won the judges’ top accolade in the International Wine and Spirit Competition, beating champagne houses such as Moet & Chandon and Taittinger. 

Lunch-eaters are creatures of habit: A survey by Whole Food Market has found one in three Britons eats the same meal for lunch every day and more than 50 per cent have been doing so for more than six years. The most popular regular lunch is a cheese sandwich with a ham sandwich placing second. A spokesman said: “It’s mainly due to convenience and habit that people are eating the same thing day after day.”

10,000 street parties planned for the Queen’s Diamond Jubilee: More than twice as many street parties are planned – 10,000 in total - than for last year’s Royal Wedding. More than 6,500 roads will be closed for the celebration, with most street parties planned for Sunday 3 June to coincide with the Diamond Jubilee Pageant.

Northern Ireland nightclub breaks 2am voluntary closing: A Northern Ireland nightclub has broken ranks over a voluntary trade agreement to close at 2am. Belfast's Rain nightclub said it had reverted back to its 3am closing time as trade was down and it needed to protect jobs – the nightclub said it would have had to reduce staff numbers by 24 had it stuck to the 2am closing.

Company news:

Conran restaurants hit the market: The D&D Restaurants business founded by Sir Terence Conran has come on the market with a price tag of between £70 and £100m. The sale, being overseen by Rothschilds, is seeking an investor to allow the business to expand. It is thought that management would retain its 31 per cent stake in the business while Conran would sell his remaining stake. D&D Restaurants, which includes Quaglino’s, Le Pont de la Tour and Coq d’Argent, made an operating profit of £7m last year.

Music festivals hit by downturn: The Music Festival Group, headed by Vince Power, has warned that ticket sales for its festivals have slowed this year. Tickets for Hop Farm, which takes place at the end of June with Bob Dylan headlining “are currently slower than last year”, the company warned. AIM-listed Music Festival Group made a pre-tax profit of £796,000 on sales of £13m last year.

Leisure sector training firm wins Vauxhall contract: A best-in-class e-learning framework that originated in the hospitality sector has been acquired by one of the UK’s leading car manufacturers, Vauxhall. CPLe-learning, part of the CPL Training Group, was trialed by retail chain Revolution, owned by Inventive Leisure, back in 2010. The programme has since been adopted by a host of sector companies, including Stonegate Pub Company, because it allows easy integration of a company’s key brands, systems and training objectives, using leading-edge animation and video. CPL Training has gone on to apply its CPLe-learning programme to a host of other sectors, including the care sector, hotel sector and food manufacturing sector. Now Vauxhall has launched its first e-learning course – Working At Height - in partnership with CPLe-learning.

Bath Ales adds boutique accommodation: Bath Ales, the operator of eight pubs in the south-west, has added boutique accommodation at its ninth site, The Wellington pub in Bristol. The site now offers eight boutique style bedrooms after a refurbishment overseen by local agency Simple Simon Design. Bath Ales retail director Robin Couling said: “The location lends itself perfectly to extending our offer - with two of the city’s most popular sporting venues within walking distance and the centre of Bristol just a short taxi ride away.”

Frankie Dettori opens a new restaurant: Former jockey Frankie Dettori has opened a new restaurant, Sette, in Chelsea. The venue offers regional Italian cooking. Dettori founded Frankie’s Bar & Grill with Marco Pierre White more than a decade ago.

Design company Harrison hired for Roman Baths Kitchen: Design company Harrison, which oversaw the design work for the revitalisation of TGI Friday’s brand in the UK, is undertaking the design work for Roman Baths Kitchen, a new deli and bistro opening by high-end caterer Searcy’s in Bath. Unusually, the opening is being jointly funded by Searcy’s, which operates the champagne bar at St Pancras, and Bath and North East Somerset Council to provide extra catering for visitors to the Pump Rooms. Chris Maddison, marketing director at Searcys, said: “The Pump Rooms plays a key role in Bath's tourist offering and is extremely popular with both national and international visitors. The new Roman Baths Kitchen, along with the existing Pump Rooms restaurant, will ensure that we are able to cater for the huge number of visitors that the venue welcomes on a daily basis.” The new venue is set open later this month. 

Marston’s reports good growth in Pitcher & Piano through premiumisation: Midlands-based Marston’s has reported its 21-strong Pitcher & Piano estate has achieved nine per cent growth in like-for-like sales through taking a premium approach. The brand has achieved a 16 per cent uplift in food sales and a seven per cent boost to wet sales – food mix has risen two per cent to 22 per cent of turnover. Finance director Andrew Andrea told Morning Briefing that Pitcher & Piano was serving 95 per cent fresh food on its menu, with the brand operating on a Brunning & Price-style semi-independent basis. The brand is taking a theatre approach to food and drink with sharing platters and innovative cocktails a point of focus. Andrew argued that the market has seen an emergence of polarised offers whereby companies either offered extreme value, like JD Wetherspoon, or a premium experience whereby consumers are prepared to pay more for drinks. 

Mitchells & Butlers “our price rises are lower than competitors”: Mitchells & Butlers executive chairman Bob Ivell has told City analysts the company price rises of 4.8 per cent on drink and 2.9 per cent on food are below the market rates. He said: “We do surveys and there is a gap between us and quite a lot of our competitors. Some of our peers have raised prices more than we have.” Ivell added that he thought some of the prices at the company’s premium sites are “perhaps not premium enough”.

McDonald’s struggles to find franchisees in China: The chief executive of McDonald’s in China, where the company has 1,400 restaurants, has revealed the company is struggling to find franchisees. At the moment, 80 per cent of McDonald's sites worldwide are run by franchisees but in China only 36 restaurants are franchised. Kenneth Chan told CNN Money: “We are working hard on this. In addition to the conventional franchise model in mature markets like the US, we also implement what we call a “developmental licensee” model. In certain provinces where we don't have the capacity to reach out for many years, we are looking for licensee partners who have strong financial backgrounds and strong business experience. China had seven conventional licensees and two developmental licensees as of 2011. It's still a very low percentage and over a very short time that will change. The pace of franchising in China depends largely on finding the right partners.”

Paul Hickman – we’re buyers of Young’s stock: Paul Hickman, City analyst at Peel Hunt, has issued a note in which he recommends buying Young’s share ahead of Thursday’s results. He said: “In the first half, like-for-like sales in the Young’s estate were buoyant at plus four per cent. We believe this reflects both its operating quality and the strength of the London economy. And although we have not had a preview of progress in the second half of its financial year, all the signs are that the national pub market is a little stronger than expectations. Combined with Young’s enviable positioning and professional management this should produce a favourable result on Thursday. Geronimo is quite clearly succeeding, including exceptional recent openings such as The Cow in the Stratford Westfield Centre, The Oyster Shed in the City, and the converted Half Moon in Putney, adding to recent developments such as The White Horse in Exchange Square and Dial Arch in Woolwich. We are buyers on the positive strategy, the favourable London trading market, the property backing, and the balance sheet. This is a company that has a tendency to under-promise and over-deliver, and is quite clearly poised to reap the benefit from the national party that will dominate the summer. More important, we believe it will continue to reflect the importance of London as a national and international centre.” 

Stonegate Pub Company invests in Newcastle pub: Managed operator Stonegate Pub Company is spending £100,000 on a refurbishment of its The Three Bulls Heads in Newcastle. A favourite haunt for Newcastle United fans, the pub will be painted black and white outside.

French Bubbles opens fromagerie: Champagne supplier French Bubbles has opened Champagne + Fromage on Covent Garden’s Wellington Street. The site will combines a shop specialising in artisanal, limited production grower champagnes with an exclusively French fromagerie and a 30-cover bistro.

Cardiff businessmen to open second site: The owners of the Pica Pica tapas bar and restaurant in Cardiff are to open a pan-Asian bar and restaurant. The venue will occupy the site of the former Tabu nightclub, closed in 2009. The new venue, named Double Super Happy, is set to open in September once approved at Cardiff council’s planning committee. Double Super Happy was granted the right to serve alcohol, despite being located in one of the capital’s saturation zones.

Influential Bath restaurant comes on the market: A Bath restaurant, widely regarded as the single most influential restaurant in post-war Britain, is being brought to the market by Christie + Co. The Hole in the Wall in Bath’s George Street is housed in the vaults of two Georgian townhouses and comes with a special and unique history. It offers 85 covers and has a history of strong trading performance The restaurant is renowned as the birthplace for haute cuisine in Britain, established by the influential restaurateur and chef George Perry-Smith in 1951. The leasehold is on the market at £175,000.

Brumby and Connell to hold Imbiba Bar and Restaurant fund briefing: The Imbiba Bar and Restaurant Fund, headed by John Connell and City analyst Mark Brumby, are to hold a presentation day on Tuesday 12 June, to explain their vision for two new bar and restaurant concepts. Their Imbiba London Bar and Restaurant EIS Fund is to invest £2.2 million of committed capital into the concepts. Imbiba’s management team already operates five Drake and Morgan sites, which are currently achieving a 51 per cent return on investment. Over the last 15 years, the Imbiba partnership has achieved an average compound rate of return in excess of 35 per cent per annum for all its EIS scheme projects. The event will be held at The Folly Bar and Restaurant in the City.

Overseas news:

Magazine reveals top five growth beverages in the US: Nation’s Restaurant News has revealed its list of the top five growth beverages in the US market. The list, in descending order, is: 1 Iced/frozen/slushy coffee; 2: Smoothies; 3: Cappuccino/espresso/latte; 4: Iced tea; 5: Frozen/slushy soft drinks. “In most cases, consumers like both the familiar and something new. Both interests have brought about a change in the mix of beverages consumed at commercial foodservice,” Bonnie Riggs, restaurant industry analyst, NPD Group told the magazine. “The beverages growing in popularity provide restaurant consumers with what they’re looking for in terms of flavours, taste, thirst quench, price, and fewer calories.”

Panera Bread charts way ahead for free Wi-Fi: Panera Bread, the US café bakery chain which led US growth leagues last year after recruiting ten million loyalty cards customers, is planning the next stage of its free Wi-Fi evolution. The company introduced free Wi-Fi eight years ago and saw sales increase by 15 per cent. Now Wi-Fi is so popular that customers are suffering slow internet service – the company had 2.7 million wireless sessions in April compared to 2.2 million in the same month the year before. The company is now considering offering unlimited Wi-Fi access to members of its loyalty card scheme – sessions are often limited to 30 minutes at lunch. There are 65,000 free Wi-Fi spots in the US with Starbucks accounting for 23,000 of them.

Yoghurt brand places social media at heart of concept: A yoghurt concept Let’s Yo has blended frozen yoghurt with Apple Store-inspired social media and design. When customers enter sites they see banks of self-serve yoghurt flavors and racks of toppings, but also wall-mounted screens displaying social media icons, and QR codes that take smartphone users to Let’s Yo’s Facebook and Twitter pages. Tables contain built-in iPads. The Apple Store influence in décor is evident in nearly all-white decor, which features sleek, backless, round white chairs. The first site opened in Marlboro, New Jersey and ten franchised sites are already open with 30 more due to open before the end of the year, mostly in New Jersey and New York.

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