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Morning Briefing for pub, restaurant and food wervice operators

Tue 28th Aug 2012 - TGI Friday's, Loungers and Spirit

Story of the Day:

Delays see four TGI Friday’s openings slip into next year: Four of the eight openings TGI Friday’s has hoped to unveil in 2012 have now slipped into 2013 after delays. The company has already opened sites in Wembley and Manchester this year and will open in Halifax this week with a Jersey site to follow in November. But four sites that have been secured will now open in 2013 after licensing delays and problems linked to developing historic buildings. The Blackpool site will completed this year but too close to Christmas to recruit a team. Chief executive Karen Forrester told Morning Briefing: “The other three (openings planned for 2012) - Brighton, Liverpool and Glasgow Fort  - will also open in 2013 along with four others - which means we should be opening eight in total next year.” Meanwhile, the company has reported that the two weeks of the Olympics saw sales broadly in line with the company’s year-to-date sales growth trend, understood to be around eight per cent. “The West End was slightly down whilst stores near Olympic sites saw sales growth, with Stratford doubling and serving an amazing 14,045 guests in one week,” said Forrester. The TGI Friday’s opening in Manchester, featuring the biggest Friday’s bar in the world - 34 linear metres - and a separate master mixology bar upstairs, manned only by Master Bartenders, is trading above expectations. “Cocktails are making up 45 per cent of our drink sales throughout the restaurant which is fantastic – so far the favourite is strawberry popping candy margarita. Business is still great with restaurants continuing to hit record sales across the country.”

Industry News:

Leslau – investment decisions fraught with risk: Property magnate Nick Leslau, whose Prestbury investment vehicle undertook sale and leasebacks on 200 Spirit pubs in March 2004, has criticised the current investment environment. In his annual report to shareholders, he said: “The UK economy continues to face very serious challenges through a number of factors, including highly constrained credit availability, consistently weak consumer sentiment and the threat of the disintegration of the eurozone. Almost all market participants seem to be deferring investment decisions as the eurozone Damoclean Sword hangs high over everyone. Investment decisions are fraught with risk and the impact on the market is downward capital value movements in the majority of sectors.” 
Newcastle restaurants taste success with Restaurant Week: Newcastle restaurants have reported huge success with the launch of Restaurant Week, an idea borrowed from restaurants in New York. The event now takes place twice a year and has achieved “phenomenal” results. A total of 15,000 Restaurant Week vouchers were redeemed during January’s event, equivalent in face value to over £150,000 of business in participating restaurants. Restaurants taking part recorded an average 37.06 per cent  increase in business during the seven days of January’s Restaurant Week. The current initiative ran until Sunday, (August 26). Participating restaurants include the newly-opened Fat Buddha, Terry Laybourne’s award-winning 21 Group of restaurants, The Brasserie at Malmaison, The Living Room, Garden Kitchen, Pan Haggerty, Dabbawal, Blackfriars, Electric East and many others. Restaurants offer a £10-per-person meal deal and a premium £15 package.  Chef and restaurateur Terry Laybourne, of 21 Hospitality Group, said: “The week invites diners to try something a little different and often helps bring a new audience to our restaurants.”

David Lloyds Leisure seeks high street site alongside bars and restaurants: Fitness chain David Lloyd Leisure is to open three smaller high street fitness centres to be sited alongside bars, restaurants and shops, according to The Times. The first three openings, occupying 15,000 square foot sites, will be in Putney, Winchester and Central London.
Glasses-free 3D television to be launched: A glasses-free version of 3D being trialed across Europe by Beds and Bars and Intertain, at its Covent Garden site, is set to be launched next month. Boss of the Inventor Steam TV Networks Mathu Rajan said: “Everybody else in 3D is trying to trick your brain into seeing 3D when it is not there. That is not the approach we have taken. We have created an algorithm that mimics the way our natural eyes work. We use motion to produce the 3D and that is a radical concept. We call it Ultra-D because we don’t want to be associated with the other 3D systems. When you see Ultra-D, it is a lot easier to watch. There are no headaches, dizziness or blurriness. You can watch it for hours and hours.”
Beer duty escalator e-petition breaks through 90,000 signatures: The e-petition that aims to force a parliamentary debate on the beer duty escalator has broken through the 90,000 signatures barrier. The e-petition now needs fewer than 10,000 signatures to trigger a Commons debate.
Staffordshire planners reject two pub conversion schemes: Applications to change the use of two Staffordshire pubs, the Lion O Morfe, at Upper Farmcote, near Bridgnorth, and The Squirrel Inn, beside the old A53 at Wollerton, to housing have been turned down by planners. Councillors said they believed both of the buildings could still be used as pubs and to turn them into houses would be a loss of public facilities.

Company News:

Restaurant Group opens second Coast to Coast: Restaurant Group has opened its second Coast to Coast restaurant in the Gate, Newcastle. The opening comes after the successful launch of the first site in Brighton marina at the end of last year – the venue is taking £50,000 per week and is reported to be the busiest venue in the marina. The company reports interim results this Friday – JP Morgan Cazenove forecasts a 7.3 per cent rise in pre-tax profits to £26.2m, driven by wet weather boosting cinema-going and Restaurant Group’s sites on leisure and retail parks.  

Starbucks takes Little Chef roadside site in Scotland; pilots office coffee: Starbucks has submitted plans to West Dunbartonshire Council to transform the former Little Chef in Milton, Dumbarton, into a coffee house. The roadside diner, off the A82, closed in January this year – it sits in what one local councillor describes as the “gateway to the Highlands and islands”. Meanwhile, Starbucks is teaming up with Selecta, Europe's largest vending company, to pilot a Starbucks office coffee service in Switzerland beginning in September. The companies said the concept will offer Selecta's clients branded "self-service equipment" in three sizes -- a compact countertop version, midsized standalone model and a large standalone or integrated "coffee corner." Selecta provides office coffee services to more than 100,000 workplace locations in Europe and over 15,000 in Switzerland.
Loungers celebrates ten years: Loungers, the café bar concept led by Alex Reilley and backed by Piper Private Equity, celebrated the tenth anniversary of the opening of its first Bristol site yesterday. The company will open its 26th site on 5 September – Arcado Lounge in Christchurch. Reilley said: “Our first order was a lady who had a cappuccino - I remember watching her take every sip.” Last week, Morning Briefing reported that Loungers had lined up its first opening in the North West – a site in Liverpool’s Mann Island development. The company also has a site in the Wirral and two in Manchester lined-up. 
Moleface Pub Company signs up for fifth pub –a Punch Taverns site: Moleface Pub Company, the award-winning Nottingham-based company led by John Molnar and founded in 2007, is to open its fifth pub on 5 September. The new venue is The Chesterfield Pub and Kitchen in Bingham, a Punch Taverns site that will see a £300,000 investment from the pub company and £150,000 from Moleface. Molnar was former executive chef of the Bluu group of restaurants acquired by Marston’s in 2008 from Fat Cat Cage Group – Fat Cat founders Matt Saunders and Simon Patterson are directors of Moleface.
Rollo – M&B should benefit from London riots comparables: Jamie Rollo, leisure analyst at Morgan Stanley, has predicted Mitchells & Butlers fourth quarter results, due on or around 27 September, should benefit from lapping the London riots of August 2011, which cost the company £2m of sales. He said: “Weather has remained lacklustre, and industry indicators have not been strong. Despite this, the comparables contain the London civil unrest in 2011, which management estimated at around a £2m impact to sales, suggesting a tailwind of around 60 basis points for the nine-week period to be reported. The company needs just -0.7 per cent in the final 11 weeks of the year to hit our full year estimate of +1.4 per cent, and we see some small upside risks to our revenue estimates.” 
Spirit to convert Peacock Lodge, Lingfield to Fayre and Square: Spirit Pub Company will convert the Peacock Lodge pub in Lingfield, Surrey, currently trading as a Two for One, to its Fayre and Square format. The brand is currently at 131 pubs and the company has set a target of more than 250 eventually. Food mix is 61 per cent of turnover with an average of 1,600 covers a week and an average spend-per-head of £7. Meanwhile, Spirit is to spend £175,000 converting the Tudor Arms in Watford to its John Barras brand, with an opening scheduled for 20 September. Spirit has 136 John Barras pubs with food accounting for around 22 per cent of turnover – the brand sells an average of 500 covers a week with average spend-per-head of £5.  Spirit has stated that it is making minimal investment in the estate during the current quarter as it focuses on optimising performance. The company will provide a fourth quarter trading update on Tuesday 4 September
Little Chef to launch 11 smaller Little Chef Express sites: Little Chef, the roadside restaurant company owned by R Capital, is to launch 11 smaller Little Chef Express sites to focus on fast food delivery. The company is also launching free Wi-Fi and free baby food. Chairman Gaham Sims said: “The Little Chef of old had lost its way. Today the fightback is under way.”
UK private equity firm buys Japanese sushi chain: UK private equity firm Permira has bought the Japanese sushi chain Akindo Sushiro for £630m. The chain operates 335 restaurant and Permira believes it can be expanded to as many as 665. Asia boss Alex Emery said: “Leading restaurant brands in Japan can get to 1,000 sites easily so there is strong growth potential.” Of suggestions the brand could be brought to the UK, a source said: “Never say never.” According to Nation ‘s Restaurant News, Akindo Sushiro places fifth on its list of 25 brands with headquarters outside of the US. Its worldwide sales are $1.06bn and it had a sales growth rate of 11.01 per cent in the most recent year.  The estimated sales per site are $3.42m, which is more than three times higher than the next highest in the top five – Nando’s with sales of $1.07m per site.
Yum! Brands hopes to sell Pizza Hut UK by end of 2012; set target of doubling overseas opening rate:  Yum! Brands, the world’s second largest restaurant company with 14,000 restaurants outside the US, has told analysts it hopes to sell its UK Pizza Hut business by the end of 2012 – Leeds-based private equity business Endless is in exclusive talks to buy the business. Meanwhile, Yum! has indicated it plans to double net overseas opening to 1,000 sites a year, double its current net rate. Expansion will shift to emerging markets such as Russia and Africa. The company also reported that France and Germany have some of the highest average unit volumes in the world for KFC, despite having only a couple hundred stores in those markets and little or no television advertising.
JD Wetherspoon win planning go-ahead in Whitby: Managed operator JD Wetherspoon has won planning consent to develop the New Angel pub in Whitby into a pub and hotel. The venue has been closed since December 2010 and Wetherspoon has been given permission to create bedrooms on the third and fourth floors, in an area formerly known as the Assembly Rooms. The company has agreed to abandon plans for a pavement café.

Inception Group secures two new sites: Inception Group, the company headed by Charlie Gilkes and Duncan Stirling, has secured two new sites in the south London. The company, which runs Bars, Maggie’s and Bunga Bunga, turned over £5.2m last year.   
Ignite Group targets £30m turnover within three years; set for Hong Kong opening: Ignite Group, which owns the Bumpkin restaurant chain and Eclipse cocktail bars, aims to grow turnover three-fold in the three years to 2015, growing from the current £17m a year to £30m. Chief executive Matt Hermer told The Mail on Sunday: “We are hoping for ten to 20 new Bumpkin units in the next two to three years. We are looking for Eclipse sites internationally.” The company is planning to open a branch of its members-only nightclub Boujis in Hong Kong next month.  Hermer added: “In Hong Kong there is a good mixture of British expats and a fair amount of wealth. There will be live percussionists, Chinese ballet dancers and a stage for passing musicians. We plan to open another in the second half of next year but we would only do three or four around the world.”
McDonalds sales dwarf competitors: Nation’s Restaurant News has reported that McDonald’s system-wide sales at $85.94bn are currently nearly twice those of the top ten non US-based foodservice companies put together. The company’s sales are also twice those of its next biggest competitor – Yum!, which has total sales of $41.48bn. 
Ramsay fronts record four TV shows in the US in the “summer of Gordon”: Celebrity chef Gordon Ramsay is fronting an unprecedented four television shows for the US-based Fox network this summer.   "Hell's Kitchen" is holding steady on viewer numbers in its 10th season, while "Masterchef," has seen a ratings boost of almost 20 per cent versus last year. On 13 August his newest show, "Hotel Hell," began to air while the sixth season of "Kitchen Nightmares," will begin on 28 September.  Fox has described the wall-to-wall Ramsay programming as “the summer of Gordon”.
Greene King plans substantial repairs at Tewkesbury hotel: Greene King has submitted an application to undertake substantial structural repairs at the 24-bedroom 17th Century Bell Hotel in Church Street - just two years after a £340,000 refurbishment. The company has found that a wall at the back of the Bell Hotel is "severely degraded and in need of substantial intervention".

Businessman launches mobile coffee shop: A businessman has launched a mobile coffee shop in Croydon. Jimmy Hamilton runs his operation from a specially adapted tricycle which accommodates all his coffee-making equipment. He also has a policy of charging one price – £1.20 a cup – whatever the variety of coffee chosen. Hamilton turned to German manufacturers to construct him the bike frame, built the cart himself and installed the equipment.

Brewhouse on York launches at King’s Cross: A new boutique coffee shop, The Brewhouse on York, has opened its first site opposite London’s Kings Cross station. The venue has teamed up with Brighton bespoke roastery, Small Batch Coffee Company, to develop its own blend of  beans. The venue offers bread and pastries from artisan bakery “The FlourPot”, roast hams, homemade sausage rolls and seasonal patisserie.

Inventive Leisure fined £4,000 over weakened alcohol: Revolution vodka bar operator Inventive Leisure has been fined £4,035.16 after its York site was found to be selling seven bottles of whisky and vodka with weakened alcohol levels - it’s the first time the company has faced food standards charges. Defending Inventive, solicitor Anthony Lyons said a number of factors, including water seeping into bottles during cleaning and heat from a lighted back bar which caused alcohol evaporation, had led to the lower alcohol content than advertised – it was not a case of “watering down” the alcohol or swapping it for poorer products. He said the company had since spent hundreds of thousands of pounds improving stock-taking and introducing new measures to prevent this happening again. Meanwhile, Inventive is lining up its largest Revolucion de Cuba opening – its rum-based second brand – for a 15,000 square foot site in Manchester’s Penn Street. 

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