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Morning Briefing for pub, restaurant and food wervice operators

Thu 2nd Aug 2012 - Cote, Wagamama and London pubs

Story of the day:

Hawkpoint markets Cote bistro chain: Corporate advisor Hawkpoint has been appointed to begin soft marketing of the French brasserie business Cote, whose tagline is: “Simple freshly prepared French food at value-for-money prices”. The company, which is owned by Richard Caring, saw turnover of £35,583,416 in the year to July 2011 and Ebitda of £6.8m with pre-tax profit of £3,971,680. Cote currently operates 33 restaurants, with seven sites opening in the past year. It opened 12 sites in the previous financial year. The last filed accounts show the company owed Caring £6.79m, which he provided the company as an unsecured, non-interest bearing loan – it has bank debts of £13.29m. Industry experts believe the company is likely to have Ebitda in excess of £10m for the latest financial year, which finished yesterday, with the company worth between £90m and £110m. The brand, founded in 2007, currently has the second highest customer satisfaction score out of 50 major brands surveyed by Propel Info for the CPL Training Customer Satisfaction Index. It also won Best Value Restaurant Britain in 2009 from the Good Food Guide. New Cote openings are planned for York, Chichester, Oxford, Tonbridge Wells and Henley-on-Thames. One industry source said: “It’s an exceptionally good business.”

Industry news:

Lewisham – pubs are victims of cultural vandalism: More than a third of Lewisham’s pubs have disappeared in the past decade, according to a new report released by the borough council. Local councillor Liam Curran is now campaigning for a change to local planning permission to save pubs for future generations. The report, which was released at the council's sustainable select committee meeting last week, shows that the number of pubs in Lewisham fell to 92 in 2011 from 145 in 2001. One of the hardest hit areas was Evelyn a council ward in north Lewisham, where now only five of the 21 pubs remain. The report says most of the pubs were pulled down to make way for residential complexes. “Pubs are the hub of the community, a democratic place where anyone, irrespective of class, income, race and background, can go and meet their neighbours for the price of a pint,” said councillor Curran. “Here in Lewisham, many of the pubs are handsome, fine Victorian buildings in the most prominent locations in our high streets and side streets. It is cultural vandalism that so many are being pulled down.”

“Breastaurant” trading style enters coffee market: The US foodservice club known as “breastaurant”, featuring conceprts such as Tilted Kilt, Hooters and Twin Peaks, has made its first known appearance in the coffee market. Barista Café, a coffee shop, is set to open in Scottsdale, Arizone on 12 August. It will feature an all-female staff in a uniform of short shorts and sports bra-type tops. Female owner Nicci Graziano said the restaurant will serve healthy food, including salads, sandwiches, wraps and smoothies. Her goal is to guarantee a 30 minute lunch, with quick service as well as grab-and-go options. “Our goal is to differentiate ourselves from other breastaurant-style restaurants in that the entire dining experience – including travel time – is guaranteed to take 30 minutes or less,” Graziano said.

Food and drink publisher reports strong year: William Reed Business Media, the publisher of food and drink magazines such as The Grocer, Restaurant, Publican’s Morning Advertiser and M&C Report, has reported pre-tax profits almost doubled to £2,264,000 in the year to 31 March 2012 from £1,205,000 the year before. Turnover rose to £27,388,000 from £24,521,000 in 2011. Ebitda was £3,167,000, up from £2,050,000 in 2011 – an Ebitda margin of 11.6 per cent compared to 8.4 per cent in 2011. The company has net cash of just over £9m. The company stated: “The directors had expected and budgeted for relatively subdued trading conditions through the financial year ended 31 March 2012 following the downturn in 2010 and in light of macro-economic issued faced by the company’s markets in the UK. Trading in the year to 31 March 2012 was in line with expectations and an underlying improvement on the year before.” 

US fast casual better burger chains grew sales by 20.8 per cent in 2011: Fast-casual burger chains grew sales by 20.8 per cent in the US last year, while all limited-service burger chains grew 3.7 per cent, a new report by research house Technomic has reported. And Technomic sees plenty of room for continued growth, as fast-casual sales are currently only 3.2 per cent of Limited Service Restaurant burger-segment sales. “Better burger concepts have a lot going for them. First, they have the benefit of a basic and beloved menu focus. Raising the quality of the protein, bun, toppings and sides has been a winning formula. And a number of celebrity chefs have opened concepts that focus on burgers made with premium ingredients, helping to raise their profile,” said executive vice president Darren Tristano. “Plus, the segment includes some of the rising stars of the industry overall. For example, Smashburger grew sales by more than 71 per cent in 2011, and Five Guys Burgers and Fries increased sales by 24 per cent.”

Two join Independent Complaints Panel: A professor of marketing and a specialist licensing barrister have joined the Independent Complaints Panel of industry watchdog The Portman Group. Professor Isabelle Szmigin and Professor Roy Light have been have been appointed to the independent body which considers complaints about irresponsible alcohol marketing after a “competitive recruitment process”. Szmigin is professor of marketing at Birmingham Business School, and her research interests lie primarily in the areas of consumer research, services, ethical and social marketing. Light is a licensing barrister based at St John’s Chambers, Bristol, and a professor emeritus at Bristol Law School.

McDonald’s – breakfast after midnight: McDonald’s has introduced a Breakfast After Midnight menu in the US at 24-hour sites offering some of its most popular morning meal items at midnight. The menu choices include Egg McMuffins, Sausage McMuffins, hotcakes with sausage, breakfast burritos, fruit and maple oatmeal, hash browns, juice and coffee.

Company news:

Former All Bar One operations director confirms second Punch Taverns site: Alastair Scott, who was previously the operations director for Mitchells & Butlers’ All Bar One bar chain, has signed up for his second Punch Taverns pub, The Square and Compass, near Harrogate. The venue is expected to open in September after a £200,000 investment by Scott’s Malvern Inns business, which he runs with former Mitchells & Butlers colleague David Roffe. He told Morning Briefing: “We will be installing a smokehouse – we feel the market is missing a quality meat offer.” The new site comes just over 12 months after Scott re-opened The George at Backwell, near Bristol, in a £360,000 joint investment with Punch. It was taking circa £2,000-a-week prior to refurbishment and is now netting in excess of £15,000-a-week with like-for-likes sales growth running at 15 per cent in the weeks after the first anniversary of its opening. He said recently: “A pub tied to an owner like Punch Taverns is a fantastic way to get into the business. It's about getting a great deal.” The Square and Compass will carry a Village Pub and Dining sub-head and is located between two Premium Country Dining venues run by Mitchells & Butlers.

Collyer - £900m of London pubs changed hands since 2009: Geof Collyer, leisure analyst at Deutsche Bank estimates that £900m, of London pubs have been sold since 2009. He said: “The acquisition of Novus brings package deals of London bars and pubs to over £300m since Young’s bought Geronimo Inns back in December 2010. The importance of the more buoyant trading conditions in the capital and its relative economic health compared to the rest of the country can be seen through not just the Novus like-for-likes and Geronimo Inns like-for-likes (+9.8 per cent for year to end April 2012) but also in Greene King (55 per cent of pubs in London and south east), Spirit Pub Co and Fuller, Smith & Turner’s sector-leading like-for-likes plus the commitment of Novus’ new owners to double the London business’s profitability. To underline the importance / health of the London market, we could have added in here the 193 pubs that Enterprise Inns sold through sale and leaseback deals for £271m and its current plan to sell outright a further 200 London and south east pubs for circa £250m this year and next, along with the estimated 50-plus pubs that Punch Taverns sold in London and the south east in 2009 for around £100m – a grand total of well over £900m of pub purchases in the most economically prosperous part of the UK between 2009 (and now).”

Thornbridge Brewery opens first Punch pub tonight: The award-winning Thornbridge Brewery will open its for its first Punch Taverns pub this evening. It’s to operate The Cross Scythes, Derbyshire Lane, Sheffield on a ten-year, free-of-tie lease – Punch has made an investment of £200,000 at the site to make it a “destination pub for the local community”. Simon Webster, Thornbridge’s chief operating officer, said: “The deal was completed in a very positive way with both sides keen to make the best of a site that has under performed for some years.” The Cross Scythes will be Thornbridge’s twelfth pub.

Geronimo Inns launches “Awfully Thorough Guide to Being British”: Geronimo Inns, the Young’s-owned food-led operator founded by Rupert and Jo Clevely, has launched the “Awfully Thorough Guide to Being British” on its website. So far, two three-minute videos provide a comedy explanation of the rules on the arcane areas or “manners” and “queueing”.

Iconic Manchester nightclub to become a hotel: The site occupied by the iconic Twisted Wheel nightclub in Manchester is to become a hotel in a £25m scheme. Plans to transform the site were given the go ahead by planners despite opposition from music campaigners who wanted to preserve the venue. The building on the corner of Whitworth Street and London Road will be demolished to make way for a 330-bed budget hotel operated by European chain Motel One. The site – now Legends nightclub – is owned by developers Olympian Homes and will be leased to the German chain, which specialises in hotels aimed at business travellers.

Easterbrook takes top job at Wagamama: Steve Easterbrook is the surprise choice as the new chief executive of Wagamama. Easterbrook, who oversaw the revival of McDonald’s, moves across from Gondola restaurants’ PizzaExpress chain where he has been in charge for less than a year. The top job at Wagamama has been vacant since June when Steve Hill left. Wagamama, which has 84 sites in the UK and 34 overseas franchisees, plans 15 new openings in the UK this year. Easterbrook said: “Wagamama is a great business with huge potential both here in the UK and further afield.”

Marston’s submits plan to open pub close to Llanelli Scarlets stadium: Marston’s has submitted a planning application to build a new pub and hotel on the Parc y Scarlets overflow car park close to Llanelli stadium. “In working hard to build our business at this stadium and create an iconic venue, it’s positive to see this area being identified and attracting interest from a successful UK-wide brand with the potential of creating more jobs, hotel beds and improved car parking facilities near our stadium and for Llanelli,” Scarlets chief executive Mark Davies said.

New-build £4.2m “Harry Potter” pub and hotel opens in Alnwick: A new pub, The Hog’s Head Inn, offering 53 bedrooms, which has been funded by Northumberland Estates, has opened in Alnwick, Northumberland. Hospitality operator Greensfield Moor Developments will be managing the venture, which is named after the Inn of Harry Potter fame.

Soho Coffee Company to launch hot food: Gloucestershire-based coffee chain Soho Coffee Company is to launch a new hot food range for at its motorway site, Roadchef Strensham, on the M5 northbound. Penny Manuel, director of Soho Coffee Company, said: “We have had great customer feedback in our southbound SOHO store, praising the quality of our food. There is still very much a demand for hot food for our motorway customers. We have simply applied our ethos of quality, flavour and freshness to develop an extended hot menu especially for them.”

Byron launches Californian burger: Better burger concept Byron has launched a new hamburger called The Californian. The company states: “California produces over 90 per cent of America’s avocados so it’s perhaps not surprising that it’s a popular hamburger topping too. We also noticed the use of pickled red onion, widely used in Mexican cuisine, in place of a standard gherkin.” The Californian is a 6 oz hamburger, with guacamole, pickled red onion, dry cured bacon, shredded iceberg lettuce and a glazed bun priced at £8.75. 

Former Whitbread pub re-emerges as a Hungry Horse: A pub that was one of 239 sold by Whitbread to Mitchells & Butlers in 2006 but which has been closed for two years has re-opened as a Greene King Hungry Horse site. Greene King bought the freehold of The Merlin Hungry Horse on Pride Park in Derby from Brailsford-based Clowes Developments. The Merlin also has an indoor soft play area for children. The Merlin name reflects the contribution Derby-built Rolls-Royce engines made during the Second World War. The Merlin engine powered RAF fighter aircraft, such as the Spitfire, during the Battle of Britain. Mitchells & Butlers operated the site between 2006 and 2010.

Ridge and Furrow Inns to open first site next week: Ridge and Furrow Inns, the company set up by former Ever So Sensible Group operations and marketing director Scott Whittaker, will open its first pub next week, The Wilford Green, in Nottingham’s Wilford Green. It has seen a £350,000 joint investment between Whittaker and the owner of the pub, Scottish & Newcastle Pub Company. The pub, opening on Tuesday 7 August, launches with its own cook book – “Take Home The Taste of Wilford Green”, which has a foreword from Scott’s wife Ruby. Whittaker worked for Mitchells & Butlers for almost seven years before joining Ever So Sensible Group in June 2001, spending 11 years with the company before leaving a month ago to open Ridge and Furrow’s first pub. He told Morning Briefing: “It’s a big pub with 100 covers inside and outside. I did all the cooking and photography for the cook book while Rebecca built our website.”

Kerbisher & Malt opens second site: Fish and chip shop concept Kerbisher & Malt has opened its second site, in Ealing, West London. The new 60-cover restaurant aims to recreate the informality of the original in Brook Green with a menu that offers both traditional and modern dishes with a focus on fresh and sustainable produce. Kerbisher & Malt director Nick Crossley said: “We're delighted with the new site, as we want each Kerbisher & Malt to have its own distinct personality and we really feel we've achieved that here. Ealing is a unique area with a vibrant food scene these days, so we are in excellent company.”

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