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Morning Briefing for pub, restaurant and food wervice operators

Fri 17th Aug 2012 - Knightwood, Tokyo Industries and Costa

Story of the day:

Atmosphere Bars and Clubs bans marketing material leading on price point: Atmosphere Bars and Club, the 26-strong late-night business that emerged from the administration of 3D Entertainment, has moved to ban marketing material that leads on price. The company, which is led by Paul Harbottle and backed by private equity firm Sun European Partners, has moved sales into positive territory in its latest quarter and produced Ebitda in excess of £400,000 – a £350,000 increase on the same quarter the year before. Writing for today’s Propel Friday Opinion, Harbottle said: “It’s taken a while, but sales are now growing and profits are improving. Our philosophy is ‘entertainment over price’. We want all our staff to treat our customers as if they were guests in their own home. I have banned all marketing material that leads with a price point. Breaking the sell-it-cheap cycle is the only way that the whole sector will survive in the long term. People want value-for-money - they don’t want cheap drinks in a grotty bar with crap service.” Harbottle reports that Atmosphere has adopted the pricing approach of cinemas and budget airlines. He said: “Our marketing approach caters for different groups of customers on different days of the week. Much like cinemas and Easyjet, off-peak or midweek sessions are better value-for-money, with the weekends and late night being more premium. The doom-mongers who see the late-night sector as terminally challenged can’t see beyond the last five years. I compare our situation with cinemas 30 years ago. Look at them now. Collectively, to survive, the sector needs to broaden its thinking, enhance the offer and develop the new ‘popcorn’.” (See separate Friday Opinion e-mail for the full Paul Harbottle article.)

Industry news:

Bookings open for the ALMR Christmas lunch: Bookings are now open for the popular Association of Licensed Multiple Retailers (ALMR) Christmas Lunch, the largest social event in the industry calendar. The lunch will be from 11.30am on Thursday 13 December at Old Billingsgate in London. It will open with a champagne reception and will see the announcement of the winners of the 2012 ALMR Ops Awards. This year’s lunch is the finale to the ALMR’s 20th Anniversary year. Strategic affairs director Kate Nicholls said: “Demand is extremely high, with nearly half of the 1,200 tickets sold already - so be sure to reserve a table or places as soon as possible.”

Property company – London property prices hit new high: The market for prime London foodservice sites seems to have hit a new high after two Michelin-starred restaurateur Alvin Leung spend £1m to acquire and refurbish his new London site. UK leisure property firm Cedar Dean Gilmarc said prices in London were hitting record levels. Leung is reported to have spent almost £500,000 for the lease of his property in Mill Street, Mayfair, and is understood to be spending another £500,000 to fit it out. Morris Greenberg, of UK leisure property specialists, Cedar Dean Gilmarc, said: “Britain is the place to be and despite the low trading during the Olympics, the London restaurant business is simply booming. If you have a restaurant in the capital it says you are at the top and leases are hitting record levels because of unprecedented interest.”

Multi-site operator – ban on all Temporary Event Notices is excessive: The boss of a multi-site operator in Newcastle, Eats Beats and Beer, has criticised the local authority for placing a blanket ban on all Temporary Event Notices (TENs). The local authority is to block all TENs in the Ouseburn area of Newcastle because it is a ‘Cumulative Impact Order’ area. Eats Beats and Beer boss Darren Goodwin said: “We and other operators in the area have used many TENs since the 2005 licensing reform. Although we have never had any complaints about our premises and have always been respected as a responsible retailer, we have been penalised under this new legislation. Our pubs are music-led and TENs are crucial for featured events. Experienced operators, pub companies and promoters are passionately doing everything they can to improve areas of the licensed trade and fight their way out of difficult trading conditions. It’s a shame that local authorities are not embracing or supporting the hard work that creative entrepreneurs are trying to bring to local communities.” Nick Bish, chief executive of the ALMR, said: “We’re very concerned by the action taken in Newcastle and would query the legal foundation and impact on business viability, jobs and the loss of a community amenity.”

Bournemouth receives £2m for coastal tourism academy: The government will provide a £2m grant for Europe’s first national coastal tourism academy. Designed and delivered by Bournemouth University’s School of Tourism, the work will focus on customer care and provide access to tourism data. Once established, the academy will be rolled out nationally and offered to other resorts through virtual training alongside face-to-face interaction.

Peel Hunt’s Hickman leaves: Peel Hunt leisure analyst Paul Hickman is leaving the broker after 15 years covering the sector. Hickman, who is viewed as one of the top leisure analysts in the sector, told Morning Briefing: “The sector is overcrowded on the sell side, and for macro-economic reasons that everyone’s familiar with, it’s not front of mind for many institutional investors right now.” Hickman is understood to be working on a number of projects and can be contacted on

US restaurant sales to be flat for 18 months: Research company NPD Group has forecast that US restaurant sales will be flat until the end of 2013. The forecast is a revision of an earlier one that predicted a one per cent rise in both 2012 and 2013.

Cheesecake Factory makes international debut: US brand The Cheesecake Factory, which achieves sales of around £7m a site at its 170 locations in the US, has made its international debut, opening in Dubai under a license agreement with Alshaya Trading Company. The restaurant, occupying 13,851 square feet with 300 seats, is located opposite the Dubai Aquarium. Alshaya holds the rights to develop the brand in the UK and Europe. The brand was linked for a short while with a former Union Market site in Fulham earlier this year and is understood to be looking for the right first venue in the UK.

Company news:

Knightwood Leisure joins the ALMR: Knightwood Leisure, the Salisbury-based three-strong operator of late-night venues head by Amanda Newbery, has joined the Association of Licensed Multiple Retailers (ALMR). Chief executive Nick Bish said: “The late-night sector has particular challenges and above all has to demonstrate the highest standards of licensed retail night-in, night-out. Knightwood Leisure does just that and it’s great for the ALMR to be representing such good companies alongside other leading-edge operators in our industry.” Newbery said: “I could see the ALMR is doing a lot of work in our area of the market. In particular, it’s been working very hard in the area of PPL and I’ve been able to use the information coming out of the ALMR in several presentations. The PPL increase, had it have gone through, would have meant we would have had to add £2 to our door prices.” In the past year, the ALMR has been boosted by the addition of major managed companies such as Spirit Pub Company, TGI Friday’s, JD Wetherspoon, Mitchells & Butlers, Amber Taverns, LT Pub Management and Intertain as well as a host of up-and-coming smaller multiples such as Absolute Pubs and Noble Inns. The ALMR also absorbed the late-night trade body Beda in May.

Fiveeightzero to rename Keston Lodge; looking to buy the freehold: Fiveeightzero, the London operator headed by Dan Crouch, is planning to change its Keston Lodge pub’s name to The Salt Yard as it hosts chef Ben Spalding on a six month residency to give him experience before he runs his own restaurant. The Keston Lodge is a Mitchells & Butlers freehold where the company has just negotiated to go free-of-tie and is looking to buy the freehold. Fiveeightzero has four pubs in London and runs eight more sites in the regions in a joint venture with M&B. Crouch told Morning Briefing: “The sites outside of London are holding up very well.” Crouch also operates the Beacons Festival in Skipton Yorkshire, which runs this weekend, and the Field Day festivals in Victoria Park. Fiveeightzero’s other three London pubs are The Owl and the Pussycat, The Defectors Weld and The Fellow.

Travelodge to shed ten per cent of its hotels: Budget hotel chain Travelodge is to shed ten per cent of its 500 sites in a re-structure that will see lenders write off almost £720m of debt in a debt for equity swap, according to The Telegraph. Travelodge will attempt to transfer 49 sites to other operators and is in discussions with landlords of 109 hotels over a rent reduction. Travelodge is also expected to unveil details of a creditors voluntary agreement (CVA).

Forward opens Bakehouse St Albans: Former Warner Leisure Hotels boss Jim Forward has opened Bakehouse St Albans. Bakehouse St Albans is an artisan bakery and restaurant offering high quality coffee and homemade cakes. Forward, who left Warner Leisure in June of last year, also worked as a brand development manager with Bass in the 1990s and a strategy manager with Sainsbury’s.

Tokyo Industries to open 23rd site next weekend: Tokyo Industries, led by Aaron Mellor, will open its 23rd nightclub, a £1.2m refit of The Tower Cinema in Hull called The Mansion House Club, during the August Bank Holiday. Mellor, a former architect, told Morning Briefing: “The building is epic - another gorgeous Grade II listed building; this time the 1914 built Tower Cinema next to the train station in Hull city centre. Hull is often forgotten as no one really passes through it but it has a massive student population and some of the wealthiest surrounding catchment areas of anywhere in the UK. I fell in love with this building the first time I was introduced to it. We’ve worked hard to maintain many of the buildings’ original features whilst delivering a super modern cutting-edge technology venue. We’ve added the best, bespoke, state-of-the-art sound system from Funktion One - think of the best home hi-fi sound system you’ve ever heard and then supersize it. The system looks as good as it sounds, standing eight foot tall it looks like a sonic assault weapon. There will also be a new twin level skydeck and outside bar.” Tokyo Industries also operates Digital clubs in Newcastle and Brighton, Tup Tup Palace in Newcastle and Factory in Manchester set in Tony Wilson’s former Factory Records head office.

Costa Coffee franchisees win Bristol planning appeal: A planning inspector has thrown out a move by the city council to take enforcement against two Costa Coffee sites in Bristol. Franchisee South West Coffee won an appeal against the city council, which claimed the company did not have the correct permission to operate its cafes in Gloucester Road and Whiteladies Road. Stuart Montgomery, of South West Coffee, appealed against the enforcement notice, claiming they were not in breach of any planning rules. Montgomery said: “The enforcement notice was not founded on valid planning reasons and we can now look forward to operating both shops, which we plan to develop into important social hubs for the community, where people of all ages and walks of life may meet, chat, drink coffee and relax amongst friends.”

Michael Parkinson’s son takes on second pub; forms new company Ned Pubs: Nick Parkinson, whose first pub, Fuller’s Royal Oak holds a Michelin star, has taken on a second pub with business partner and chef Dominic Chapman. They have a new business partner, Eric Newnham, with whom they have formed Ned Pubs. Their second pub is Brakspear’s Belgian Arms in Holyport, a Brakspear site. The aim is to create an affordable, accessible pub brand that can be rolled out.

Prezzo takes Manchester site: Italian restaurant chain Prezzo, advised by Restaurant Property, has taken a 4,300 square foot ground floor unit with a 300 square foot mezzanine at Resolution Property’s The Printworks leisure scheme in Manchester. Prezzo has taken a 25 year lease on the restaurant which is next to a Harvester pub. The rent was not disclosed but the quoted rent was £40 per square foot.

Former model Lauren Gregory opens second pub: A former model and PA to Brian Ferry, Lauren Gregory, has opened her second pub in Norwich, The Sir Garnet. “When the pub closed last year I couldn’t bear to see such a beautiful pub all boarded up and unloved,” said Gregory. “I wanted to breathe new life into the building while keeping it as a traditional market pub.” Gregory opened The Birdcage on Pottergate in the city six years ago, turning it into a place for creative, arty types and undiscovered talent – Ed Sheeran played there before he hit the big time. “The Sir Garnet is totally different to The Birdcage,” added Gregory. “It’s a back-to-basics kind of pub with locally brewed ales, locally sourced food with an emphasis on quality, not trendy brands. It was quite a lot of work to get the pub back on its feet and embracing a new age, but we’ve done it.”

YO! Sushi opens at Gatwick airport: YO! Sushi opened its 64th UK site at Gatwick Airport’s North Terminal yesterday – and its eleventh “on-the-go” opening. The opening follows soon after three openings at other transport hubs - Washington Union Station, Oslo Airport and London’s Waterloo Station. The opening also brings YO! Sushi’s “on-the-go” restaurant total to 11. Spencer Sheen, head of retail at Gatwick Airport, said: “The addition of YO! Sushi highlights our commitment to invigorating Gatwick and providing passengers with sought after dining options. As we continue to roll out our billion pound investment programme to transform the airport and provide modern facilities, passengers will benefit from a much wider range of choice between “food-on-the-go” outlets, relaxed coffee houses and high quality dining restaurants.’’ YO! Sushi chief executive Robin Rowland said: “As we continue to innovate our dishes and restaurant design, we have naturally expanded our on-the-go portfolio to locations like Gatwick Airport.”

Pub landlord plans bakery and shop after buying his freehold: Landlord Cameron Reid is planning to create a village shop and bakery after buying the freehold of his Punch Taverns pub. Cameron Reid, who has run The New Inn in Tholthorpe for the last five years with his wife Dionne, secured a £315,000 loan from Shawbrook Bank when Punch Taverns announced the freehold was up for sale. Now Cameron, who originally trained as a baker, plans to build a bakery and shop in the pub’s outbuildings.

Wadworth extends 6X Noble Rewards scheme: Wadworth Brewery has extended the 6X Noble Rewards scheme, offering publicans ongoing rewards for stocking and selling the beer, to publicans for a third year. Wadworth brand manager Christine Evers said: “Industry research, such as the Cask Ale Report, demonstrates that a large proportion of consumers are still seeking a beer they know and trust on the bar,” she said. “So by rewarding consistency we are supporting the pubs in maintaining a key brand rather than switching and changing with the passing trends.”

Regional hotelier buys Devon freehold out of administration: An unnamed regional hotelier has bought The Royal Oak Inn in Bigbury, in Devon’s South Hams Area of Outstanding Natural Beauty, out of administration. The pub, which has four letting bedrooms, has been sold off a guide price of £350,000 by agent Christie + Co.

Spirit wins employment tribunal: Spirit has won an employment tribunal case and clarified the grounds on which an employee can claim constructive dismissal. The employment tribunal found that the manager of an employee had behaved badly - he has rebuked the employee for taking time off when in fact it had been booked. The tribunal ruled that the behaviour was not so serious as to justify the employee leaving and that Spirit had dealt with the situation in a fair-minded way such that it prevented the matter escalating into a state of affairs that would have justified the employee leaving and claiming he was constructively dismissed. The Assamoi case is a reminder to employers that it is possible to prevent bad behaviour by a manager escalating into a constructive dismissal situation by taking steps after the bad behaviour to deal with matters fairly and promptly. 

SA Brain sponsors London Welsh to grow business outside of Wales: Brewer and retailer SA Brain has entered into a three-year shirt sponsorship deal with London Welsh RFC. London Welsh is moving this season to a new home at Oxford’s Kassam Stadium following its promotion to top flight rugby in the English Aviva Premiership – although it will play games in Europe’s Amlin Cup and some friendly matches at its historic Old Deer Park ground in Richmond, London. The deal includes rights for SA Brain beers to be sold at both Old Deer Park and the Kassam Stadium. The sponsorship deal is designed to grow the firm’s growing business outside of Wales – particularly in the sales of its beers in supermarkets.

Dragon James Caan lodges bids for last two Von Essen hotels: Former Dragon’s Den presenter James Caan has lodged two bids for former Von Essen hotels, according to Property Week. He’s bid £3m for Ston Easton Park in Somerset and £1.5m for the 24-bedroom Sharrow Bay in the Lake District. The two sites are the last remaining venues in the 27-strong Von Essen portfolio – it had debt of £295m secured by property that has sold for around £150m.

Pub People Company re-opens The Bridge in Sandiacre: Pub People Company, the 50-strong east Midlands multiple headed by Kevin Sammons, re-opened Punch Taverns’ The Bridge in Nottingham’s Sandiacre area last night after a joint investment. A four-week refurbishment has turned the pub into a value-dining community pub aimed at the family market. Pub People Company recently extended its relationship with Downing to add five freeholds to the estate. Pub People Company already runs seven Downing-owned pubs under management contract and a further five in joint ownership.

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