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Morning Briefing Strap Line
Tue 16th Oct 2012 - Brunning & Price, Starbucks and Fiveeightzero

Story of the day:

Restaurant Group’s Brunning & Price brand “trading well” and set to deliver “strong returns” in 2012: Brunning & Price, the award-winning gastro-operator owned by The Restaurant Group, has reported that the company is “trading well” and set to deliver strong returns in 2012 with as least three new openings. The company, which is still headed by founder Graham Price, reported that sales grew 17 per cent against the year before to hit £27,643,000 in the year to 1 January 2012. Ebitda grew by 18 per cent to £3.9m with operating margin stable at 11 per cent. The Old Hall in Sandbach, Cheshire opened in July 2011 and is “trading superbly”. Meanwhile, Brunning & Price has responded to the honour of winning Good Pub Guide’s award for Pub Group of the Year for the fourth time. Founding partner Graham Price said: “The reason we’ve won this award is because every one of our pubs is popular on a local level and as a result has a main entry in the guide. They only manage to do so if a number of customers in the first instance recommend them, followed by anonymous inspections by the Good Pub Guide editorial team.” In awarding the Pub Group of the Year title, the Good Pub Guide’s judges explained: “The doyen of the smaller independent pub groups is unquestionably Brunning and Price, which has more than two dozen pubs with consistently high levels of food, drink and service, and which can be relied on for individual décor in buildings of real character. They are certainly the standard setters. It’s a great achievement.” Brunning and Price have recently opened the Wharf in Manchester’s Castlefield canal basin. Two further pubs are scheduled to open this year, including The Architect by the HQ building in Chester. Brunning & Price was the highest placed pub operator in the CPL Training Customer Satisfaction Index, a survey of 5,000 customers conducted by Propel Info, and scored fifth overall.

Propel Opinion by Paul Charity: When Restaurant Group bought Brunning & Price in October 2007 there was one obvious danger – the singularity of approach to food and service quality at Brunning & Price would be lost or eroded in the larger corporate culture. Five years on and Restaurant Group is to be commended for its self-control in ensuring Brunning & Price has retained its own identity. With its own headquarters in Cheshire and founding partner Graham Price still at the helm, it’s a model of sensitive assimilation. That the Good Pub Guide, the best quality pub guide on the market, still believes Brunning & Price is an independent entity speaks volumes about the Restaurant Group approach. Expansion has remained pretty much in line with the disciplined approach taken before acquisition. And each new Brunning & Price opening shows the same heightened respect for architectural individuality. All in all, it must count as one of the best-judged and executed acquisitions of the past decade.

Did you know that SA Brain enjoys more turnover in the UK than Wagamama? 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

Free Report: The Association of Licensed Multiple Retailers (ALMR) and CPL Training have teamed up to commission a free 10,000-word report on the key foodservice trends in Europe. The report, written by Propel Info managing director Paul Charity after a visit to the European Foodservice Summit in Zurich, looks at the companies and sectors that are out-performing in Europe and has insight and analysis from some of the world’s top operators. To receive a free copy e-mail Paul Charity on

Industry news:

Bad weather at the end of September holds back like-for-like sales growth to 0.7 per cent: Bad weather at the end of September held back sales growth at Britain’s leading pub and restaurant groups in September. Collective like-for-like sales were up just 0.7 per cent on the same month last year, according to latest data from the Coffer Peach Business Tracker, the industry’s sales barometer. The performance followed a 2.1 per cent like-for-like increase for the sector in August. Total sales for September, including the effect of new openings, rose 4.1 per cent. “The first week of September saw a big boost in sales, but the downpour in the last week was a wash-out for business, and especially pubs, leaving overall trading essentially flat,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the sector Tracker, the sector’s biggest and most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS. “It goes to show that the weather remains a major influence on trading patterns for the eating and drinking out sector,” Martin added. “In September, the wet weather particularly depressed alcohol and pub sales, while food and eating out held up better.” Regionally, the Coffer Peach figures showed little overall difference between trading inside and outside the M25, although pubs had a better time in London and high street restaurant brands did relatively better away from the capital. “The good news is that even with that set-back, the bigger operators were still in positive growth and collectively continuing to gain market-share,” concluded Martin. Underlying figures for the 12 months to the end of August, show combined total sales for the 25 companies providing data for the Tracker were up 5.8 per cent on the previous 12 months, with combined year-on-year like-for-likes running ahead 1.7 per cent.

Jamie Oliver – we’re losing 30,000 napkins a month: Jamie Oliver has told the Radio Times that customers are stealing 30,000 customised napkins a month from his Jamie’s Italian restaurant chain – and that the company is having to screw down fixtures on its Thomas Crapper toilets to avoid customers taking them home as souvenirs. However, a spokesman for Oliver later reported that the chef had got the number wrong. “Although we do lose a fair few napkins, it is not near that number. People mostly want them as souvenirs.”

Daily Telegraph hails London upswing in restaurant exploration by younger diners: Daily Telegraph columnist Lucy Cavendish has hailed the rise of interest in exploring restaurants among London’s young professionals. She wrote: “Food, it seems, is the new rock ‘n’ roll. Whereas eating out, fine dining, the entire ‘culinary experience’ used to be the domain of the well-off, middle-aged middle class, now it’s cool to be young and curious about food. It began in New York, where a new restaurant seemingly sprang up every day, but now the revolution has crossed the Atlantic to London, aided by blogs, Twitter and Facebook. Michelin stars are meaningless in the face of small plates, sharing tables and meal deals on lunches.”

Reuters probes the “mystery” of Starbucks losses in the UK: Respected news agency Reuters has probed the “mystery” of Starbucks losses in the UK – and low levels of tax paid by McDonald’s and KFC in this country. Reuters notes that Starbucks makes its UK unit and other overseas operations pay a royalty fee - six per cent of total sales - for the use of its ‘intellectual property’ such as its brand and business processes. McDonald’s also charges its UK subsidiary a royalty for ‘intellectual property’, although at a lower rate of four to five per cent. Reuters stated: “Accounts filed by its UK subsidiary show that since it opened in the UK in 1998 Starbucks has racked up over £3bn ($4.8 billion) in coffee sales, and opened 735 outlets but paid only £8.6m in taxes, largely due because the taxman disallowed some deductions. Over the past three years, Starbucks has reported no profit, and paid no income tax, on sales of £1.2bn in the UK. McDonald’s, by comparison, had a tax bill of over £80m on £3.6bn of UK sales. Kentucky Fried Chicken, part of Yum! Brands, the number three global restaurant chain by market capitalisation, incurred taxes of £36m on £1.1bn in UK sales, according to the accounts of their UK units. Transcripts of investor and analyst calls over 12 years show Starbucks officials regularly (talking) about the UK business as “profitable”, said they were very pleased with it, or even cited it as an example to follow for operations back home in the United States.”

Aggressive advertising returns in the US: Three US restaurant brands – Taco Bell, Arby’s and Domino’s - have debuted advertising campaigns that return to “competitive advertising”, making direct or thinly veiled comparisons between themselves and other brands, Chipotle, Subway and Pizza Hut respectively. Sandwich chain Arby’s makes the most aggressive attack of three, targeting freshness at “Subway”. Its advert features a retired detective outside a blurred but still recognisable Subway fascia to disparage its use of pre-sliced meat – Arby’s insists all sandwich meats are sliced on the premises.

Scotland shelves plans to introduce minimum pricing: The Scottish government has put plans to introduce minimum pricing on alcohol on hold until after legal challenges against the move continue to mount. The decision means that the proposal, which was due to come into force in the spring of next year, has now been put on hold indefinitely with an introduction date several years away assuming the Scottish government beats legal challenges from drinks producers and European legal issues. Minimum pricing was already hitting difficulties after the European Commission ruled last month that it was opposed to it on the grounds it broke free trade laws. The European Commission has joined five European Union nations in submitting legal questions over the controversial legislation, which was passed by the Scottish government in April. Association of Licensed Multiple Retailers strategic affairs director Kate Nichols said: “Both governments have finally woken up to the fact that it is the plethora of pocket money priced alcohol promotions which are the real problem. They must not shirk from putting in place a wider framework of action to tackle unregulated supermarket sales and there is much they can do on hours, on siting, on cross-promotions and meaningful controls on multi-buys. With 70 per cent of alcohol now bought and consumed at home, and widespread punitive measures against pubs and bars are not delivering either government’s public policy objectives on health and crime and disorder. What we need is not only measures to make it more expensive to drink at home, but also action to remove the horrendous regulatory and tax burdens which are crippling the pub and literally pricing many out of the market.”

Company news:

Spirit Pub Company reports profit before tax up 16 per cent to £51m in full year: Spirit Pub Company has this morning reported profit before tax up 16 per cent to £51m and Ebitda up five per cent to £146m in the 52 weeks to 18 August. Managed like-for-like sales rose 4.8 per cent with like-for-like net income down 4.9 per cent in its leased division. Average weekly sales in its managed pubs are £17,000 per week, a ten per cent like-for-like improvement in the past two years. There was a loss before tax of £589m, very largely as a result of property revaluation. Chief executive Mike Tye said: “I am delighted with the progress we have made during our first year as an independent business. Profit before tax is up 16 per cent, earnings per share are up 21 per cent and we have commenced the payment of dividends. We have delivered further strong growth in managed sales through continued investment in our brands, estate, infrastructure and people while cost control has been robust in the face of inflationary pressures, enabling continued expansion of Managed margin. Our leased pubs have performed in line with our expectations this year and we have now laid the foundations from which to drive performance improvement. The consumer environment remains tough but our ongoing focus on delivering retail excellence sees us well placed to make further progress in the year ahead.” A maiden dividend of 1.95p per share is to be paid. Numis analyst Douglas Jack issued a buy recommendation with a Target Price of 80p a share.

Luminar set to meet Swansea Oceania landlord over setting sustainable rent: Nightclub company Luminar is set to meet the landlord of its giant Oceania site in Swansea, RBS, over setting a sustainable rent for the site, which features in Channel Four’s Back to the Floor documentary earlier this year. Luminar has built trade by circa 50 per cent on the start of the year. Chief executive Peter Marks told the local newspaper: “We have increased trade enormously by being quite aggressive on pricing and by putting on entertainment and by hard work and promoting the club. We are looking for a rent reduction so we can get a business that is sustainable. If your rent is too high you won’t survive. It has to be affordable when times are not easy. RBS have let us get on with driving the business so we can afford to pay them the highest rent we can.” The Swansea Oceania now regularly attracts around 2,000 customers on a Friday night as trade begins to return. Marks added: “If turnover had continued to go down then certainly we would have had to throw the keys back. But the club is now profitable and admissions are up.” Meanwhile, Dunlop Heywood has been appointed as rating consultant for Luminar. Director Stuart Hicks said: “The Luminar Group has over 75 properties nationwide (and) its nightclubs attract 11 million people every year.”

St Austell signs up with CPL Training: West Country brewer and retailer St Austell has entered a partnership agreement with Merseyside-based CPL Training to ensure its members of staff are trained to the highest standard. The partnership is part of a two-stage programme that aims to raise service standards together with instructing staff on licensing law and the numerous statutory requirements involved in running a pub. At the centre of the programme is CPL’s e-learning suite of online courses, which will be rolled out across St Austell’s 25 strong managed estate. Shelley Tookey, company training and developments manager at St Austell, said the programme is due to start by the end of October. It will be open to up to 800 members of staff in the managed houses as well as elements being available to around 400 people employed in other aspects of the business, including the brewery. She added: “People will have access to around 22 courses, of which some will be mandatory depending on what their job entails. There are no barriers to the number of courses that people can take if they want to develop their career.”

Robinsons win regional business of the year award: North west brewer and retailer Robinsons has been awarded Business of the Year at the finale of the Stockport Business Awards 2012. Sponsored by NatWest Commercial Banking, the award was judged on demonstrating all-round business excellence and impressive business achievements. Competing with a range of businesses, Robinsons, based in Stockport since 1838, was named the winner due to its innovative new brew house and visitor and training centre, underpinned with commitment to the high quality training of landlords and chefs.

Fiveeightzero to open John Salt in Islington on 1 November: London bar and restaurant operator Fiveeightzero, which works with Mitchells & Butlers on its Project Tokyo urban bar/restaurants in the provinces, and runs the Camden Lock Tavern will open the John Salt on Thursday 1 November. The venue, described as Fiveeightzero’s “deepest culinary venture” by consultant Mike Palmer, involves Ben Spalding, former head chef at Gordon Ramsay’s flagship three Michelin-starred Hospital Road restaurant. It will feature a 25-seat restaurant overlooking the main bar with tasting menus of four, eight and 12-course meals. The downstairs will have a warehouse feel and its own menu, featuring dishes such as salt marsh lamb wraps and crispy chicken skin sandwiches. 

Licensee buys freehold of Norfolk’s famous Ratcatchers pub: Licensee Den Critoph has re-opened one of Norfolk’s best-known food pubs, The Ratcatchers at Eastgate, Cawston, after buying the freehold – it closed last month. Critoph, who also operates The Royal Oak in Bintree near Dereham, said: “Customers started to come back as soon as we reopened, which was fantastic.” Previous owner Peter McCarter, who had been in charge of the pub for 14 years, blamed tough trading conditions, cheap alcohol at supermarkets and the increased VAT rate of 20 per cent for the closure of the award-winning business.

Punch pub in Manchester re-opens after £100,000 refurbishment with Old English Pies offer: The Britons Protection, a listed Punch pub on Great Bridgewater Street in Manchester, run by licensees Peter Barnett and Markus Stephens, has re-opened after a £100,000 refurbishment. To strengthen its British heritage, the pub specialises in Old English Pies ranging from Steak and Guinness to Grunt Gobble Zoom and Coo pie (wild boar, turkey, hare and pigeon). Punch Taverns’ partnership development manager Ian Lester, said: “The refurbishment has created a fantastic external drinking and eating area and updated the function room, without loosing the traditional charm and character, and ultimately the historical roots, which makes this pub so popular.”

Six restaurant brands lined up for Watford development: Six restaurant brands - Zizzi, Wagamama, Carluccios, Chimichanga, Nando’s and Jimmy’s World Grill & Bar - are lined up to open in a formerly “derelict eyesore” in Watford town centre, which will become the “Met Quarter” after a £20 million redevelopment. Costa Coffee is also taking over the former Barclays Bank building on the corner. Mayor Dorothy Thornhill said: “This area has been transformed from a derelict eyesore to something far more attractive, and we’ve ensured the original facade has been retained.”

Malmaison to launch suburban version: The Malmaison and Hotel Du Vin business is to launch a suburban offshoot called MalLife, according to The Times. The suburban version will offer a health club, coffee shop and a bar and brasserie, with sites lined up in Bristol, Milton Keynes and Aberdeen.

Carpet magnate expands pub estate: Carpet entrepreneur Mike Smith, who owns Mike’s Carpets, has bought The Saw pub in Spen Lane, Gomersal, Spenborough from Punch Taverns. Smith, who owns a number of pubs in West Yorkshire, said: “We completed the purchase from the company earlier this week. We want to reopen the premises as a pub and restaurant.” The pub, which was formerly the Old Saw, was reopened in 2005 after a £250,000 makeover and name change but closed its doors earlier this year.

Prezzo opens next to giant Bristol restaurant: Prezzo has opened its first site in Bristol. The new venue has 156 covers and is located next to the giant 1,000-cover Za Za Bazaar eat-as-much-as-you-like buffet restaurant. Prezzo has moved into the former Victorian leadworks building previously occupied by the Firehouse Rotisserie.

Former PizzaExpress operations director takes top job at Your Move: Former PizzaExpress operations director Helen Woodhouse has become managing director of estate agents Your Move, which is part of the LSL Property Services Group. Woodhouse’s previous roles include head of commercial marketing at Woolworths and regional operations manager at Comet.

Prezzo takes La Tasca site for Chimichanga opening: Prezzo, headed by Jonathan Kaye, has acquired the former La Tasca site in Bury St Edmunds for its fast-growing Mexican brand Chimichanga. The La Tasca branch, which had been on Abbeygate Street for eight years, was one of 22 restaurants that closed at the end of last month. Prezzo has taken on a lease at the site and is to invest around £550,000.

Restaurant Group to open Stevenage Coast to Coast this Friday: Restaurant Group will open it latest Coast to Coast in Stevenage Leisure Park in the former Aroma restaurant. It follows site in Newcastle and the original in Brighton Marina, which opened almost a year ago and is taking up to £50,000 per week.

Six brands line up for Dorchester’s Brewery Square town centre development: Seven brands are set to open in Dorchester’s Brewery Square development. Nando’s will occupy a 2,100 square foot unit situated in Dray Horse Yard next to the Odeon cinema, which is set to open later this month. It is the largest town centre regeneration project in the south west. The first element of the £100 million development’s second phase is opening at the end of the month, with Carluccio’s Italian restaurant and the Odeon cinema opening their doors in Dray Horse Yard in Weymouth Avenue, with PizzaExpress to follow shortly afterwards. Other brands set to open are Wagamama, Cafe Rouge and Zizzi.

Did you know? Yummy Pub Company, the innovative four-strong company headed by Tim Foster and Anthony Pender, has reported sales success with the Joe & Steph’s range of unusual popcorn flavours. The popcorn is available in biscotti dispensers in flavours such as caramel macchiato & whisky, ginger caramel, salted caramel, toffee apple & cinnamon. Yummy Pubs have even used Joe & Seph’s goats cheese and black pepper flavour popcorn as part of a tapas menu. Foster said: “Pub business is now about retail. If you get the retail right the customers will follow. When I stumbled upon Joe and Seph’s popcorn I knew instinctively it would be a talking point at my sites and the range has proven to be very popular. I never imagined popcorn could drive footfall but the product is fantastic and customers do seem to want to hunt it out!”

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