Propel Morning Briefing Mast Head CPL Learning Link Paul's Twitter Link Hobgoblin Banner
Morning Briefing Strap Line
Wed 3rd Oct 2012 - M&B, Black Sheep and Spudulike

Story of the day:

Mitchells & Butlers outlines leisure and retail park plans: Mitchells & Butlers (M&B) has told City analysts that it is targeting 200 leisure and retail parks in the UK that meet its site criteria but have no M&B brand currently. Analysts spent eight hours yesterday touring M&B pubs and were told that Harvester, Toby Carvery, Miller & Carter and Browns provided particular brand expansion opportunities. “Only one brand (Harvester) is of substantial scale – (there’s) opportunity for all brands to grow,” analysts were told. Marketing director Simon Cope reported that Harvester retail and leisure park sites were having a “halo effect” on the whole brand, increasing “brand awareness and image scores” and is providing an increased penetration among 18-34 year-olds. Steakhouse brand Miller and Carter is earning the highest “recommended” scores among M&B brands, Cope reported. Branded restaurants are forecast by Allegra to increase their market share from their current 22 per cent to 25.5 per cent by 2017. M&B now has a “park attractiveness score” for each target leisure and retail park, based on local population size, the daytime and evening reasons to visit, the park size, presence of competitors, plus the proximity and quality of competing parks. Analysts were provided with site takings at each of the six M&B sites they visited: The All Bar One in Reading, opened in March 2011, takes £24,000-a-week with food 37 per cent of takings; the Miller & Carter, opened in February 2012 in Reading’s Oracle Centre, takes £38,000 per week with food 72 per cent of the mix; the Browns, also in Oracle Centre and opened in December 2011, takes £35,000 per week with a 55 per cent food mix; The Bells of Ouzeley Harvester in Old Windsor, Berkshire takes £35,000 per week with an average food mix of 71 per cent; The Two Rivers Harvester in Two Rivers, Staines, opened in November 2010, takes £30,000 per week with food mix 79 per cent of the total; and The Engineer in Primrose Hill, converted from the franchise division to managed in November 2011, takes £26,000 per week. Average weekly take per site across the estate is currently £22,200.

M&B - consumer eating habits have changed in the past year: Mitchells & Butlers told analysts that there have been marked differences in consumer behaviour in the past year. Consumer usage has been robust with average frequency of visit actually improving. Frequency of visit per month for breakfast has increased from one to 1.7; lunch frequency of visit has increased from 4.1 to 4.5 per month and dinner frequency has increased from 2.4 to 2.7 per month. To sustain frequency, though, customers are trading down at lunch-time and up in on the casual evening occasion. Average spend has dropped at lunch from £7.34 in 2011 to £7.07 in 2012 while it’s increased in the dinner occasion from £13.11 to £14.37. Brand promiscuity has also increased in the last year with consumers moving from eating at seven to eight brands within the last six months. 

Charles Wells has the highest turnover in the UK for a privately owned family brewer: The Propel Info Hospitality Sector Turnover and Profits Blue Book ranks the 200 leading pub, restaurant and foodservice companies in the UK by turnover and profit, provides a five-year overview of performance and lists directors’ salaries. To buy a copy e-mail Jo Charity or Sharon Dickinson on or

Industry news:

Deloitte appointed to Waverley; Ooberstock emerges as potential bidder: Deloitte was appointed administrator for the collapsed wholesaler WaverleyTBS yesterday. Daniel Butters, leader of the restructuring services practice at Deloitte in the north east, said: “WaverleyTBS is a prominent business within its industry and we are in negotiations with a number of interested parties who are keen to acquire the company.” Booker and Matthew Clark have been named as potential bidders with Ooberstock, led by Arran Heal and chaired by Colin Pedrick, also tipped as a possible buyer. Industry analysts believe WaverleyTBS, which has £300m of sales in its most recent year, would provide Ooberstock with scale for its online platform.

Ikea wins consent for first UK restaurants and café development: Swedish furniture giant has won its first UK planning consent for a major mixed-use scheme to the south of the Olympic Park. The London Thames Gateway Development Corporation (LTGDC) has granted detailed planning permission for developer LandProp’s Strand East scheme – LandProp is Ikea’s property arm - to the south of Stratford High Street in London’s East End. Situated on a ten hectare site, the plans for the project include 1,200 new homes, appoximately 58,000 square metres of business and commercial space and a 350 bedroom hotel, as well as shops, restaurants and cafes.

Coca-Cola retains top position in 100 “best” brands table: Coca-Cola has retained the top spot in Interbrand’s 100 “best” brands in a list dominated by technology brands. Apple moved to second from eighth place last year, while Google (4) increased its brand value by 26 per cent and overtook Microsoft for the first time in the report’s 13-year history, according to Interbrand. Interbrand analyses the ways a brand “touches and benefits” an organisation from business performance, influencing customer choice and the strength of the brand to command a premium price.

Hospitality leaders call for standardised labeling: Mitchells & Butlers and Whitbread have called for an industry-wide approach to product labelling to meet new legislation. Food Service Director Group (FSDG), whose members include the two companies as well as supplies such as Unilever and Brakes, are suggesting the industry adopt a common approach to product information. New legislation will be introduced by the FSA at the end of 2014 that will require food businesses to provide allergy information on food sold unpackaged in pubs, restaurants, deli counters, bakeries and sandwich bars. There will also be changes to current legislation on labelling allergenic ingredients in pre-packed foods. In a new report, The Food Service Information Challenge, the group said it wanted a common approach to product traceability so that information between food manufacturers, operators and suppliers can be managed and shared more easily.

Deadline for Britvic and Barr tie-up to be extended: The deadline for the £1.4bn merger of Britvic and AG Barr is to be extended by three weeks as the two companies work on the finer details of the deal. One sticking point is whether the new company should be called Barr Britvic or Britvic Barr. Britvic shareholders would own 63 per cent on the merged company but there is concern that the finalised deal doesn’t look like a reverse takeover.

Company news:

Marston’s reports like-for-likes up 2.1 per cent; Peter Dalzell joins the board: Midlands based Marston’s has reported that its like-for-likes sales grew by 2.2 per cent for the year ended 29 September. Operating profits in its tenanted division are three per cent ahead. Own-brewed beer volumes were up by two per cent. Marston’s reported that its pub estate is worth £2bn, with the managed side up by £163m and the tenanted estate reduced in value by £186m. Meanwhile, Peter Dalzell, who oversees the pub estate, has become a main board director in the wake of Alistair Darby’s departure to become Mitchells & Butlers chief executive. Chief executive Ralph Findlay said: “We have been encouraged by the performance of all areas of our business this year despite the challenging consumer environment and the poor weather. Our continued focus on offering value for money to our customers together with high service and quality standards is appropriate for current market conditions, and is generating profitable growth with improved returns. The recent valuation exercise demonstrates the inherent quality of our pub estate and in particular highlights the significant value created by our new-build pub-restaurants.”

Black Sheep Brewery – “brewing golden goose is coughing badly”: Black Sheep Brewery, celebrating its twentieth anniversary, has argued that relentless tax increases is causing the “brewing golden goose to cough badly”. The company has reported turnover up from £18,354,219 in 2011 to £19,864,376 for the year to 31 March. Pre-tax profit edge up to £504,053 from £464,878 the year before. Chairman Paul Theakston said: “I must mention the burden of taxation. In times when the market is in decline, price increases are nigh on impossible to achieve and cost increases are relentless, the government sees fit to take more and more in tax. The brewing golden goose is choking and the sooner government recognises it and stops choking it with an excessive tax burden, the better. The same applies to fuel duty and VAT.” Theakston said that one benefit of the current trading environment for pubs is that “only the best will survive”. He said: “Therefore, the standard of pubs generally is improving.” Theakston said Black Sheep would not sell its beer at “little or no margin just for the sake of increasing volume”. He added: “We have controlled costs rigidly, constantly examining our overheads and making savings wherever possible, without compromising our beer quality or the integrity of our excellent employees. It is a reflection of the times that all that effort and good husbandry results in a similar profit performance to the previous year.” Black Sheep’s duty bill rose five per cent from £7.5m to £8.3m, a 44 per cent increase since 2008. Managing director Rob Theakston said: “This has to change as the industry can’t sustain increases at this level much longer.” Barrelage volumes rose 2.7 per cent in the year.

Frederic Robinson - there’s a disconnect with government: North west brewer and retailer Frederic Robinson has accused the government of a disconnect with the realities of alcohol consumption. Chairman Paul Robinson said: “The introduction of a higher beer duty rate adversely affected (our beer) Old Tom. This development is a further indication of the disconnect of government, which seeks to curtail the consumption of high strength national brands, sold at discounts in supermarkets, but which has a greater impact upon the quality product that we, and other members of the Independent Family Brewers of Britain, brew.” His comments came as the company reported turnover moved up from £53,405,000 to £53,985,00 in the year to end of December 2011. Pre-tax profit declined from £2,464,000 to £1,816,000. A total of £800,000 in lost turnover resulted from contracting management of temporary managed houses to a third party. Six pubs were sold, realising £1.6m. The company added that it still had optimism in its long term prosperity resulting from a “new brewery and brand launch, a greater economic focus on its tied estate, its new management team (David Bremner became director of marketing and Stuart Taylor became chief financial officer) and growth in volume in many areas of the trade”.

Spudulike reports sharp drop in pre-tax profits: Spudulike, the 42-strong operator of take-away baked potato stores founded by Barbara and David Leggate and partner Kim Culley (but briefly owned by the British School of Motoring), has reported pre-tax profits dropped from £675,403 to £247,653 in the year to 29 December 2011. Turnover dropped from £17,253,929 in 2010 to £16,981,266. Operating profit dropped from 4.5 per cent of sales to 1.8 per cent of sales, staff cost increased from 29.4 per cent of sales to 30.3 per cent of sales and gross margin decreased from 74.3 per cent of sales to 73.4 per cent of sales.

St Austell doubles brewing capacity: St Austell Brewery has unveiled a new cask racking plant worth £2.5million. The system will give the business the capability to double its brewing capacity, with the potential of producing up to 200,000 brewers’ barrels a year. The expansion follows a trend-bucking buoyant year of sales and numerous award-wins at the independently owned company. Despite the pub industry as a whole witnessing a market decrease of six per cent in beer sales in the first quarter of 2012. The St Austell Brewery development marks the biggest industry investment in cask operations in the last ten years. Production of the Brewery’s flagship ale, Tribute, reached an all time high this year - since it was launched 12 years ago - when the UK’s Regional Cask Ale of the Year broke through the threshold of 50,000 barrels moving-annual-total. James Staughton, managing director of St Austell Brewery, said: “The opening of the new cask operation plant represents a significant milestone in our company’s 160-year history and it brings the total investment in our brewing and bottling facilities to almost £6 million in just seven years. Whilst we’ve been fortunate to have witnessed an increase in sales, we’re by no means resting on our laurels. The opening of the cask operation plant is a bold move, but will mean we will be able to consistently meet the demand for our range of award-winning ales now and in the years to come.”

Former Robert Tchenguiz pub acquired through community Thousand Pound Club: The freehold of The Red Lion, in Warmington, near Peterborough, has been bought by sitting tenants Richard Bright and Tim Stubbs off an asking price of £350,000 after locals created the Thousand Pound Club. A spokesman for agent Christie + Co told Morning Briefing: “One of the pub’s regulars suggested a way to help them raise funds to buy the pub when it became available through administration – they introduced something called the Thousand Pound Club, where locals contributed towards a fund in exchange for offers on food. Therefore, the pub is owned now by Richard and Tim with Thousand Pound Club members benefiting from a loyalty-scheme type discount arrangement on food they eat at the pub.”

Bramwell Pub Company repositions Varsity site with Costa Coffee and all-day offer: Managed operator Bramwell Pub Company, formerly called Barracuda, is re-opening a Varsity student venue as a more broadly positioned pub called The Abbey this Friday after a £140,000 refurbishment. The pub will open from 9am every day, offer Costa Coffee and serve a breakfast menu that includes warm pancakes with raspberries, yoghurt and oats as well as a full English breakfast starting at £1.99. One of the new menu features is a ‘Big Eat’ section which includes a ‘Monster Pie’ filled with British beef and potato and which weighs in at one and a half pounds. “Sport is still a key focus for us at The Abbey and we have introduced two 60 inch TV screens and five other TVs around the pub meaning that customers will be able to see every pass, kick and shot on goal,” said a spokesman. “Our aim for the Abbey is to offer the residents and visitors to Gloucester a pub that can be used throughout the day.”

JD Wetherspoon plans Newtown hotel opening: JD Wetherspoon is set to extend its penetration of the Wales market after acquiring a hotel in Newton, the largest town in Powys with a population of 12,783. Wetherspoon has confirmed that it has agreed to purchase the Black Boy Hotel, based on Broad Street, subject to planning and licensing consent. Eddie Gershon, spokesman for JD Wetherspoon, said: “From our point of view we have many pubs across Wales, over 50 I think, but Newtown is a town where we are not represented and we want very much to be there because this is a very good site and we will wait for the outcome.” Meanwhile, Wetherspoon is in negotiations to buy Wetherspoon's to buy the 26-bedroom Jolly's Hotel in Broughty Ferry, Dundee which has been closed after owner Tay Hotels went into receivership – Broughty Ferry, on the north shore of the River Tay, has a population of 18,000.

Starbucks launches modular store: Starbucks has opened its first-ever drive-thru small modular store in Denver, Colorado. Starbucks has re-invented the coffee kiosk as a “modern modular’ – it looks like a very smart but small ski cabin with no internal seating. The building was constructed in a factory and delivered from a truck. An observer said: “The coffee juggernaut is trying to fend off diminishing returns from its larger-scale coffeehouses and expand its services to neighborhoods that aren’t big (or rich) enough to support a traditional Starbucks.” 

Simon French increases JD Wetherspoon target price: Panmure Gordon analyst Simon French has increased his JD Wetherspoon share price target from 515p to 520p after last month’s results. He said: “We have increased our earnings forecasts by circa per cent per annum for the financial year 2013 to 2014 following last month’s 2012 full-year results, which were modestly ahead of expectations. The group has reported best in class current trading figures, has sensibly scaled back its opening programme and has the ability to return excess cash to shareholders. We forecast 10.9 per cent Compound Annual Growth Rate in earnings per share over the next three years and an improving returns profile. We reiterate our Buy recommendation and increase our target price from 515p to 520p.”

New £1m Indian restaurant to open in Manchester: A new Indian restaurant called Malai is to open in Manchester’s Curry Mile next month. Owner Jaf Siddiqi has plans to expand with sites in Manchester city centre and Liverpool by 2014. Customers will also be offered valet parking, together with complementary rickshaw rides into Manchester city centre if they are planning an evening out following their meal. Siddiqi said: “The development is at a really exciting stage and it’s great to see the restaurant taking shape.” It was important for me to strike the right balance of Malai’s Indian heritage and a premium fine dining atmosphere within the overall design. We have meticulously planned to reflect this as well as possible and are thrilled with the results.” Malai covers two floors and is situated on Wilmslow Road in Rusholme, and seats 120 people.

Mitchells & Butlers wins two energy awards: Mitchells & Butlers (M&B) energy management team has won two awards in recognition of their innovation in energy reduction at the Refrigeration and Air Conditioning (RAC) Cooling Industry Awards 2012. The awards are held annually by RAC and highlight the leading technical innovations and environmental successes driving the sector. Mitchells & Butlers was named winner of ‘Environmental Collaboration of the Year’ for developing a free air cellar cooling system along with its partners Climate Center and GEA Searle. Simon Cocks, energy project manager, said: “Often the simplest ideas are the best, but really difficult to achieve. This system draws in cool air from outside when temperatures drop below ten degrees and turns off the traditional cellar cooling saving a huge amount of energy.” M&B also picked up a second award for End User of the Year (non-supermarket) beating off a quality shortlist of companies including Boots, GKN Aerospace and Nottingham University.

Starbucks poised to open first India site – well behind schedule: Starbucks has revealed it will open its first outlet in the Indian city of Mumbai later this month. The firm is entering India in a joint venture with the nation’s beverage-to-steel Tata conglomerate, making an initial $78 million investment. Starbucks had aimed for 50 outlets in India by the end of 2012, when it announced the venture in January, but made no mention of that target in its statement.

Atherton to open comfort food restaurant in Singapore: Michelin-stared UK chef Jason Atherton is to open his third venue in Singapore - Keong Saik Snacks – with a focus on iconic comfort food with a twist. The venue, located on Keong Saik Road at the Naumi Liora boutique hotel, is Atherton’s third site in Singapore. On the menu are pork chorizo hot dog topped with cheese, guacamole and Asian fried shallots, a kimchi burger, a lobster roll; and fish and oysters, where the battered fish resembles thick-cut chips.

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Jameson Banner
Fentimans Banner
Trail Banner
Transition Banner
Knorr Banner
Propel Banner
Jacuna Banner
Molson Coors Banner
Transition Banner
Amstel Banner
Zonal Banner
Toggle Banner
Bizimply Banner
Zonal Banner
Heineken Banner
Taylors of Harrogate Banner
Sky Banner
Hello Beer Banner
John Gaunt Banner
COREcruitment Banner
KAM Media Banner
Access Banner
Startle Banner
Veneers Banner
Just Eat Banner
Yapster Banner
Punch Taverns Link Punch Taverns Link
Pepper Banner