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Morning Briefing Strap Line
Wed 24th Oct 2012 - Punch Taverns, Bill’s and Wagamama

Story of the day:

Harvester set to burst through 30 million meals mark: Harvester, the Mitchells & Butlers’ (M&B) grill and salad bar brand, is set to pass the 30 million meals served mark in the coming year. The brand, which has expanded to 205 sites and is overseen by Steve Cash, is thought to be currently just a few thousand annualised meals short of the 30 million mark with each site currently serving around 146,000 meals per annum or 2,800 meals a week. The next opening or two is expected to ensure Harvester passes the 30 million annualised meals mark. On Monday, Propel Morning Briefing reported that Marston’s sells an annual total of 26 million meals from 550 managed pubs. The meals figure served at Harvester also means it sells almost exactly 25 per cent of all 120 million meals served by M&B across the entire estate - Harvester sites have twice the meal volumes of the estate average. Innovations at Harvester in the past year include the introduction of takeaway which are reported to have two per cent incremental sales – worth an estimated 50 or so extra meals a week. Harvester was struggling a few years ago but has been successfully reinvented as Harvester Salad & Grill. Its current national newsprint advertising campaign puts a focus on the degree of customer choice provided by its menu – the opportunity to mix main items, sauces and help-yourself free salad. The advertising tagline is: “Be demanding at Harvester.” 

Propel Opinion by Paul Charity: If you wait long enough, you’ll surely find yourself back in fashion. The spate of trendy openings in London focused on rotisserie chicken will have brought a wry smile to the lips of M&B executives. There was a time a while ago when Harvester was starting to look terminally untrendy. Former director of marketing at M&B Adam Martin even compared consumer perception of the brand to Woolworths at one stage. But at its heart was a very modern chicken and salad offer. Now the brand has gone through a re-invention to update décor, menus and styling that has shaken off any noticeable signs that it first appeared way back in 1983. 

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:

East Hertfordshire eyes £66,000 pot from late night levy: East Hertfordshire District Council will be told next week at a licensing committee meeting that the authority could raise £44,000 from the late-night levy on premises that shut before 1am. The district has more than 100 such premises with 59 more closing between 1am and 2am, with potential revenue of almost £19,000, and 11 venues closing after 2am and liable to pay almost £3,000 in total. East Hertfordshire would be able to keep 30 per cent of the levy, which ranges from £299 to £1,493 per premises. The other 70 per cent of the revenue must be remitted to the police service, councillors will be told.

Tim Martin and Steve Richards among speakers at BISL conference: JD Wetherspoon founder Tim Martin and Novus chief executive Steve Richards are among the speakers at the Business in Sport and Leisure Conference on Tuesday 6 November at Lords, sponsored by Sky. David Brailsford CBE, the performance director of Team Sky, and Sky Sports managing director Barney Francis will also speak at the event. To obtain tickets contact Amanda Fry on or call her on (0208) 2553782.

Parliament to debate beer duty escalator: A full three-hour Parliamentary debate on the government’s controversial Beer Duty Escalator will take place on Thursday, 1 November, with a motion that will call on the government to review the policy. The move follows an e-petition that has attracted over 100,000 signatures, and new figures published yesterday by the British Beer & Pub Association that show UK beer sales, a key sector of the economy, falling by 5.6 per cent in the third quarter of 2012. Since the introduction of the beer duty escalator in March 2008, beer duty has increased by 42 per cent and beer sales have fallen by 15 per cent. Most of this decline has occurred in Britain’s pubs and clubs. Over this period, 6,000 pubs closed their doors for good, with beer taxation costing the average pub around £66,000 per annum. Brigid Simmonds, BBPA chief executive, said: “I welcome this decision, which shows many MPs are indeed listening to the public on this issue.”

US restaurant chains enjoy Facebook engagement surge in the third quarter: A host of US restaurant brands have seen a big jump in Facebook fan engagement in the third quarter of 2012 after switching strategy. According to consulting firm Expion, the total number of Facebook likes, comments and shares for the restaurant chains with the 100 highest “like” counts more than doubled from Expion’s second-quarter study to the third quarter. Chief strategy officer Mike Heffring said the data indicates a second phase of social media, with brands learning how to create engaging Facebook posts at a rapid rate. “Brands are building engagement rather than focusing on building big fan bases,” Heffring told Nation’s Restaurant News. In terms of earning comments, likes and shares. Starbucks came top followed by Chick-fil-A, Taco Bell, Cheesecake Factory and McDonald’s.

Legal challenge for minimum pricing in Scotland: The drinks industry is going to court to challenge the Scottish government plans for a minimum price per unit of alcohol. The Scotch Whisky Association and the European Spirits Organisation have asked that the law, passed by the Scottish parliament in May, be struck down. The judicial review at the Court of Session is expected to last six days. Drinks industry lawyers will make the case against the law on three main planks: it concerns an area of policy reserved to Westminster; it is in breach of the Acts of Union of 1706 and 1707; and it is incompatible with European Union trade rules.

Champneys to expand into healthy food: Champneys, the six-strong health spa business owned by Dorothy and Stephen Purdew, is to extend the brand into the wider lifestyle market with a range of healthy eating products and apps that provide healthy tips that consumers can adopt in their daily lives. Alex de Carvalho, managing director of Champneys, told Marketing Week that the brand’s vision is to be the UK’s “health and wellness reference point not just a spa brand” – the company already sells branded beauty care products through supermarket chains.

Company news:

Punch reports discussions with shareholders over a restructure have begun; significant changes to securitisations required: Punch Taverns has reported that it has begun talks with major shareholders over restructuring its securitisations. The company said this morning that a review had made it clear “significant changes to the securitisations are necessary”. Discussions have started with “major shareholders and other significant stakeholders” to seek input on the range of possible options available to restructure the securitisations. Punch will extend these discussions to the bondholders in both of its securitisations at the appropriate time. On trading, chief executive Roger Whiteside said: “We have delivered profits for the year in line with our expectations and are on track with our disposal programme in extracting maximum value from our non-core assets. We are making good progress towards our long term objective to become the UK’s highest quality, most trusted and best value leased pub company, with record levels of investment in our core pubs and an additional 1,100 Partners joining the Punch Buying Club. While the options (on securitisation restructure) are complex and will take time to conclude we are confident that a consensual restructuring can be successfully implemented in a manner that delivers value for stakeholders.” In the 52 weeks to 18 August, Punch saw like-for-like net income in core pubs down 3.7 per cent. Profit before tax was £64m and in line with expectations. A total of 475 pubs have been sold for £130m, £1m ahead of book value. Substantive lease agreements are in place at 94 per cent of pubs. Numis Securities analyst Douglas Jack said: “We are moving our stance to Hold, awaiting the outcome of imminent discussions with bondholders to restructure the capital structure.” 

Wagamama launches new website to “bring brand to life”; scraps long-awaited Washington DC opening: Noodle chain Wagamama has unveiled a new website that attempt to bring the brand to life and extend customers’ restaurant experience. The site now includes an interactive digital menu, a “Wagamama recommends” function and a nutrition section. Ingrid Williamson, Wagamama director of marketing, said: “With our new website, we feel we have created a dynamic space for our Wagamama fans to visit and are placing a wealth of new information at their fingertips.” Meanwhile, the brand has ended a long-running saga by confirming that it won’t, after all, be opening in Washington DC. The company signed a lease on the former Olsson’s Books space in 2009 with a 2010 opening scheduled. Delays ensued but as recently as last year Wagamama said it remained committed to opening. Now Wagamama has stated it “will not be opening” in the capital. It currently has three sites in Boston, Massachusetts. 

Marston’s landbanks another motel site: Midlands-based Marston’s is land-banking another motel site next to a new-build pub. In the past, Marston’s has worked with partners such as Travelodge to develop a new-build motel alongside one of its pubs. The company has applied for permission to build the new lodge in a separate building from the recently completed Mermaid in Ipswich with a view to recruiting a partner to develop the motel site - it would provide 24 bedrooms. The application needs special consideration by planners at the borough because it is on a flood plain. Whitbread has reported it gets better returns from site where a pub restaurant and Premier Inn are co-located.

Whitbread introduces three regionalised price brands at pub restaurants: Whitbread has introduced three regionalised price brands at its pub restaurants division. The company told City analysts it had also introduced selective price rises to help mitigate food inflation of five per cent and labour inflation of 2.5 per cent. The company has also begun a fortnightly mystery guest programme. In an answer to a question about how performance compares to its peers, analysts were told that performance is not comparable because its pub restaurants are 75 to 80 per cent food-led. Whitbread also reported that consumer preference for Costa Coffee had increased in the past year versus its major competition with 32 per cent choosing Costa as their favourite with both Starbucks (23 per cent) and Caffe Nero (12 per cent) down. Chief executive Andy Harrison said coffee sales had been helped in the most recent quarter by “more wet weekends than normal”. The number of Costa Coffee Express machines now stands at 1,985 just 18 months after the acquisition of the Coffee Nation business – sales increase by 20 per cent when a Coffee Nation machine is re-branded as a Costa Coffee Express.

McDonald’s launches ad campaign for Taste of the World menu: McDonald’s has launched a television advertising campaign for its Tastes of the World menu. The menu features Spanish Grande, Australian BBQ Supreme, Chilli and Cheese Mexican and Chicken and Chutney Indian burgers. Each of the limited edition burgers are available for just one week as part of the month-long campaign. The advertising campaign was launched yesterday (Tuesday).

No Saints closes Cheltenham site: No Saints, the business run by former Luminar chief executive Stephen Thomas, has closed its Cheltenham site, Lace. It is thought the nightclub will be undergoing a full refit and rebranding at some point in the future. No Saints applied for a three-storey extension to building in courtyard in August 2011.

Harvey’s expands Lewes estate with acquisition of Lincoln bar: Lewes-based Harvey’s has expanded its estate in the with the acquisition of Lincolns Bar, at the top of the High Street, next door to Lewes Crown Court. The company stated: “We are very excited to be taking over this public house and refurbishment is already underway. We hope to have the front bar open in three to four weeks, however it may be a while longer until the whole establishment is up and running.”

Warneford Bars new £1.5m Leamington Spa nightclub to open this Friday: A £1.5m nightclub and bar venue described as the “greatest venue Leamington is ever likely to see” will open this Friday, a week after its planned opening night. Altoria, which will operate on four floors with a ‘boutique’ VIP lounge, nightclub, bar and food offer. The venue is in the former KoKo’s premises in Warwick Street. The opening has been delayed by a week after flooding caused by a faulty ice machine.

Bramwell Pub Company set to launch “number of offers and initiatives”: Bramwell Pub Company, the company that emerged from the restructure of Barracuda Pub Company, is set to launch “a number of offers and initiatives” as part of the next stage of its growth strategy. Operations director Rob Pitcher said: “The formation of the new company means that we have begun an investment programme which will see us commit to spending almost £1.5 million in the pubs before Christmas.” Meanwhile six awards have been presented to the company’s outstanding managers. They are: Drinks Sales Pub of the Year – Craig Whitehouse at The Grapevine in Bromsgrove; Food Sales Pub of the Year – Jill and Stuart Harkness at The Red Lion in Chester-le-Street; Turnaround Pub of the Year – Francesca Pollard at The Orange Tree in Prestwich; Profit Pub of the Year – John Griffin at the Abbey in Liverpool; Overall Pub of the Year – Mathew Samler at The Crown in Egham; and Area Manager of the Year – Tim Greaves, London.

Warwickshire pub company joins the chicken trend: CD Pub Company is to join the wave of operators focused on chicken by opening a new restaurant brand Flat Chicken in Stratford-upon-Avon. The group, which also operates The Stag at Offchurch and the Moorings at Myton in Leamington Spa, will open the new restaurant at the end of November. The concept has been devised by operations director Charles Harris and the company is hoping to expand it across the Midlands. Flat Chicken, which will occupy the former Bernadette’s restaurant in Guild Street, will serve rotisserie chicken available to eat in or take away plus steaks. 

Steakhouse chain Viva Brazil opens third site: Steakhouse chain Viva Brazil has opened its third site – this time in Cardiff. The chain currently has restaurants in Liverpool and Glasgow and wants to open seven further restaurants around the UK. The opening has become possible after the business secured a £375,000 funding deal from Santander Corporate Banking, backed by the government’s Enterprise Finance Guarantee. Viva Brazil is a traditional Brazilian-style restaurant operating around the “Churrascaria” ethos of Brazilian steak.

Nando’s to open two new sites in Dublin: Chicken restaurant chain Nando’s is opening two new sites in Dublin creating 100 new jobs - this brings the total for Nando's sites to nine in Ireland. The new outlets are in Blanchardstown and Liffey Valley, both of which open next month. Alan Snyman, managing director of Nando’s Ireland, said: “The addition of 100 new full and part-time jobs demonstrates our commitment to Ireland.”

Loungers to debut in the north west next week: Loungers, the café bar concept headed by Alex Reilley and backed by Piper Private Equity, will debut in the north west on Wednesday next week (31 October) with the opening of Brasco Lounge on Mann Island in a 2,900 square foot site. The company also has sites lined up for Fallowfield and Didsbury in Manchester. The company is also planning to open its biggest Cosy Club site in Cardiff’s St David’s shopping centre in mid-November. It will have a double-height entrance lobby and a first floor offering dual aspect views onto The Hayes below. The Cardiff opening will have 7,300 square foot of trading space – other Cosy Club sites are in Taunton, Bath, Stamford and Salisbury.

JD Wetherspoon sets provisional opening date for Beccles site: JD Wetherspoon has set a provisional opening date of 12 February 2013 for its planned refurbishment of the King’s Head Hotel – the Suffolk town has a population of 9,746. The 16th century King’s Head Hotel closed for redevelopment in August 2010.

Lanarkshire bar and nightclub business in administration: A Lanarkshire bar and nightclub business has gone into administration. Centrepoint Venues and subsidiary Merlin McFlys own the Sugar Sugar/30 Something and The Edge/Level 2 nightclubs, and The Inishmore bar in Coatbridge.

Long wait for Bill’s in Horsham set to end in December: The longest drawn-out opening challenge for the Bill’s Grocery and Produce Store chain, owned by Richard Caring, is set to end shortly - it has been confirmed the brand will open in the town hall by December. The £1m opening, expected early in December, will end a two-year saga that originally saw a proposed Bill’s redevelopment of the town hall rejected by its owner, the town council. The local authority did a u-turn earlier this year to name Bill’s as its preferred tenant.

Browns Bar and Brasserie launches £150,000 apprenticeship scheme: Mitchells & Butlers’ Browns Bar and Brasserie brand has launched a pioneering new catering and hospitality management apprenticeship scheme in its restaurants across the UK to help find the rising stars of tomorrow, and kick-start a career development drive within the industry. Initially recruiting 60 apprentices to its new 12-month scheme, places have already been filled with front of house team members and chefs who will ultimately gain the Level 2 Food & Beverage Apprenticeship and Level 2 Professional Cookery Apprenticeship respectively. Browns is investing £150,000 to launch the scheme which utilises an e-learning resource, along with assessments being carried out by ‘Mentor Assessors’ who are Browns’ own general managers and head chefs. This means each apprentice is guided and coached through their apprenticeship by an individual who is in a position to provide continuous support and tailor their skills and knowledge. Vanessa Hall, brand operations director, said: “We are offering extremely competitive rates of pay, equivalent to the full rate for the jobs being performed, plus they receive training and a nationally recognised qualification at the end of the 12-month training period.”

Hotel in Woodhall Spa golf Mecca sold: The Woodhall Spa Hotel in the Lincolnshire town of Woodhall Spa, renowned for its golf course, has been sold to an existing hotel operator off an asking price of £1,250,000. The property, located on The Broadway, offers 25 en suite letting bedrooms. Ben Freckingham, of agent Christie + Co, said: “The Woodhall Spa Hotel generated a lot of interest, resulting in a competitive bidding process.”

Trust Inns buys village pub closed for a year: Trust Inns, the company owned by veteran businessman Trevor Hemmings, has bought a village pub closed for a year – The Dog and Partridge in Charnock Richard. New licensees Lisa and Tony Woods will re-open the pub in time for Halloween. John Hitchmough, operations director central region for Trust Inns said: “We’ve been aware of the development at The Dog and Partridge for some time and we are delighted to have it within our portfolio of great local pubs”.

Wear Inns buys two pubs from Orchid: Wear Inns, which is backed by the Business Growth Fund and NVM Private Equity, has bought two Orchid pubs, The Colonel Prior in Sunderland and The Park in Bradford. The new acquisitions follow the purchase of nine pubs from TCG Bars in July 2012. It now has a managed pub estate of 26 premises. NVM has been an investor in the business since 2006 when it was founded by John Weir and John Sands, now CEO and chairman respectively. Weir says that back in 2006 the company’s objective was to acquire 20 pubs across the north east and Yorkshire, a target which it has now exceeded. “We were clear that managed pubs were the way to go as they are clearly driving the market in terms of positive like-for-like growth,” he said.

Cote Ebitda hits £10m as sales jump to just under £50m: Cote Restaurants, the highly rated French brasserie chain owned by Richard Caring that is rumoured to be eyeing sale options, has reported turnover increased by 38.7 per cent to £49.3m in the year to 29 July 2012. Ebitda increased £3.3m to £10m, an increase of 46.6 per cent – with Ebitda as a percentage of turnover increasing from 19.2 per cent to 20.3 per cent. Pre-tax profit jumped to £6,916,508 from £3,971,680 the year before. The company operated 32 restaurants at its year-end with a “good pipeline” of sites. A further site has been opened since its accounts were signed with two under construction. The company stated: “During the period an increase in alcohol duties were not passed on to customers in line with the company’s value-for-money policy. However, this increased cost was partly mitigated by the negotiation of a new key beverage supply contract.” The company’s current facility with the Bank of Scotland is due to expire in April 2013. It stated: “It is the directors belief that this will be successfully renegotiated given the company’s strong financial results, continued expansion and the company’s relatively low bank debt EBITDA ratio of 1.5 times.” On Sunday, The Sunday Telegraph repeated a story about the possible sale of Cote. Propel Morning Briefing reported in August that Caring had appointed Hawkpoint to explore a possible sale. The Sunday Telegraph reported: “Caring could sell a stake to a new investor who would help bankroll expansion or sell outright.” The last filed accounts show the company owed Caring £7,545,000, which he provided the company as an unsecured, non-interest bearing loan – it has bank debts of £13.29m. The company is owed £6,953,217 by sister company Bills Stores which demerged in June 2010 – it incurred an exceptional cost of £150,000 as a result of the demerger. Industry experts believe the company is to be worth between £90m and £110m. Cote was ranked seventh in the Sunday Times Fast Track 100 in December 2011 and scored second highest out of 50 UK brands in the CPL Training Customer Satisfaction Index conducted by Propel Info at the end of the summer.

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