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Morning Briefing for pub, restaurant and food wervice operators

Mon 20th Aug 2012 - Knife and Fork, Shepherd Neame and Luminar

Story of the day: launches to accredit pubs, restaurant and coffee shops with Wi-Fi: A new accreditation scheme,, is to launch to allow consumers to find pubs, restaurants and coffee shops offering Wi-Fi. Founder Stephen Findlay, who previously spent ten years in the venture capital industry focused on technology businesses, told Morning Briefing: “The primary focus is on attracting customers who would like to use a venue to access Wi-Fi, work or meet someone for a coffee. We partner with pubs, restaurants and coffee shops to market their venues and promote their social media. For consumers, is a location-led search and sharing site. It is complimentary to their existing online activities, and provides an easy-to-use platform to identify relevant venues - there are over 100,000 suitable venues in the UK. recognises some key trends: increased flexible working; the greater use of mobile internet devices; and the Pub is the Hub theme - extending the uses of pubs for social benefit.” The first few operators are currently being signed up and the business’s website will launch for consumers on 1 September. 

Industry news: 

Retail footfall recovered in the West End in second week of the Olympics: Retail footfall in the West End recovered in the second week of The Olympics, enjoying a 10.6 per cent year-on-year rise. Across the country, footfall dropped by 0.2 per cent due to concerns about transport and Britons staying at home to watch the Olympics. John Lewis said sales grew 14.9 per cent year-on-year in the week to 11 August.

Somerset town agrees £1.50 minimum price: Licensed premises in the Somerset town of Weston have agreed to set a minimum price of £1.50 for 4.2 per cent abv products. The move comes after North Somerset Council’s licensing team called a meeting at Weston Town Hall because of concerns about drinks promotions. Shots that are 25 per cent proof or less will be sold for no less than £1. Any pint above 4.2 per cent proof must be sold for at least £2. Harry Mousoulou, owner of Club Vision in Richmond Street, told the local newspaper: “Basically it is illegal to price-fix, so the council couldn’t tell the bars what the price is going to be. There was an informal agreement that no-one would sell drinks for cheaper than £1.50. No-one wants to do 99p offers because no-one would make any money. The reason there were offers was because one place started offering them and others had to try and compete.”

Survey finds low level of interest in hospitality jobs among the young: A survey by has found nearly half – 43 per cent - of 1,000 people between the ages of 16 and 24 “would not consider hospitality as a career option”. Two in five in the survey said they felt working in hospitality would be “boring and repetitive” while nearly 29 per cent said they thought the industry was “not forward-looking enough”. Young workers in the north were more receptive with six out of ten saying they would consider a hospitality job compared to five in ten of southerners. One reason youngsters reported being reluctant to pursue a career in hospitality is that they felt the industry “would not use their technology skills and their knowledge of the internet and social media”.

Voters – “nanny state” should not be telling us what to eat and drink: A YouGov poll has found that nearly half of voters want ministers to stop telling them what to eat and drink. A total of 48 per cent of those surveyed reported that they thought the “nanny state” should not give advice on food and alcohol consumption. The opposition was slightly higher among women at 49 per cent compared with 45 per cent of men.

CVAs on the rise among hotel groups: Research by accountant Wilkins Kennedy has found the use of Company Voluntary Agreements (CVAs) to renegotiate rents has risen sharply. The research found a ten per cent jump to 769 in the year to June. The hotel sector has seen the largest rise in CVAs with Travelodge and eight other hotel groups using the process in the last six months. Wilkins Kennedy partner Anthony Cork said: “Landlords feel that too much pain in a CVA is taken by them and not enough by the other creditors such as the banks or the company itself. Retailers and hotel operators argue that most CVAs arise because rents are so inflexible so a retailer will find it almost impossible to reduce their property overheads.”

Company news:

Luminar to re-open first investment site at the end August: Luminar is to re-open its first refurbished site at the end of August. The company will re-open its York site, Kuda to include the Mambo Lounge chill-out room and a Tiki bar after a £750,000 refurbishment. Chief executive Peter Marks told Morning Briefing: “This is a long successful unit that had just got to the end of its life in its former guise. We have secured two of the best student nights in the city and are confident that this will become a successful business once more. Like much of the estate, only refurbishment will get the trade back to its former levels of trading.” The company is also on site in Aberdeen and Edinburgh, and it starts work on its site in Crawley today. It is doing smaller projects in five other venues over the coming weeks.

TLC Inns places site on the market after planning decision: TLC Inns, the six-strong operator led by Steve Haslam and Jo Drain, has placed the freehold of its family dining Catherine Wheel site in the village of Albury, Hertfordshire, on the market. The decision comes after local planners turned down a retrospective planning application for a £30,000 children’s play area at the pub and voted to take enforcement action. Haslam told Morning Briefing: “We have decided to sell the pub because it no longer fits our family dining model. We are now unlikely to ever open another village pub after what amounts to a disgraceful decision by the planning authority last week. The authority chose to ignore the local councillor, the parish council and its own officers, who all supported the play area. We have invested to keep a local amenity open and no support is offered. One councillor even suggested that we convert the pub into a gastro-pub. Is it any wonder ten village pubs a week are closing? The trade bodies need to lobby the government on this issue – local authority planning decisions seem to be inconsistent with the principle of sustainable local communities.” The venue, which has been extensively refurbished in the past 12 months, is expected to hit turnover in the region of £650,000 excluding VAT in its second full year of trading. The pub, which sits on a 1.36 acre plot, is on the market for £900,000 with Everard Cole. 

Loungers plans most northerly opening in Liverpool: Loungers, the café bar chain headed by Alex Reilley and backed by Piper Private Equity, has secured a site in Liverpool – the most northerly place it operates. The company is open a Cosy Club in Salisbury this week followed by Arcado Lounge in Christchurch later in the month. A flagship Cosy Club site will open in Cardiff in mid-November. Reilley told Morning Briefing: “We are delighted to have secured a site in the landmark Mann Island scheme in Liverpool. We are currently very active in identifying sites in the north west and we anticipate the Liverpool site will be the first of a number of openings in the region over the next couple of years”. 

Collyer – Spirit will be watching Premier Inn’s negotiation with landlord to reduce rent: Geof Collyer, leisure analyst with Deutsche Bank, has pointed out that Spirit Pub Company will “watching very closely the progress of discussions at Travelodge regarding lower rent potential at 109 hotels”. Travelodge is looking to sell 49 sites to other operators and re-negotiate rent on a further 109 sites after a debt for equity deal was unveiled on Friday. Collyer added: “We see this as an attempt to persuade Prestbury to reduce its rents on the sale & leaseback contracts signed by Permira prior to selling the operating company for 15x EBITDA back in 2006. Spirit has very low fixed charge cover (1.5x) partly because a previous generation of management did the same thing with Prestbury for £500m of pubs back in 2004. Around 100 of the 200 pubs in that sale and leaseback deal have since returned to Spirit through reversionary leases (as the buyers have either gone bust or gone through pre-pack administrations) and are costing the company an estimated £32m a year in rents (half of the total rent bill).”

Knife and Fork Food lines up third pub: Knife and Food Fork, the south Wales company that operates two pubs and a restaurant, is opening its third pub. The company, which launched in 2008, has taken a 20-year lease of a SA Brain’s pub, The Pilot, overlooking Penarth Marina and Cardiff Bay – it will re-open on 1 September after a refurbishment. The company, headed by Seamus Murphy, already operates The Old Swan Inn in Llantwit Major and The Conway in Pontcanna, with has a Michelin Guide entry. Its restaurant site is Wood Brasserie in Cardiff Bay. Murphy said: “When we found The Pilot, with its amazing location and incredible views, it was an opportunity that was too good to pass up. We are intent on rolling out our core concept of good food, good wine and a great atmosphere that everyone can feel comfortable in.”

Marston’s applies to build a pub in Hunstanton, Norfolk: Midlands based brewer and retailers Marston’s has applied to build a new pub in the costal resort of Hunstanton, Norfolk. The company wants to develop the site in Southend Road, near a Tesco supermarket. The site is vacant and has been used as an overflow car park during peak periods. The site follows a new-build Marston’s pub in Kings Lynn and would be the first chain development on the north Norfolk coast.

Jamie Oliver to open first site in the north east: Jamie’s Italian is to open its first site in the north east with a site planned for Newcastle’s Monument Mall, which is undergoing a £15m revamp. The new restaurant is understood to be filling the ground floor unit formerly occupied by Boots the Chemist.

Prezzo partners The Sunday Times in two-for-one deal: Italian restaurant chain Prezzo has partnered The Sunday Times to offer diners a two-for-one deal until Friday of this week. The offer appeared on the front of yesterday’s newspaper and is available via a downloadable voucher.

Collyer – Travelodge restructuring should benefit Premier Inn: Deutsche Bank leisure analyst Geof Collyer has argued that a smaller Travelodge should benefit Whitbread’s Premier Inn brand. He said: “Travelodge has only been given until the end 2017 to pay off (its) remaining £285m of debt, so we see the new owners seeking a more sensible, possibly less aggressive stance on pricing to rebuild the hotel chain’s cashflows. As part of the new ownership, there will be £55m of much-needed catch-up capital expenditure to refurbish around one-third of the hotels, with about ten per cent seemingly destined to be handed back to landlords or other operators. The new owners will also seek to renegotiate rents on a further 20 per cent. A smaller, more rational Travelodge should be better for Whitbread’s Premier Inn over time.”

Punch Taverns invests £200,000 in Red Lion, Paulton: Punch Taverns has invested £200,000 in The Red Lion, Paulton, near Bristol. The pub, run by licenses William and Elmarie Hyams, has a stronger focus on food, with a new catering kitchen and improved seating area. A new food menu has been created featuring a selection of freshly made home-cooked dishes using locally sourced ingredients. The pub will also host some themed food nights such as beer and a burger on Monday, traditional pub classics on Tuesday, curry night on Wednesday and home-cooked roasts on Sunday.

Pitcher joins Barracuda: Managed operator Barracuda has appointed Rob Pitcher to the newly-created role of operations and human resources director. Pitcher joins the company after spells with Scottish & Newcastle Retail, Spirit Group and most recently Town and City Pub Company. The appointment of Pitcher follows the announcement of the departure of Richard Stringer, the operations director at Barracuda. Of the appointment, chief executive Roger Moxham said: “His knowledge and passion for the industry, combined with the importance that he places on motivating and recruiting the best people in the business, will help us deliver a customer driven culture for our pubs and bars.”

Sophie Ellis Bextor’s family eyes bigger restaurant: The family of singer Sophie Ellis Bextor have put their Alfriston restaurant on the market and are eyeing up a bigger Eastbourne seafront premises. Sophie’s dad Robin Bextor said: “It would be perfect for a Masterchef-type person who is looking to start off in the restaurant business. It is a great place with wonderful views and we have had lots of success there.” Bextor said he was now looking to open a bigger site and had his eye on a premises located on Eastbourne seafront.

Rollo – little to drive Wetherspoon shares until there’s visibility on margin trough: Jamie Rollo, leisure analyst with Morgan Stanley, has argued that there’s little to drive the share price of JD Wetherspoon up until there’s more visibility on when margins will trough. Ahead of full year results on 14 September, Rollo said: “The company has already provided a fourth quarter trading update, where it gave total year-to-date sales growth (+9.2 per cent) and its expected second half margin (8.5 per cent) so we see minimal scope for surprises. We expect modest EBIT growth (up four per cent) driven by 40 new pubs and the 53rd week, partly offset by a circa four per cent increase in operating costs, leading to solid Earnings Per Share growth (+14 per cent). With the shares trading on 12x 2013 P/E, in line with its average multiple over the last three years, and margins in decline for the last two years, we see little to drive the shares higher until there is more visibility on when operating margins will trough.”

Shepherd Neame backs down to allow Harvey’s to be sold in Sussex pub: Kent-based Shepherd Neame has backed down to allow rival Harvey’s to be sold at its Best Beech Inn pub in Wadhurst, East Sussex. New landlord Spence Goddard made it a pre-condition of taking on the pub, owned by Shepherd Neame since 2007. Harvey's spokesman Bill Inman said: “Shepherd Neame have recognised that in Sussex our beer can make a real difference to the success of a pub and at the end of the day all brewers are keen to see the British pub being successful and serving its local customers. We suspect that if we owned a pub in the heartlands of the Sheps' trading area that we would be under pressure to stock their Spitfire, and that is the joy of having genuinely regional products which meet the palates of the local drinker.” Harvey’s sells its beer to a total of four Shepherd Neame pubs. Meanwhile, Shepherd Neame is to shutter its Mechanics Arms site in West Street, Faversham.

Bar Baa to open eleventh site in Leeds: Bar Baa, the Merseyside multiple headed by Elaine Clarke, is to open its eleventh site in Leeds at the end of October in Millenium Square. Baa Bar, which launched in Liverpool in 1991, operates late-night city centre venues in Liverpool, Manchester and Nottingham.

Son of Led Zeppelin lead singer launches Beavertown Brewery: Logan Plant, the son of Led Zeppelin lead singer Robert Plant, has launched the Beavertown Brewery at Duke’s Brew & Que in Hackney, east London. Plant Jnr, the former lead singer of Sons of Albion, told The Daily Telegraph: “To me London was – and is now becoming again – a serious brewing capital. The heritage is huge and stimulated the beer world as we know it. The pale ales, IPAs, stouts and porters in particular were created in and for London and its people. It’s important because it’s a dying industry that is being invigorated and brought back to life, and by God is it kicking and screaming.”

Jimmy Spices to open Birmingham’s biggest restaurant: Multi-cuisine buffet restaurant chain Jimmy Spices, founded ten years ago, is to open Birmingham’s biggest restaurant on Wednesday – the venue will open on Broad Street with 500 covers. Jimmy Spices offers food from the Far East, Indian Sub-Continent, Middle East, Europe and the Americas on the same buffet with each cuisine having its own dedicated chef. The chain has eight sites, with four in the Birmingham area.

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