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Morning Briefing for pub, restaurant and food wervice operators

Fri 10th Aug 2012 - Innventure, Loungers and Diary 

Story of the day:

Tim Martin – those in the on-trade calling for minimum pricing are flat-earthers: JD Wetherspoon founder Tim Martin has described those in the on-trade supporting minimum pricing as “flat-earthers”. In today’s Friday Opinion, Martin argues that there are lessons to learn from Great Britain’s performance in the Olympics. He writes: “In Britain, we’ve learnt how to compete at the Olympics by assiduously copying the best techniques from abroad (the ‘aggregation of marginal advantage’, says cycling’s Dave Brailsford). But in the pub trade we’re way behind France, Sweden, Ireland and many other European countries who’ve realised that job and revenue creation for the government requires tax equality between supermarkets, restaurants and bars. Let’s get real, you flat-earth minimum pricers, about what minimum pricing will do for the pub trade:  absolutely nothing.  It’s impossible to compete against supermarkets in the long term unless pubs have tax parity.” Martin argues that minimum pricing will simply play into the hands of the supermarkets. “Whisper it secretly, but minimum prices are manna from heaven for supermarkets, who like nothing more than a price rise (just like us), especially one that has no associated costs.” (See Friday Opinion e-mail for the full Tim Martin opinion piece.)  

Industry news:

ALMR survey – trade down by more than 20 per cent in central London: The results of a survey carried out amongst ALMR operators show trade suffering in the first week of the Olympics as normal visitors and commuters stayed out of London and others celebrated the Olympic gold rush at home. In contrast, supermarkets have reported bumper sales in the hours before the opening ceremony. Three quarters of operators reported like-for-like sales were down on the previous year, with over a third saying sales were more than ten per cent adrift and central London sites more than 20 per cent. These reports are focused on London and reinforce the reports of people staying at home to watch the Games and perhaps believing that central London was a no-go area. Perhaps as a result, a similar proportion of respondents reported no problems had been encountered in respect of deliveries – suggesting the scare stories were unjustified – albeit with due credit to suppliers and operators having good plans in place. Commenting on the results, Kate Nicholls, strategic affairs director, said: “Central London food-led businesses struggled again during the early week but recovered somewhat at the weekend. Wet-led businesses benefited later at night after Olympic events, but it is clear that there are not enough new Olympic tourists to replace normal core trade. The majority of businesses are providing Olympic viewing in their sites but this has not dramatically pulled people from their domestic sofas. As a result there are no businesses expressing trading optimism with half of them saying that they are ‘cautious’ that trade will benefit over the period as a whole.” The ALMR will be repeating the exercise for the second week of the Olympics.

Licensee - cut VAT before my business collapses: A Lake District licensee, Alan Piper, has written a letter to the Daily Mail calling for a cut in VAT to French levels to save his business from collapse. He wrote: “Get VAT off my back for a year and my long-established inn, The Sun in the Lake District, will survive. Drop it to the same rate as a German hotel or a French restaurant – and I’ll be booking a holiday.  Keep it at 20 per cent and I’ll go under.” He faces a £18,000 VAT bill for his most recent quarter despite a trading loss of £5,000.  Local MP Tim Farron says he is “shocked and horrified” by the licensee’s predicament. He has urged Business Secretary Vince Cable to “introduce the VAT break that has been established for hospitality businesses in France”.

Company news: 

Enterprise Inns near midway point of top-end disposals: Enterprise Inns expects to complete the sale of top-end pubs by September 2013. The company has sold 82 so far in small packages or individually, raising £98m.  Chief executive Ted Tuppen told Morning Briefing that he expected no more than 100 more will be sold with a few of these already at exchange-of-contract stage. Buyers of pubs so far have included regional brewers and The Restaurant Group, which acquired five of its Enterprise freeholds. Sitting single-site tenants have bought around ten per cent of the 82 sold. Enterprise Inns was originally looking to sell sites for between 12 and 14 times its own earnings - but has achieved an average multiple at the  top end of 14 times. Tuppen added: “We got off with a nice kick-start from the Fuller’s deal (at the start of 2012).” Geof Collyer, analyst at Deutsche Bank, said: “Year-to-date, 121 bottom end pubs have been sold for an average per pub of £215,000, whilst the programme to sell off a limited number of top-end pubs specifically to reduce bank debt has resulted in average proceeds per pub of £1,200,000.”

Date set for first Project Artisan opening: Leicestershire brewer Everards is to open its first Project Artisan site – an evolution of its Project William venture with micro-brewers - at a site in Birmingham’s Stirchley area in mid-September. Project Artisan looks to install local food and drink businesses – such as bakers, chocolatiers and butchers - in Everards pubs. Everards will invest £250,000 into converting a former pool table supply shop into Stirchley Village Store and Bakery. The venue will serve as an artisan bakery, co-operative food store, cookery school and craft beer outlet. It will be overseen by Tom Baker, a former NHS dietician who set up Loaf, a commercial maker of artisan bread, a few years ago.

Little Chef starts “Charlie’s family” Treasure Hunt: Little Chef has launched a Treasure Hunt marketing campaign through August that invites customers to discover the name of mascot Charlie’s family members, who have “come to work at Little Chef over the summer”. Customers who collect the names of three of Charlie’s relations from three Little Chef restaurants can enter a prize draw by filling out a postcard (given out at restaurants) to win a family holiday for four to Disneyland, Paris, iPads and a family meal every month for a year. There are also six Little Chef badges to collect, given out free to every entrant.  

Loungers boss – operations-manager-to-site ratios “definitely coming down” in the industry: Loungers managing director Alex Reilley, whose company has an operations manager to site ratio of one-to-five, has reported that ratios in the sector are “definitely coming down”. The company, which is set to grow to 26 sites by the end of this month, has five operations managers and is currently recruiting a sixth. Reilley said: “Asking around, ratios are definitely coming down. We like our operations managers to be in and out of our sites all the time. Call it operational paranoia, but we like to know as much as we can about what’s happening in units.” He added that he thought the danger of traditional industry average ratios is that area managers spend three-quarters of their time driving around.  Loungers devolves human resources and training responsibilities to its operations Managers.

Swindon restaurant penalised over staff member posting reviews on other restaurants: Swindon hotel and restaurant Hotel 20 Twenty has been penalised by TripAdvisor after a staff member posted a critical review on a competitor. The venue sacked the member of staff but has seen its ranking on TripAdvisor in the locality drop from number one to 80. A spokesman for TripAdvisor said: “In the case of (this restaurant), we identified violations by a number of individuals associated with the business. We sent the owner multiple communications warning them about this, yet the activity persisted. In accordance with our policies we applied a red badge to protect consumers. It’s our top priority to ensure the content we feature is authentic and we dedicate significant time and resources to that end, including a host of over 25 sophisticated filters, a team of detectives, and our community of over 56 million users who help us police reviews. If an owner feels they’ve been subjected to an unfair review, we urge them to contact us immediately. They can report the review through the site or, if they are unsure about how to do this or have any other queries, they can call our dedicated freephone UK customer care line. Every single report of suspicious content undergoes a detailed investigation by our content integrity specialists, and if a review is found to be in breach of our guidelines, it will be removed from the site.”

Innventure amends d’Arrys name after Greene King move: Innventure, the six-strong pub operator led by former Mitchells & Butlers executive Chris Gerard, is to refer to its original d’Arrys site in Cambridge as “d’Arrys Original” going forward. The move comes after Greene King adopted the d’Arrys name for a new premium food-led trading format it is rolling out. Innventure opened the first d’Arry’s Cookhouse and Wine Shop in Cambridge in 2007 on the site of a Greene King leased pub. The venue is a premium pub/restaurant blend with a strong emphasis on wine. The d’Arry's name is a reference to Francis d’Arenberg Osborn, universally known as d’Arry, who began producing highly regarded wines at the family-owned d’Arenburg vineyard in Australia’s McLaren Vale area. Greene King liked Innventure’s Cambridge concept so much that it bought the rights to use it nationally. The company opened its first d’Arry's with Innventure’s support at The Cart and Horse in Kings Worthy, Hampshire in 2008. Now Greene King is using d’Arrys as the umbrella term for its premium country pub formulation. Early sites for the format are The Swan in Pangbourne and The Greyhound in Finchampstead. Industry experts believe Greene King is seeking to create a premium country dining experience that sits alongside its Realpubs format in London in terms of market position. Meanwhile, Innventure still owns and operates the original Cambridge site – as well as the rights to the and domain names. A source close to Innventure said: “d’Arrys in Cambridge is still flourishing and we thought we’d reinforce its pioneering credentials by referring to it as d’Arrys Original from now on, not least because d’Arrys Original is the business’s best-selling d’Arenberg wine.”

Gordon Ramsay Kitchen Nightmare site comes on the market: The Priory Bar and Restaurant in Haywards Heath, which featured in an episode of Ramsay’s Kitchen Nightmares in 2007, has come on the market through agent Christie + Co. The venue, which was the subject of interest from JD Wetherspoon a few years ago, has 7,400 square foot of trading space and is to be offered on a negotiable lease and free-of-tie basis with offers invited on rent.

Marston’s re-opens Talardy Hotel: Midlands based brewer and retailer Marston’s has re-opened the Talardy Hotel in St Asaph this week, creating 45 jobs. The pub restaurant now offers 11 bedrooms and a landscaped garden. The venue had been in the hands of Liverpool-based administrator Grant Thornton, who struggled to find a buyer for 18 months.

Classic Carvery opening tops 2,000 covers a week: The first Classic Carvery site opened by Enterprise Inns is selling more than 2,000 meals a week on average. The Star Inn at Winscombe, North Somerset, which is selling carvery meals for £3.89 to adults and £3.49 to children, has been building business week-by-week since it opened – last week was its best week so far with 2,123 covers and takings of £14,000. Chief executive Ted Tuppen said: “It’s going very, very well.” Classic Carvery is an extension of Project Beacon in which Enterprise takes more operational control of pubs. 

Diageo boss becomes UK business ambassador for food and drink: Paul Walsh, chief executive of Diageo, has become business ambassador for the food and drink industries. Business secretary Dr Vince Cable said: “The retail and food and drink sectors are major contributors to the UK economy. Retailers employ almost three million people, and food & drink is our single largest manufacturing sector – worth approximately £25 billion a year. Government is committed to working closely with firms in these sectors to stimulate growth and encourage new investment opportunities.”

Mitchells & Butlers ordered to pay sacked employee £12,000: Mitchells & Butlers (M&B) has been ordered to reinstate a sacked assistant manager at a Worcester pub and pay him more than £12,000 compensation after the pub’s manager, who was his boss and his wife, campaigned to get his job back. Simon Jennings was dismissed by M&B for allegedly falsifying stock accounts at the Lyppard Grange pub in Warndon Villages, Birmingham Employment Tribunal was told. Tribunal Judge John Goodier said Jennings had failed to adequately carry out the stock accountancy because of laziness but there had been no financial gain. He said Jennings had been unfairly dismissed.
Brasserie Blanc to open in St Albans later this month: Brasserie Blanc will open in St Albans’ Verulam Road later this month. Ahead of the opening, Raymond Blanc has undertaken a tour of local food producers. He said: "My job as a chef is to help the farmer reconnect with his craft. There is good produce around here. It is so important for these crafts to be kept in our villages and towns. If we lose our crafts we will have to import it.”

Dunkin’ Donuts eyes return to UK: Dunkin’ Donuts is planning a return to the UK. The brand pulled out of the UK in the mid-1990s. President Nigel Travis told The Daily Telegraph: “We think it is a great time. We can get in at a difficult time and build up.”

City Pub Company to re-open Oxford site next month: City Pub Company, the EIS company led by Clive Watson and David Bruce, will re-open a pub in Oxford next month. The pub, which has been closed for a year, is to receive a £225,000 refurbishment. The St Aldate’s Tavern has been leased from its owner Merton College to City, which now has six pubs. John Gloag, estates bursar at the college, which also owns the Turf Tavern, in Holywell Street, said: “We have spent about £100,000 on bringing the place up to a high structural standard.”

Admiral landlord to invest £100,000 to create a brewery: Businessman Peter Fowler plans to invest £100,000 on his Admiral Taverns pub, The Shoulder of Mutton in Wantage to create a brewery and letting bedrooms. He has already invested £250,000 in the pub since he took it over two years ago. He said: “Good pubs will survive and the reason they will survive is because people are social beasts and they do like to relax with people outside the family.”

Punch Taverns community pub prospers: A Punch Taverns pub that has been operated by 30 regulars from the community for two years is to expand. Plans have been submitted to build a 30-cover conservatory at The Hope in Carshalton, which is run by the 30 regulars on a 20-year lease.  Licensee Roger Molyneux said: "It’s been better than we expected. It has certainly outstripped the business plan. I think it's down to having good beer, good staff, and good customers.”

SA Brain’s wins retrospective planning consent to Coffee #1 opening:  SA Brain’s has won planning consent retrospectively to open a Coffee #1 site on a former Peacocks site in Tewkesbury High Street. The move comes despite opposition from other coffee shop owners in Tewkesbury, who were angry that the coffee shop opened up last month without getting permission first.

Propel Diary:

Man cave gets active: The latest logical development of the “breastaurant” segment – Hooters, Tilted Kilt et al – comes from Twin Peaks, which refers to its retail offer as a “man cave”. Its Las Vegas opening, occupying 14,200 square foot, will feature a three-storey climbing wall.   Chief executive Randy Dewitt said: “We’re going to operate quite a bit differently because of the rock-climbing wall. We’re designing it so it looks like there are two side-by-side mountain peaks that go all the way up, 39 feet high. We’ll operate what we’re calling the “Twin Peaks Challenge.” Friends can get competitive, so we’re hoping people will challenge each other to race. We’re putting buzzers at the tops of the peaks. The first climber to reach the top hits the buzzer and it will light up and declare the winner. There will be some grand prizes that probably will include a T-shirt and a pitcher of beer.” Sounds as exhausting as watching the Olympics.

Empty seats? A pub manager would sort it: Orchid chief executive Rufus Hall was among those scandalised by the empty seats in the first week of the Olympics. Hall popped along to the gymnastics and noted that vacant perches were “not just any spare seats but the best seats in the house”. Warming to his theme, he added: “These seats are reserved for foreign diplomats who just don’t turn up (the Olympic ‘family’ get five per cent of all seats, the best seats).” Keen to find a solution, Hall nominates his manager Tina from the Bostin Fittle. “(She) would have a standby queue for local kids.”

He’s popped to Iceland: The month of August traditionally finds many folk taking a well-deserved break – and this August it’s likely more people have decided to make an escape than average. Diary’s prize for the most vivid out-of-office message goes to Hall & Woodhouse’s retail director David Hoare who tells folk:  “I'm in Iceland (no Tesco jokes) eating smoked puffin, wallowing in thermals, and talking to geezers until 13 August."

Regulars take Whiting and Hammond gold in four days: Whiting and Hammond offered a £25 meal voucher for regulars who visit all seven of its pubs. Regulars Justin Lok and Simon Philpott wasted no time in taking up the challenge. Simon reported: “Seven pubs, four days, 350 miles in three cars, eight main courses, seven sweets, four starters & many excellent beers & wines (we took it in turns to drive). Great idea, we've had a good laugh and driven some good A & B roads.” Could this be turned into some sort of Olympic sport? It’s odds-on Team GB would excel.

God’s own constituency: Pub trade firebrand Greg Mulholland MP is having a good Olympics with a considerable number of medalists, including the Brownlee brothers who excelled in the Triathalon, hailing from his patch. Triumphantly, he tweeted this week: “My constituency of Leeds North West is 32nd in the London 2012 Medals Table ahead of Spain, Switzerland, Mexico and Belgium.” 

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