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Morning Briefing Strap Line
Thu 18th Oct 2012 - Wetherspoon, Starbucks and Punch Taverns

Story of the day:

Chains share of market in the UK biggest in Europe: The UK foodservice market has the biggest domination by chains of anywhere in Europe, Jochen Pinkser, of NDP group, has reported. He said the importance of chains varies across the continent but their share of the market is in growth across Europe. In the UK, visits to “chains” by consumers rose to 58 per cent of all visits in the year to June 2012, up from 52 per cent in 2008. The next highest country is France with 45 per cent of all visits to chains, up from 42 per cent in 2008. Pinkser, speaking at the European Foodservice Summit, also produced figures that show how consumers in big cities visit foodservice outlets more often and spend more than the rest of the country. In London, consumers make 11 per cent more visits per capita per annum than others in the UK and spend 25 per cent more. Across Europe, only Moscow inhabitants beat this figure – with 21 per cent more visits per capita than fellow countrymen and 40 per cent more spend. The UK and German markets are also the most price-driven in Europe with 27 per cent of visits in the UK driven by price as the primary reason, with Germany just behind with a price-driven figure of 25 per cent. Meanwhile, European Foodservice editor Gretel Weiss has told the European Foodservice Conference in Zurich that Italy provides one of the three predominant areas of food influence in Europe. She said: “It’s a generous cuisine based on rich ingredients. No other country has as many food export stars as Italy. Italian food has friends in all income classes, all age groups, all political classes.” She described the other two areas of predominance as “local cooking old and new”, a key player in individual home markets, and “fast food” – burger, chicken and chips, which are “best sellers in the out-of-home market” across Europe. Weiss described Asian food as a niche player growing in importance. “It’s top of the list for updating local dishes, fusion cooking and adding excitement to dishes on menus in general,” she said.

Did you know that Hard Rock Café and Sussex family brewer Harvey’s have nearly identical turnover? 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 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:

Castle Rock Brewery offers Starbucks customers an alternative: Nottingham brewer and retailer Castle Rock Brewery is offering disillusioned Starbucks customers an alternative in the wake of news the coffee company is paying very little corporation tax. Colin Wilde, managing director of Castle Rock Brewery, said: “Many people are confused and angered by Starbucks poor demonstration of business ethics towards taxation and I believe a line in the sand should be drawn. Castle Rock Brewery is a modest regional brewer paying £1.2m a year in beer duty, a duty that has resulted in thousands of pub closures and job losses. The pub trade is, relatively speaking, one of the most heavily taxed industries in the UK. High beer duty, VAT, business rates and corporation tax make up just some of the heavy calls on the British pub industry; it doesn’t seem fair that a giant business like Starbucks is behaving in this way, nor that it is even allowed to. From this morning, many of our pubs will be offering deals to attract the disaffected coffee consumer, including free coffee top ups, buy one coffee get one free and even half priced cakes and biscuits offers.”

Starbucks – “we’ve not been that successful in the UK”: Starbucks UK managing director Kris Engskov has claimed the company has not paid much corporation tax in the UK because the company has not been successful enough. He said: “We paid less corporate tax than rivals because we have not been that successful in the UK. The UK is not a vanity project; we want to be profitable. But you have to sell a lot of lattes to run (sites) in Oxford Street because the cost of business is very high and he economy hasn’t been good. The UK is undoubtedly the most competitive espresso market anywhere in the world.”

Hospitality Guild appoints operations director: Sophie Roberts-Brown, executive director of the Academy of Food & Wine Service (AFWS), has been appointed as operations director of the Hospitality Guild. The Guild unites 23 of the leading hospitality associations to provide ‘one voice’ dedicated to the development of the highest professional standards in hospitality. The AFWS is a founder partner of the Hospitality Guild. Sophie’s successor at the Academy is John Croft, who joins from his previous position as operations and employer liaison director for SkillsfinderUK Training. Suzy Jackson, executive director of the Guild, said: “It is testament to the collaborative working that we are already seeing across the Guild partner organisations that Sophie’s credentials and contribution at AFWS have been recognised by the Guild and that both organisations will benefit from the transfer of knowledge from Sophie’s appointment.” releases list of top five venues to enjoy Wi-Fi:, which lists venues that have good Wi-Fi on a consumer-facing website, has released a list of its top five locations to enjoy Wi-Fi. Top of the list is Drake and Morgan’s Anthologist (“plenty of space, open early and great service”), Tigerlilly, Edinburgh is second (“plenty of discreet spaces”), Slug & Lettuce, St Albans is third (“an impressive period building”), Ship & Trades, Chatham, Kent is fourth (“great waterside location”) and The Lion & Lamb, Ashton, Cornwall fifth (“worth a diversion off the A30”).

Eataly plans Istanbul site, signs lease for Chicago: Joe Bastianich, the US restarauteur who opened the 50,000 square foot food and shopping emporium Eataly In New York, which grossed $80m in its second year, has revealed that a new site is planned for Chicago and that Istanbul is on the list of potential openings. He said: “Istanbul is actively being pursued, we just opened in Rome in 120,000 square foot, and have signed a lease for a site in Chicago. We model ourselves on the Apple experience, where entering a store is part of a cultural, experiential, lifestyle moment – the value of the experience exceeds the actual purchase. Eataly has broken through the New York parameters and become the “piazza” of New York City in its true Italian essence - where the rich man and the poorest man go every day. The experience can be $2.25 espresso or a $200 steak. It’s become the crossroads of New York and you see all walks of life coming together to eat in one place.” The Chicago site is expected to open in September 2013. The new Eataly, on Ohio Street near Michigan Avenue in the retail heart of Chicago, will occupy the former home of the ESPN Zone sports bar and arcade that closed in 2010, in a more than 60,000-square-foot space. The new store will cost about the same as the first ($20 million) and is expected to open in September 2013.

Luke Johnson praises “accelerators” form of funding: Private equity investor Luke Johnson has praised the rise of “accelerators”, which fund cohorts of start-ups with seed money. He wrote in his Financial Times column: “The declining expense of technology – hardware costs have fallen by a factor of 100 over the past decade – means companies can be started with little capital. The philosophy is to try lots of different ideas, fail fast, and pivot if something does not work. I like the sense of urgency, the work ethic, the high-pressure environment that helps drive rapid progress, and the incredible opportunities to network and cross-fertilise.”

New owner for Caterer and Hotelkeeper: Media entrepreneur Clive Jacobs has bought the Caterer and Hotelkeeper, the UK hospitality industry magazine, from Reed Business Information (RBI). The acquisition is the second from RBI, following the purchase of the Travel Weekly Group in August 2009.

Company news:

JD Wetherspoon launches new menu with calorie counts; publishes annual report: JD Wetherspoon launched its new menu yesterday with full calorie counts for all menu items – previously those with less than 700 calories were highlighted on the menu. New items include a range of four burgers – the Brunch burger, Italian burger, Mexican burger and Skinny chicken burger. In the starters, share and deli section of the menu is a club sandwich with chips and free-range egg mayo malted grain bloomer sandwich. Other new menu items include a new porridge and two new curries for the popular Thursday night curry club - Welsh Dragon Curry and Thai Green Curry. Additionally the pubs are new serving three new soups to complement the existing tomato and basil - British Broccoli and Shropshire Blue Cheese, Carrot and Coriander and Lentil and Bacon. Meanwhile, the company’s annual report shows founder Tim Martin earned £351,000 in the year ended 29 July 2012, down from £375,000 the year before. Chief executive John Hutson's total remuneration rose to £847,000 from £628,000 the year before after various long-term bonus schemes matured. In the annual report, Martin said: “The company and its employees paid total taxes of £519.3 million in the financial year, compared with £461 million in 2011, an increase of £58.3 million. The company pays over £11 of tax for every £1 of net profit. All pubs and pub companies are, or should be, happy to pay their share of tax, but the pub industry has been fleeced by the government in the last decade and a half in particular, resulting in fewer jobs and lower taxes, but more supermarkets, in the UK.”

McDonald’s sues city of Milan for £19.5m over “unfair” eviction: McDonald’s is suing the city of Milan for £19.5m in damages after being moved out of its third busiest Italian site in the historic Galleria Vittorio Emanuele II to make way for the arcade’s second Prada outlet. The company has traded from the site for 20 years and turns over six million euros a year. McDonald’s claims the city of Milan, which owns the Galleria, fixed a public tender with clauses that inescapably excluded the restaurant – it’s the only business in the complex not to be given a right of first refusal on a new rental contract.

Fuller’s shares fizz up on bid rumours: The value of Fullers shares frothed up 10p to 755p yesterday as rumours continued that rival Young’s is teaming up with a private equity company to make a £10 a share offer for the company, valuing it at £322m.

Salisbury Pubs assigns the lease on The Black Horse in Fulmer: Salisbury Pubs, headed by David and Becky Salisbury, have sold the lease on Greene King’s Black Horse in Fulmer, which they took over a couple of years ago and refurbished. Stewart Harkness, from Christie + Co’s Enfield office, said: “The new operator of The Black Horse will benefit greatly from our clients’ expertise, and the model they created, which is one discerning customers want in a destination food operation.”

No Saints reports £2.2m loss in start-up year: No Saints, the nightclub operator parent company headed by Stephen Thomas, has reported a pre-tax loss of £2.2m on turnover of £1,726,142 in the year to 2 October 2011. The company stated: “The Jam House and dancing division proved profitable. The Greene Room concept was well-received but its trading performance was disappointing. Roll-out of the Chicago Pizza Pie Factory concept has been deferred whilst opportunities in the late night entertainment sector are being explored. The strength of our management team, combined with attractive operational templates such as the Jam House, is proving very appealing to landlords in particular. A difficult economic environment, whilst presenting challenges, also presents significant opportunities.” 

Plan submitted for Nottinghamshire first micro-pub: A plan has been submitted to open Nottingham’s first micro pub. Robert Arthur, of Sherwood, and a business partner, has applied for planning permission to transform a former pharmacy at 351 Mansfield Road, Carrington. A micro-pub apes the style of the first alehouses, where people opened their front rooms to sell beer. There are currently just six micro pubs in the country, with four in Kent, one in Hartlepool and one in Newark. Arthur said: "This will be a very small pub for 24 people and we will be trying to create a very local, community atmosphere that encourages sensible communal drinking.”

Norfolk operator Flying Kiwi Inns acquires sixth site and first in Norwich: Flying Kiwi Inns, the Norfolk operator headed by chef Chris Coubrough, who appears in ITV’s Coastal Kitchen, has acquired The Earlham Arms in Earlham Road, Norwich. The pub closed at the start of the year after just five months trading as The Earlham Arms - it was previously known as The Fountain, The Schoolhouse and The Pickwick. Coubrough: “We have taken on the lease at the pub, and it will be the first Flying Kiwi Inn in Norwich. The opening date is flexible but it will be some time next month. Builders have started work at the site and we will spending about £100,000 on it to make it look like a Flying Kiwi Inn. The food served will not be quite as ‘seafoody’ as our inns on the coast, and there will be a larger range of beers.” The Flying Kiwi Inns chain also includes the hotels, The Crown Inn in East Rudham, The Ship Hotel in Brancaster and The Crown Hotel in Wells and The White Hart Hotel in Hingham, which trades as a pub and restaurant.

Punch Taverns to install free Wi-Fi to 3,000 pubs: Punch Taverns is to install free Wi-Fi to its 3,000 core pubs – roll-out has begun and is expected to be completed by Easter next year. Punch Buying Club Director Andy Slee said: “Free Wi-Fi is an important plank of managed pubs’ offer and we want our pubs to be able to compete.” The company is also to extend its Quality Service Awards mystery customer scheme to its 3,000 core pubs after the scheme’s early success – the first 250 pubs to have passed the scheme show a seven percentage points better sales performance compared to other core pubs on substantive agreements in the core estate. Punch also hopes to have hired nine regional investment managers by Christmas, whose job it will be to ensure the successful launch of the hundreds of investment schemes Punch is planning for 2013. On Tuesday, Punch saw a record attendance at one of its Roadshow events. It was held at Twickenham stadium, with circa 450 licensees turning up. Licensees are offered a range of 28 money-off vouchers worth £1,200, a combined discount from various suppliers estimated to be worth around £5m across the estate. Slee added: “Suppliers were absolutely mobbed with orders – it was out busiest ever roadshow. The 28 vouchers include something for everyone and apply to community pubs as well as gastro pubs. The show is one of nine being held across the country in the next few weeks and provides licensees with lots of business-building ideas and a chance to met the operations board to share ideas.” 

Whitbread to build Newport Premier Inn over a nightclub: Whitbread is to build a 60-bedroom Premier Inn above the Delilah’s bar and nightclub in Newport – although the club could be forced to move at a later date. Refurbishment will begin on the top half of the High Street property first, so that Delilah’s bar and nightclub remains open for as long as possible. The Newport hotel is due to be complete towards the end of 2013. A spokesman for Delilah’s said: “We may stay open, it’s an open book at the moment. If not, there are a lot of vacant properties close by and if needs be we could move.” 

Marco Pierre White quits pub as it reverts to trading as a gastro-pub: Chef Marco Pierre White has quit a partnership that ran the Rainbow Inn in Cooksbridge, near Lewes, in Sussex after it was decided its offer was too high-end. Pierre White stepped down from the business around a fortnight ago as the decision was taken that it would revert to trading as a gastro-pub and move away from fine-dining. A “cosy” bar that was removed will be reinstated and the pub will be officially relaunched in the New Year. A spokesman from the pub said: “Marco has taken his business interests elsewhere. He was a partner in the business but is a partner in the business no longer.”

Carluccio’s opens £250,000 training academy: Italian chain Carluccio’s has opened a £250,000 training academy above its Upper Street restaurant in Islington. The academy offers video-linked classrooms and a training kitchen that can accommodate up to 12 chefs at any one time. An internet-based video system will allow courses and modules to be broadcast direct to Carluccio’s restaurants in the UK and overseas to allow other team members to watch the training sessions live.

Hugh Fearnley-Whittingstall opens Plymouth site: Celebrity chef Hugh Fearnley-Whittingstall has opened Plymouth Canteen & Deli in Plymouth’s Royal William Yard. He said: “The city and region have a strong fishing and market garden heritage, and we have a great opportunity to source the best ingredients and create some fantastic food in a wonderful location."

SSP’s Millie's Cookies brand target wedding market: Millie’s Cookies, the 110-srong brand owned by transport hub specialist SSP, is to target the wedding market with the launch of a cookie cupcake. Richard Kirk, head of marketing, channel developments, SSP, told British Baker: “Our giant cookie product is popular with our consumers for wedding gifts, so it seemed like a simple and natural progression into a huge market and it gives our customers the opportunity to further interact with the Millie’s brand.”

Former Mitchells & Butlers marketing director joins Brakes: Adam Martin, the highly regarded and long-serving former marketing and strategy director at Mitchells & Butlers, has joined Brakes in the newly created position of customer solutions director. Martin has been working as a consultant since leaving M&B. His new position involves developing a better understanding of and communication with the food distribution business's customer base.

Spirit raises £750,000 with sale of one of three freeholds let to Tesco Express: One of three Spirit Pub Company freeholds let to Tesco for use as a convenience was sold at a CBRE auction yesterday. The Tesco Express in Orton Wistow, Peterborough, with a guide price of £750,000 to £760,000 (rent is £56,000 per annum) was sold for £750,000. A Tesco Express in Burley Road, Leeds, with a guide price of £600,000 to £610,000 (rent is £45,000 per annum) and a Tesco Express in Gracemount Drive, Edinburgh, with a guide price of £720,000 to £730,000 (rent is £50,000 per annum) are still available.

£100,000 premium paid to buy restaurant lease: A private investor has paid a £100,000 premium to acquire the lease of the Palms of Goa restaurant in Fitzrovia’s Cavendish Street. The 1,450 square foot A3 premises are located close to the former Middlesex Hospital site, currently under development by Exemplar, and opposite The University of Westminster. The passing rent is £27,500 per annum for the lease, which expires in June 2018. Jonathan Moradoff, associate director at Davis Coffer Lyons which acted on behalf of Palms of Goa, said: “Fitzrovia is increasing in popularity for new operators at a incredible rate. Whilst the southern end of Charlotte Street has a long-established reputation, Goodge Street has historically marked a dividing line for values north and south along Charlotte Street. However, with Goodge Street itself now an enormously successful food and drink destination, and with the redevelopment of the Middlesex Hospital amongst other improvements nearby, there is increasing demand for units across a much broader perimeter.”

Bids sought for London pub investment: Agent Christie + Co is seeking bids for a pub freehold investment in London. The New Cross Inn is located between New Cross and New Cross Gate stations. The investment is split into two distinct businesses and has recently undergone an overhaul with capital expenditure of £80,000. There is a ground floor and basement live music bar with a ten-year free-of-tie lease and a current rental income of £36,000. The upper floors are presently operated as a hostel with 80 beds, a ten-year lease and a rental income of £60,000. Stewart Harkness, of Christie + Co’s Enfield office, stated: “This is a superb investment opportunity and we are experiencing high levels of interest.” Christie + Co is inviting bids for the freehold investment with a guide of £1,200,000.

SAB Miller reports volumes up five per cent in the UK: SAB Miller this morning reported that domestic volumes in the UK rose by five per cent driven by continued growth of Peroni Nastro Azzurro. Growth was moderate across most other markets in Europe with volumes up by low single digits.

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