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Morning Briefing for pub, restaurant and food wervice operators

Mon 13th Aug 2012 - InnBrighton, Meantime and Jamie’s Italian

Story of the day:

Collyer – Premier Inn is upping its game: Deutsche Bank analyst Geof Collyer has noted that Whitbread is trialing a host of improvements to amenity level at its Premier Inns business. The recently-opened Premier Inn in Leicester Square has better bathroom design, flat screen TVs and better wardrobe sets with built-in vanity mirrors. Collyer said: “Overall, we would suggest that the new layouts are much more female-friendly. The Leicester Square site is also experimenting with a ‘floating room’ module, which effectively makes the room virtually sound-proof. This is ideal for family hotels where children can be isolated from external noise. (Family rooms are generally 25 per cent of a hotel’s room stock). The room ‘sits’ on the equivalent of a set of dampers that absorb all the external vibrations – ideal for city centre hotels like Leicester Square which has a nightclub next door or hotels on noisy thoroughfares. The group sees this development as potentially offering opportunities for development that may not have been seen as feasible before. Self-service check-in machines were introduced a year or two back and are now standard in most of the bigger sites. Leicester Square was also trailing what to us looked like a giant iPad that allowed access to a whole range of guest services and facilities, something akin to an electronic concierge service - including on-line check-in and boarding pass printing for airlines. There is also 30 minutes of free Wi-Fi each day. Along with a number of other hotels in the group, the Leicester Square site is experimenting with a smaller, more intimate food and beverage offering that is not only more efficient, but the cafe is also being used as a meeting place during the day, generating more revenue.” Collyer reports that “customer experience” scores, which last year amounted to 814,000 online responses found 66 per cent of guests voted Premier Inn ‘10 out of 10’ or ‘9 out of 10’. The year before, the percentage was 61 per cent.

Industry news:

Date set for ALMR Autumn debate: The Association of Licensed Multiple Retailers (ALMR) will hold its Autumn debate on 4 October at Albert Hall, Nottingham. Four operators will debate the relative merits of discounting and premiumisation, particularly the increasing impact of “voucher culture”. The evening will conclude with a retail inspection of Nottingham’s innovative late-night sector, which has been leading the way on partnership working and best practice schemes. 

US sales just ahead in July: Nation’s Restaurant News has reported like-for-like sales in July, as measured by Black Box Intelligence, were up 0.8 per cent while footfall fell by one per cent. A spokesman for Black Box stated: “Our predictions of a soft month were unfortunately correct. July started out strong but faltered later on. In June, like-for-like sales rose 1.4 per cent while footfall decreased 0.8 per cent.”

Allegra – market to grow to be worth £52bn this year: A report by market survey firm Allegra Strategies has found the UK informal eating out market will grow by around three per cent this year to be worth £52bn by the end of the year. According to Allegra's Eating Out in the UK 2012 report, sector sales will to grow to £65bn by 2017 at a compound annual growth rate (CGAR) of 4.9 per cent. The report states the 226,350 outlet-strong sector is dominated by fast food chains, with Subway leading expansion at 134 new stores, followed by Domino’s UK with 102 new sites.

Wendy’s – breakfast trials not producing margins: US restaurant chain Wendy’s has reported that its breakfast trials are not producing the margins needs despite five years of work in the area. Chief executive Emil Brolick said: “We’ve made significant progress operationally, yet our breakfast economic model is not producing the results we need across a full spectrum of restaurants. We have more work to do, and in particular, around economics.”

Head of Steam boss make late-night levy plea: Tony Brookes, who runs the Head of Steam pub chain, has pleaded with north east councils not to impose the proposed late-night levy on licensees, saying it would be another nail in the coffin of the traditional English pub. Brookes told the Northern Echo: “The problem is pre-loading on cheap supermarket booze at home in an unregulated environment, before going out to the pubs and clubs. Any financial penalty aimed at cutting binge drinking should therefore be targeted at supermarkets. But most supermarkets do not sell alcohol after midnight so pubs would suffer and supermarkets would get off scot-free. These measures are really dangerous and are potentially another nail in the coffin of the traditional English pub. Lots of pubs are hanging on by their fingernails, and having to pay £1,000 extra a year will force many to close.”

Punch’s Hobbit pub holds legal fees fundraising party: The Hobbit, the Punch Taverns pub in Southampton at the centre of a copyright row with a US movie company, has held a fundraising party to help pay its legal fees. The pub, which has traded at The Hobbit for 20 years, was threatened with legal action by Hollywood Lord of the Rings film firm the Saul Zaentz Company (SZC) in March. It later offered to resolve the dispute over the pub's name and decor by licensing it to use JRR Tolkien brands for a nominal fee. But wrangling over the small print of the deal is continuing – and legal fees mount. Landlady Stella Roberts said: “We are very frustrated. We're living in limbo here. We just want the whole thing finished.”

ALMR – how was trade in the second week of the Olympics?: The Association of Licensed Multiple Retailer is conducting an anonymous survey on how trade was affected by the second week of the Olympics. Operators can take part by clicking through the following link:

Company news:

InnBrighton picks up fourth London site: InnBrighton, the 50-strong multiple led by Gary Pettet and Gavin George, has acquired its fourth site in London after taking a new free-of-tie lease on a site in Battersea. The Bellevue, which for many years was called The Greyhound, is located in the part-pedestrianised Battersea High Street, a road that has been the subject of considerable upgrading by Wandsworth Borough Council in recent years. Said chief executive Gavin George: “The variety, vibrancy and buzz of the area around Clapham Junction has fascinated me ever since I lived there after graduating. The proliferation of bars and cafes in Northcote Road is testament to the potential of the area, and there seems to be a keenness to develop Battersea High Street in a similar way. The Bellevue presents an exciting opportunity for InnBrighton to add to the diversity of this developing area.” Last month, Innbrighton secured a lease on The Clarendon in Newington Green, to add to earlier acquisitions in East Dulwich and Hackney. Commenting on the expansion programme, chairman Gary Pettet said: “These are exciting times for InnBrighton as we build up an estate of quality pubs in London and Brighton that reflect the needs of our customers for places that are stimulating, interesting and, most of all, fun. A refurbished and repositioned Bellevue promises to be all these things, and a great addition to our estate.” InnBrighton plans to reopen The Bellevue in mid to late October after an investment of approximately £300,000.

JD Wetherspoon to open surf-themed bar in Newquay tomorrow: Managed operator JD Wetherspoon will open its new surf-themed bar, The Cribbar, in Newquay tomorrow. The £2m venue is the chain's second pub in Newquay, joining the Towan Blystra, on Cliff Road, and will be run under the Lloyds No 1 brand. It has one of the longest bars in the South West at 16 metres. The pub's designers enjoyed acclaim with the Jamie Oliver-inspired Fifteen Cornwall restaurant and worked with Newquay's surfing community on the building.

Clifton Pubs sells Bristol site: Clifton Pubs has sold its Alma Taverns and Theatre site in Bristol through agent Christie + Co. New tenant James Dunn has plans to develop the Alma Tavern with a refurbishment. Meanwhile, The Bristol Cider House in the city has been bought by regional operator Euphorium Bakers, which have experienced tenants lined-up. Formerly known as The Surrey Wine Vaults, The Bristol Cider House was sold off an asking price of £275,000 on behalf of the Jarvis family, who had run the pub since 2009 and have sold in order to concentrate on other interests. Nicholas Calfe, director of Christie + Co’s Bristol Office, said: “The Bristol pub market is strong, with pubs in popular and affluent areas such as Clifton, Gloucester Road and the centre fairing very well in the current climate.”

New coffee shop brand to roast beans on site: An Essex father-and-son team are planning to open a chain of coffee shops with a difference – they will roast coffee beans on site. Adrian and Steven Newbury launched AJ's Coffee House in Chelmsford after deciding there was a gap in the market for fresh-roasted coffee. Adrian said: "When I was on holiday in 2010 I met an American called Frank Cella, he told me about his plans to open a chain of coffee shops with a difference. His words were 'you gotta serve the most amazing coffee, dude, that means the freshest beans, to do that you gotta roast beans on site'. I thought I don't know of anyone in the UK that does that. And the vision of our coffee house was born”.

Mitchells & Butlers’ Premium Country Dining Group manager loses compensation claim: The former general manager of a Premium Country Dining Group pub has lost his claim for unfair dismissal. An employment tribunal decided that Guy Gavillet, who ran The Cock Inn at Wishaw, near Birmingham, had failed to carry out stock checks at the pub, after discrepancies were uncovered, with the regularity management had requested. The tribunal heard the general manager carried out seven of the 24 required.

Meantime Brewery reports swing into profit: Meantime Brewery, the Greenwich operator that recruited former Miller Brands UK chief executive Nick Miller as its chief executive last September, has reported a pre-tax profit of £189,980 in the year to 31 December 2011 – it lost £608,227 the year before. Ebitda was £545,336 in 2011. Turnover grew 38.5 per cent to £6,120,899 from £4,419,444 the year before. The company, which has two pubs, has increased its brewing capacity five-fold to 125,000 hectolitres. Meantime funded its capacity growth programme with a £2.5m share issue. The company stated that it will be raising additional share capital to fund the expansion of the company. 

Walkabout operator completes latest investment: Walkabout operator Intertain has completed the latest stage in its investment programme with the opening of Maluko – a four room venue on Albion Street in Leeds city centre. The result of a £500,000 redesign and rebrand of a former Bar Risa, Maluko is described as a versatile and multifunctional venue that boasts a Tiki Lounge, Beach Bar, Cabin Room and Club Room. The opening of Maluko follows the successful refurbishments this calendar year of the Intertain group’s Walkabout bars in Watford, Hanley, Liverpool and Temple. This takes the total number of major redevelopments completed by Intertain to nine. Chief executive John Leslie said: “We’re very excited about the opening of Maluko as it’s the first time we have opened this style of venue. So far our refurbishment programme has shown great returns on investment and we’re confident that Maluko will further this success.”

Jamie’s Italian pays £690,790 royalties to Jamie Oliver’s company as profits increase by 55 per cent: Jamie’s Italian’s the restaurant chain run by Simon Blagden, has reported that pre-tax profit hit £7,225,726 in the year to 1 January 2012 as turnover jumped 51 per cent to £72,022,225. Ebitda for the year was £11,059,947. The company, which has 30 sites, opened nine new restaurants in 2011 and plans at least six this year – St Albans, York, Manchester, Norwich, Gatwick and Edinburgh sites have already opened and “trading above expectations”. Capital expenditure in 2011 was £18,587,658. The company stated: “Going forward, the company is well placed to continue its profitable expansion. The company has a robust business model, distinct market positions and funding in place. The company’s aim is to continue to strengthen its market positions and deliver long-term and sustainable, profitable growth.” Franchised rights to the brand have been sold in Dubai, Australia, New Zealand, Russia and Ireland. The company has £17,450,000 of borrowings. Royalties of £690,790 paid to Jamie Oliver Enterprises in the year, up from £474,336 the year before. Jamie’s Italian sites are understood to have the largest average weekly turnover in the sector - £50,000 per week net. The company opened its first deli venue at its Bath opening last month, with customers able to buy everything from olive oil to mozzarella used by the restaurant. 

Starbucks offers two-for-one in London: Starbucks has partnered The London Evening Standard to offer its readers a two-for-one offer on drinks. The cut-out voucher offered readers a “free handcrafted drink when buying another at full price”.

Travelodge considers CVA: The owners of Travelodge are considering a Company Voluntary Arrangement (CVA) to cope with its debt pile, according to The Daily Telegraph. A fresh injection of equity is another option being considered. Travelodge makes profit of around £55m on turnover of £370m but has an unsustainable level of debt.

Shilling Group plans to double in size: Michael McGuigan is aiming to double the size of his Scotland-based pub operation The Shilling Group. The company, founded in 2003, operates six bars in Edinburgh, and McGuigan said: “Recession can bring some opportunities. We are focused on trying to find that next unit. We have ambitious plans as a young company.” His latest acquisition, The Fountain in Fountainbridge was acquired from R&L, part of the former pub estate of Robert Tchenguiz.

Profits double at Caledonian Heritable: Businessman Kevin Doyle Caledonian Heritable has reported profits more than doubled to £5m in the year to 31 October 2011 – profits were £2.2m the year before. Turnover rose to £39.5m, with the pub and nightclub part of the business growing turnover to £24.4m from £23.1m the year before. Doyle said: “Our leisure side of the business is going very well in a tough environment.”

Cornish publicans double up: Stuart and Anna Eddy have opened their second site – a restaurant called The Square at Porthleven. The couple already operate The Victoria Inn near St Michael’s Mount. The Square opened on Porthleven harbour last week and offers simple British classics.

Brewdog plans partnership deal in Stockholm: Brewer and retailer Brewdog is set to open its first site abroad – a partnership deal planned for Stockholm. Brewdog has not released further details on the deal.

Hall – a mood of optimism seems to have arrived: Orchid Pub Company chief executive Rufus Hall has reported detecting a mood of optimism in the country. Writing in his blog, he states: “Is this where it all changes? Is this when the mood of Britain finally lifts from doom and gloom? Is it just me or is everybody a little happier right now?” He added: “Despite everybody still being glued to Olympic TV at home sales are up this week and we’re finally reaping the benefits of our amazing ‘Get Set For Summer’ efforts. Britain’s medal frenzy is just what we needed to blow away the seemingly never-ending miserable news of 2012. Everybody is definitely a lot happier (check out Orchid's Facebook, a staggering 92.6 per cent increase on activity since the start of the Olympics!)”

Harvester launches free ice cream promotion: Harvester, the 202-stong brand owned by Mitchells & Butlers, has taken national newspaper advertising to promote a free ice cream with every main meal promotion. The promotion is presented in the form of a cut-out voucher also offering £1 off any dessert and combined with a data-gathering exercise – redeemable vouchers require a customer’s e-mail address. 

Little Chef offers free kids meals in partnership with The Sun: Little Chef, the roadside restaurant chain owned by R Capital, has partnered with The Sun to offer free kids’ meals. The cut-out voucher appeared in The Sun on Friday and is valid for the rest of August. 

Amber Taverns hits 80 sites: Amber Taverns has opened two more sites - The Queens in Leyland and The Station in Nelson, both in Lancashire - to take the number of trading sites to 80, with another three developments in the pipeline. The Queens was opened on Thursday evening after a five-week development and investment of £225,000. The Station, Nelson was closed for four weeks while an investment of £245,000 was undertaken. The site was a former JD Wetherspoon venue that went into administration under Dukedom.

TGI Friday’s opens flagship Manchester site: TGI Friday’s has opened its flagship site at the historic Royal Exchange in Manchester, creating 140 jobs. The venue has the largest Friday’s bars in the world and offers 429 covers. It also hosts a Friday’s first – a master mixology bar. The bar is serviced exclusively by Friday’s Master bartenders – the best of the best – and features a range of exciting can’t-get-anywhere-else cocktails. Darrell Wade, TGI Friday’s UK commercial director said: “The Royal Exchange really is a brilliant location for one of the most innovative Friday’s in the UK. The opening has gone down incredibly well with Manchester locals and our team members have been rushed off their feet during the opening days. We put a huge amount of effort into the venue to create something special for the people of Manchester and we’re really pleased that this has been yet another successful opening for Friday’s.”

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