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Morning Briefing for pub, restaurant and food wervice operators

Thu 30th Aug 2012 - Wetherspoon, Prezzo and Tavistock

Story of the Day:

Analysts divided on Domino’s European move: Two senior leisure sector analysts are divided on yesterday’s move by Domino’s UK to buy the master franchise rights in Switzerland and acquire an option to buy the rights in Austria. Simon French, of Panmure Gordon, said: “Guidance is for a £500,000 loss from the Swiss business in 2012 with a positive contribution from 2014. We think this acquisition introduces additional complexity and risk into what had recently been a straightforward UK rollout story with excess cash returned to shareholders via share buybacks. The most interesting aspect of this acquisition, in our view, is the option to acquire the Master Franchise Agreement for Austria, which would be complementary to its fledgling German business. We reiterate our Sell recommendation and 350p target price.” Douglas Jack, of house broker Numis, which has a target price of 600p for the shares, said: “Domino’s could be in a position to open 110-120 stores per annum from 2014, a big increase on the 58 stores that opened last year. For the UK alone, we forecast an earnings Compound Annual Growth Rate (CAGR) of 17 per cent to 2020, largely driven by an expansion CAGR of 6.4 per cent per annum. These combined deals could raise the expansion CAGR to 10.6 per annum and have a material impact on the company's long-term growth and cash flow profile.” Domino’s chief executive Lance Batchelor said: "On completion we will hold the master franchises for a total of seven European countries - out of a total Domino's global business of 73 international markets. This gives us terrific diversity within the business and a significant increase in the potential number of new stores we can open. This acquisition is another step on our continuing growth path."

Industry News:

ALMR Autumn debate tickets go on sale: Tickets for the Association of Licensed Multiple Retailers (ALMR) autumn debate, which takes place on Thursday 4 October in Nottingham, have gone on sale. The autumn debate will consider pricing strategies in the on trade. Four operators will debate the pros and cons of premiumisation versus everyday good value and the impact of the “voucher culture” and its affect on food-led businesses. The event will also provide up-to-date information on many of the most controversial issues facing the trade, as well as offering unique networking opportunities with the broadest cross-section of the industry. The afternoon will open with a review of legislative, consumer and business trends, collating and analysing market research and political intelligence. A spokesman said: “With Nottingham leading the way in partnership working and managing the late-night economy, the event will conclude with an update on EMROs, levies, minimum pricing and PPL – before an evening retail inspection to see how those on the front line are responding.” E-mail Matt Steinhofel on to book a ticket.

Strada survey finds three-quarters of Britons say they are eating healthily: Restaurant chain Strada has commissioned a survey to discover how far Britons shared Italians’ relaxed attitude to life and deep appreciation of food as part of its campaign to champion the Mediterranean diet. It found the majority of respondents (78 per cent) claimed to eat a healthy, balanced diet and, despite the perception that Britons favour grab-and-go, on-the-hoof grazing, an overwhelming 79 per cent insisted they always took the time to sit down to eat their meals. More than 60 per cent of consumers surveyed ate three meals a day, while a heartening 72 per cent of respondents answered a resounding ‘no’ to ever being ‘constantly on a diet’, a ‘yo-yo dieter’ or ‘into fad diets’.  Dining out with friends or family tended to occur once a week (46 per cent) or once a month (34 per cent). Dogs – a common sight in Italian restaurants – are also making an appearance on the British dining-out scene, with 50 per cent of consumers saying they occasionally take their four-legged friends out to eat with them. 

Massachusetts town throws out Tilted Kilt application: An application to open a Tilted Kilt pub, where barmaids wear short tartan skirts, has been rejected in the town of Quincy, Masachusetts. Deacon Paul Lewis of St. John The Baptist Church, which is near where Tilted Kilt wanted to open in a former Outback Steakhouse, said: “It’s like putting a pork chop in front of a mosque. It’s counter to what we teach. It’s counter to what we believe. This is a distortion of why God gave us sex.”

Subway saw largest US franchise growth in 2011: Sandwich chain Subway saw the largest net increase in franchise units in the US in 2011, with 872 more units added to its 100 per cent franchised system to grow to 24,722 units in total, according to foodservice research firm Technomic.  Jack in the Box took the number two spot adding 342 units to its total, a 27.4 per cent increase from 2010. In third position was Little Caesars, opening 300 additional units to total nearly 3,000 franchise outlets in its system.

New York investigates energy drinks: The New York attorney general has subpoenaed three large makers of energy drinks as part of an inquiry into whether the companies are misleading consumers about how much caffeine the drinks contain and the health risks they could pose. The investigation is looking at whether the companies — Monster Beverage, PepsiCo and Living Essentials — violated federal law in promoting the drinks as dietary supplements rather than as foods, which are regulated more strictly. The move comes in the wake of New York Mayor Michael Bloomberg proposal to ban large carbonated drinks in the city, which is due to go before the city's health commission next month.
Author launches new pub website: A new website,, has been launched by award-winning author and publisher Philip Porter to support and promote British pubs and breweries. “The site is not just a way of finding pubs,” said Porter. “There are pub videos, programmes about pubs, beer, wine, breweries – anything that is relevant, informative, interesting and fun. We have an advanced search function, Google maps, Street View, contact details, GPS with distances, distances from stations, blogs, events listings, pub trivia, Facebook and Twitter feeds and more - all designed to engage with pub customers and tourists. And we have a load of new ideas up our sleeves!"

Company News:

JD Wetherspoon buys historic Blyth cinema: Managed operator JD Wetherspoon has bought the landmark Wallaw cinema in Blyth, Northumberland, which has stood empty since 2004, for £225,000. The Grade II-listed art deco building is considered the best surviving work of the firm Percy Lindsay Browne, which designed many cinemas in the North East. The Wallaw, named after its owner Walter Lawson, opened on November 16, 1937, and continued in use as a cinema until it closed. The 18,552 square foot, four-storey property is close to the junction with Waterloo Road, Blyth’s principal shopping street – Blyth has a population of 35,818. Agent for the sale was Knight Frank who completed the sale on behalf of Eagle Road Services, a subsidiary of Blyth-based Ferguson Transport.

CM Hospitality takes on second Punch Taverns pub in same village; takes on Masterchef runner-up: CM Hospitality, the award-winning operator of three pubs led by Craig and Ian Minto, has taken on its second Punch Taverns pub within a year. The company, which now has four pubs in total, has re-opened the Craven Heifer in Addingham, Wharfedale, after a £225,000 investment from Punch – all its beers will come from within a ten-mile radius of the pub and last year’s Masterchef runner-up Tom Rennolds will run the kitchen. It also runs Punch’s Fleece in Addingham which re-opened last December and where the Mintos plan to create a cookery school. Said Minto: “Where The Fleece specialises in traditional pub grub, The Craven Heifer will serve Yorkshire fare of the finest quality. Our new head chef Tom Rennolds is highly-skilled and I have every confidence that he can help us re-position The Craven Heifer as a destination food pub.” The Craven Heifer also offers rooms, which are named after famous Yorkshire personalities. The transformation of Punch’s two pubs in Addingham is a remarkable turnaround from just 11 months ago when both were closed.

Rhymney Brewery to open real ale bar: Rhymney Brewery has won planning consent to convert the former Choices video store in Roath, Cardiff into a real ale bar. The ale bar – selling the brewery’s own cask ales – will be aimed at the over 40s as a “traditional” local pub, and a meeting room on the first floor will be available for local community organisations. The application was granted on condition that it only has effect while the licensee is Rhymney Brewery and is a pub with a ‘real ale’ character, that a CCTV system be installed, and an incident book of refusals is kept.

Costa Coffee launches Facebook app to reward customer loyalty: Costa Coffee is expanding its Coffee Club loyalty scheme with a Facebook app to provide more rewards to customers that engage with the brand on the social platform. The new app, launching this week, will allow the three million members of its Coffee Club to log into their account, update details and check balances to see what they are eligible to buy with the loyalty points they have earned. It will use the Facebook app to offer customers the chance to earn bonus points by purchasing products at certain times. As part of its introductory offer, Costa will offer one million points to members through competitions.

Former M&B manager plans third Wakefield site: M&S Leisure owner Kevin Spencer, who previously ran Flares and Reflex sites for Mitchells & Butlers, is planning his third site in Wakefield.  Spencer, whose company runs Boomerangs and Mex Bar, has applied to turn the former Mumbai Curry restaurant building on Wakefield’s Westgate into a nightclub called Tequila Nightclub 

New microbrewery opens in Lancashire: A new microbrewery has been set up in a small village in north Lancashire. The Old School Brewery in Warton, near Carnforth, aims to produce up to 200 casks of high quality beer every week to sell to businesses in the local area. This new brewery has received more than £50,000 from the Rural Development Programme for England, which is administered by Lancashire County Council.

Boutique hotel owner to re-open iconic Cheltenham pub: Artist and hotelier Marchalla De Angelis is to re-open the iconic Rotunda pub in Cheltenham this Friday. The freehold was snapped up for £725,000 by De Angelis, who is known for her award-winning design skills; she has her own line of wallpaper. She oversaw the development of high rated boutique hotel Cotswolds88 in Painswick, between Stroud and Cheltenham.

Terence Conran to expand Lutyens offer: Restaurant veteran Terence Conran is to expand the offer at his Lutyens restaurant in the City of London by  launching two new bars next month. The Lutyens Wine Bar will open on 3 September and the Lutyens Cocktail Bar on 27 September. Lutyens opened in 2009 in the former Reuters building on Fleet Street as the second venture from Sir Terence Conran and Peter Prescott, who also run the Boundary in Shoreditch.

Greene King plans Hungry Horse for Llanelli: Suffolk-based Grene King has exchanged contracts to build a new Hungry Horse in the largest unit at Llanelli's new East Gate development. The new opening means the £26 million East Gate is now more than 90 per cent let or reserved, with only two months until the official opening.

Tavistock Leisure invests £500,000 on turning pub into an Indian restaurant: Leading north east operator Tavistock Leisure has invested £500,000 turning The Plough, at Haswell, in East Durham, into a 90-seat Indian restaurant. The Mumbai Exemplary Indian Cuisine @ Haswell Plough, while owned and refurbished by Tavistock Leisure, will be run under tenancy by brothers Sabir, Thaher and Nasir Ahmed, who have operated a number of successful restaurants and takeaways in the North East. Tavistock managing director Mark Hird said: “We have noticed there is a definite trend in cities like Leeds and Bradford, which are renowned for the quality of their Indian food, for restaurants to move out of the city centre and to become more of a destination that people are happy to travel to.”

Byron founder steps away from running company twitter feed: Better burger concept Byron founder Tom Byng has stepped away from running the company twitter feed, @byronhamburgers, after amassing 7,000 followers and making 9,500 tweets – the feed will now be overseen by a colleague. Byng will still be tweeting on @tombyng.

Prezzo signs to open Chimichanga in New Brighton, Merseyside: Prezzo is to open a second site, a Chimichanga, in the Merseyside seaside resort of New Brighton’s Marine Point development.  The Chimichanga will operate in a 3,500 square foot unit next to the unit where Prezzo is already open. Danny Hynd, director of Neptune Investments, said: "All of the operators within the development are reporting very strong trade at Marine Point, despite the bad weather and the difficult economic climate. It tells us we've got the product right, which is why Prezzo were happy to commit to bringing their Chimichanga brand to the scheme. We've only got two waterside units remaining and the rest of the development is trading strongly so we're enjoying firm interest in the last available space." Also trading at the scheme is a Greene King Hungry Horse, which has “completely exceeded expectations” and a Starbucks. JD Wetherspoon has also applied to open a new pub near Marine Point.

Bubbledogs opens in London: Bubbledogs, a restaurant serving only hot dogs and champagne, opened yesterday on London’s Charlotte Street. It is owned by James Knappett, the former sous chef at The Ledbury,  and his wife Sandia Chang. Bubbledogs has a menu of ten hot dogs served on traditional steamed buns. A “Kitchen Table” with room for 19 diners is at the back of the venue.

Former Starbucks UK boss to leave Jumeirah restaurants: Phil Broad, the managing director of Jumeirah Restaurants, has resigned from his position to join InterContinental Hotels Group after four years in the job – he leaves the company in November this year. Jumeriah Restaurants, the branded restaurant division arm of Dubai’s Jumeirah Group, operates The Noodle House, Urbano, Sana Bonta, AllFreshCo, Rice + Spice and The Flaming Revolution. The company also has the regional rights to develop Caprice Holdings brands such as Rivington Grill, Scott’s, Annabel’s and The Ivy. Broad was focused on the expansion of The Noodle House brand. Prior to joining Jumeirah Group, Broad was Starbucks Coffee Company UK managing director.  

Fownes Brewery plans to brew in Dudley pub outbuildings: The Fownes Brewing Company has applied for planning consent to turn outbuildings at the Jolly Crispin pub in Clarence Street, Dudley, into a microbrewery. It is hoped the brewery will be sending out up to 1,500 pints a week by the end of 2013. Fownes has been launched by brothers Tom and James Fownes, both of Sedgley. It will be a separate business to the pub but will supply it with ale.

Punch Taverns to invest £145,000 in Manchester bar: Punch Taverns is to make a co-investment of £145,000 in The Atlas, in Manchester’s Deansgate area with licensees Mark and Elaine Wrigley. The rear beer garden will have a retractable canopy and 6ft wood-burning chimney. The venue will stock 50 types of gin and serve food for the first time.

Miso opens third Pier 1 site: London-based noodles concept Miso has opened a third site under its Pier 1 fish & chips brand in Richmond. The company, led by Olgun Remzi, has converted its Miso site in Richmond into its Pier 1 format and is now looking at further sites in the capital to roll out the brand following success in Camden and Haymarket under the fish & chips brand. The group appointed Davis Coffer Lyons' at the end of 2010 to dispose of three Miso sites as part of a strategy to consolidate its portfolio and expand into other regions.

Jaipur Spice invest £160,000 on refurbishment of York’s biggest Indian restaurant: Seven-strong York-based Indian and Greek restaurant company Jaipur Spice has invested £160,000 on a refurbishment of York’s largest Indian restaurant, its flagship Jaipur Spice site which has 300 covers. General manager Emraz Zaman said: "We are trying to raise the bar and aim towards what’s already out there in London." The first site launched by the company was The Indian Ocean, which was opened in the city in 1986.

Fuller’s re-names Greenwich pub for the Paralympics: Fuller’s has changed the name of The Pilot Inn in Greenwich to The Wheelchair Basketballer for the duration of the games, broadcasting live matches and providing guests with statistics and local information and affordable food.  The pub is 300 metres from the North Greenwich Arena, home to the majority of wheelchair basketball matches. British Wheelchair Basketball chief executive Charlie Bethel said: “The Wheelchair Basketballer provides us with the perfect venue to host our own and visiting wheelchair basketball fans in a fantastic environment. Fuller’s have been a receptive support, fully understanding and supporting our vision.”

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