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Wed 31st Oct 2012 - McMullen’s, O’Neill’s and The Restaurant Group

Story of the day:

McMullen’s making ambitious £7m investment in Marlow double opening: Hertfordshire brewer and retailer McMullen’s is investing an estimated £7m in two openings in two months in the upmarket Buckinghamshire town of Marlow. The company is proving its versatility by opening a food-led mid-market pub and a high street café bar under its Baroosh brand. The company is spending in excess of £1,650,000 on a Marlow pub that is being converted to its Chicken & Grill format – main course features a combination of grilled meat dishes and rotisserie-cooked chicken. McMullen’s bought the Britannia pub for in excess of £1m and is investing £650,000 in a refurbishment with an expected opening date of 20 November. Managing director Peter Furness-Smith told the local newspaper: “We are finding that pubs in good locations that are well invested with a warm and interesting design and consistently serve good quality food, beer and wines by well-trained, friendly staff are doing very well. The Britannia is in a good location and we plan to bring the rest to the pub. We believe that there is an opportunity for a really good pub in Marlow.” In December, the company will spend the rest of the £7m opening its seventh Baroosh café bar, a high street brand that has shown longevity since it was launched over a decade ago. The Baroosh opening will end a protracted three-year delay. Last year, two years after the initial planning application, the company was granted planning permission to convert the Lloyds Bank building on Marlow High Street. There had been considerable opposition to the original proposal, much of it based around the bank leaving town – Lloyds relocated on the High Street, occupying a former off-licence site.

Industry news:

Home Office publishes latest data on premises licences: The Home Office has reported that there were 202,000 premises licences in force in England and Wales on 31 March 2012. This is the same as on 31 March 2010 but two per cent more than 31 March 2009 (198,000) and three per cent more than 31 March 2008 (195,800). Within the 2012 total: 35,500 premises were licensed for on-sales of alcohol only (up one per cent on 2010); 51,100 premises were licensed for off-sales or supply of alcohol only (up five per cent); and 82,900 premises were licensed for on- or off-sales or supply (up one per cent). The remaining 32,500 premises were not permitted to sell alcohol, down nine per cent on 2010. Based on the 327 out of 350 local authorities (93 per cent) who provided data, there were 10,161 new premises licences applied for, of which 9,380 were granted (97 per cent of all decided outcomes) and 338 were refused. Newly granted premises licences accounted for around five per cent of the total number of premises licences in force on 31 March 2012. There were 6,812 variation applications made to change the terms of a licence, of which 6,298 were granted (97 per cent of all decided outcomes), and 196 refused (three per cent). There were 6,027 minor variation applications made to permit low risk changes to the terms of a licence or certificate, of which 5,667 were granted (95 per cent of all decided outcomes), and 267 refused (four per cent). Of the remaining types of change in 2011 and 2012, 4,386 premises licences were surrendered by the holder, 493 lapsed, one was suspended by the court and 92 were affected by a closure notice.

Fleurets highlights three victories on business rates: Property agent Fleurets has highlighted three victories in business rates appeals: The Black Horse in Norwich saw its rateable value drop from £40,000 to £30,000, saving just over £20,000 during the life of the list; The Brompton Bar & Grill in London had its rateable value reduced from £103,000 to £94,500, saving £14,000 over the course of the list; and The Punch Tavern, London had its rateable value slashed from £66,500 to £54,000, saving the ratepayer over £27,000 during the course of the list. 

Vapiano boss among those on Technomic briefing panel: Vapiano chief executive Phil Sermon will be on a panel of operators taking part in a Technomic briefing on UK and US foodservice trends in November. The half-day conference takes place on Friday 7 November and provides an overview of key UK and US foodservice trends. Others on the panel include Mitchells & Butlers senior marketing manager Paul Hulyer and Marks and Spencer Food On The Move buyer Andrew Sherick. Technomic states that the event will help attendees “assess existing and emerging competition” and help operators “position or reposition” their brand. The event takes place at The Cumberland, Great Cumberland Place between 7.30am and 12.30pm and costs £95 to attend. The link to book a place is 

Pub card game launched in Oxford: A new card game has been launched in Oxford that is based around the city’s 40 most popular pubs - each pub has its own card with a points value. Lorna Boyes, who invented the game with husband Mark and others, said: “The game was born here in Oxford. We all really enjoy discovering the city’s pubs with their different associations to the famous and infamous of Oxford. We enjoyed playing card games in pubs and this game started as a bit of fun but it sort of snowballed.” The aim of the game is to gain as many points as possible by completing a tour of pubs in Oxford. There are cards such as “dodgy kebab” and “punting mishap” which can lead to lost points and missed turns, while the “on your bike” card gives you an extra turn.

Disgraced former Enron banker turns Brighton multi-site pub operator: A former banker jailed for 37 months for his part in the Enron scandal is making a new life running two pubs in Brighton. Gary Mulgrew was one of the so-called NatWest Three who were implicated in the multi-billion dollar collapse of energy firm Enron. Having previously owned bars in London, he now co-owns the Brighton Rocks Bar, Rock Place, and the Noble House in Portland Road, Hove, which opened about six months ago following a refurbishment costing more than £200,000. He said: “Brighton is such a great place, such a great mixture of people and very accepting.”

Technomic – consumers open to using technology in restaurants more: Research and insights firm Technomic reports that a majority of consumers expect to use technology to order food at restaurants more often in the coming year, and very few (just 3 per cent) expect to use it less. Trending in the early stages of foodservice tech usage, consumers express the most interest in tableside touchscreen devices that enable them to self-order and pay, iPad/tablet menus and digital rewards tied to loyalty programs. “Technology can be used as a point of differentiation within the restaurant industry, especially with Millennials,” said Technomic executive vice president Darren Tristano. “Operators who stay ahead of the curve, in an increasingly competitive market, will need to evaluate the best use for the latest tech trends and decide how to integrate them into their operations in a way that’s efficient and beneficial to consumers. It should complement and enhance the restaurant experience for all age groups, which may mean having a printed menu available, as well as an iPad/tablet.” Not surprisingly, Wi-Fi and LCD flat-screen televisions are the most used technologies in restaurants.

Wine shortage is predicted: A worldwide wine shortage is forecast in the wake of a poor grape harvest, which will send production to its lowest level for 30 years. The shortage is likely to push prices up. France production is thought to be worst hit with a likely 20 per cent drop in production.  

Which? accuses hotels of misleading on discounts: Which? magazine has accused major hotel chains of advertising 80 per cent discounts that don’t exist. Premier Inn, Travelodge, Ramada and Thistle were all criticised by Which? “Special offers” such as half-price rooms turned out only to be available on 260 of 1,048 dates tested even though bookings were attempted on the day the promotion started.

Company news:

Mitchells & Butlers reports “incredibly positive feedback” at modernised O’Neill’s sites: Mitchells & Butlers has reported very strong sales data and feedback from customers at the two sites converted to an up-dated version of its O’Neill’s Irish pub brand. The company converted its Oxford site last September to its first Irish Pub & Kitchen with a site in Sutton following in May. Sites are brighter with lighter wood used and more soft furnishings. There is a greater emphasis on food and the drinks range has been premiumised. It includes Grey Goose vodka, plus an increased whisky range, including Maker’s Mark, Jameson Select Reserve, Redbreast and Midleton, and a gin offer that includes Bombay Sapphire, Tanqueray and Hendrick’s. Sutton manager Elaine Palmer said customers had responded “very, very positively” to brand evolution. “We have seen lots of new guests coming in and then becoming regulars. We are not changing O’Neill’s, we are enhancing what we have always been about.” Palmer added that the “sales data” makes it clear that customers appreciate the changes. The O’Neill’s brand has also created a charter that hangs in every site promising “a hundred, thousand welcomes” and a commitment to be the “best-loved pub on the high street”. Its winter menu has been launched with a recipe by customer Roz Tabberer – Traditional Irish stew topped with Thyme Cobblers – selected in a Facebook competition.

TLC Inns reports £1,000 boost from first full day of synthetic ice rink: TLC Inns, the award-winning multiple operated by Steve Haslam and Jo Drain, has reported that it saw around £1,000 of extra sales from its first full day of operating a synthetic ice rink at its The White Horse pub in Ramsden Heath. The ice rink, a £20,000 investment, has been installed for the winter months and has a capacity for 42 skaters at any one time – it is thought it’s the first time that a pub has installed an ice rink for the entirety of the winter months. Haslam said: “We calculate that around £1,000 of sales were attributable to families coming down to the pub to enjoy the ice rink. The feedback was phenomenal. As the rink gets better known we think it’s going to be a winner.” The rink is open from 12pm to 8pm during the school holidays and weekends – and between 12pm and 3pm and 4pm to 8pm the rest of the time. Haslam added: “We think the rink will be a great attraction for families but also for office parties, team-building events and other celebrations.” 

Douglas Jack – The Restaurant Group is discounting: Frankie & Benny’s operator The Restaurant Group has boosted average drinks prices by 11.6 per cent and is involved in aggressive food promotional activity, Numis Securities analyst Douglas Jack has reported. He argued that it will be difficult for the company to repeat the drink price hike in 2013. On promotional activity, he said: “Even now, at a time when promotional activity should be on the wane, The Restaurant Group is offering: children eat free or two courses for £9.99 (all day Sunday), two courses for £9.99 from 5pm Monday to Thursday and 25 per cent off for students all year at Chiquito; any breakfast for £5.95, unlimited soft drink refills for £2.70 (at lunch) and £6.45 children meals for main, salad, unlimited soft drinks and dessert at Garfunkels; and 25 per cent off all food on Monday evenings, all breakfasts (post 9am) for £5 and free refills on all coffee all day, every day at Frankie & Benny’s. EBIT margins were flat in the first half of 2012 despite like-for-like sales rising three per cent and average drinks prices rising 11.6 per cent. We expect margins to be flat in the second half, but estimate there is 40bps margin downside to 2013 forecasts if overall like-for-like volumes continue to remain flat and drinks price inflation slows to a more realistic five per cent.” His price target is 340p for the company’s shares with a reduce recommendation.

Newcastle nightclub in hot water over 59p drink offer: Newcastle City Council is investigating LQ Nightclub on the city’s New Bridge Street West after promoters advertised a shot of vodka or “J-bombs for 59p with doubles at 99p”. The club was formerly known as Liquid and Envy. Campaigners have branded the offer “disgraceful”.

All change as Luminar replaces former chief executive in operating Guildford club: Nightclub company Luminar has taken over a troubled Guildford nightclub formerly run by former chief executive Stephen Thomas’s We are: Dance company. As a new operator Luminar has been given six weeks to make improvements at the club and head off a licence review. Surrey Police previously requested a review of We Are: Dance Ltd’s premises licence at The Casino Nightclub in Onslow Street and wanted to see opening hours cut from 3.30am to 1.30am, following what it says is a large increase in violent incidents since January. But We Are: Dance left the premises last week and was replaced by Luminar, which also runs Dusk nightclub in North Street. Guildford police described the club as “the worst performing licenced premises” in Surrey and wants the introduction of random drug searches by staff among other changes.

Simon French – Spirit has good Tye-d pubs: Panmure Gordon analyst Simon French has issued a Buy recommendation on Spirit Pub Company shares with a Target Price of 75p, referring to the estate, in a pun on the chief executive Mike Tye’s name, as “good Tye-d pubs”. He said: “Spirit looks and feels more like a modern day pub company with a sensible balance sheet and multiple operating formats. Under the leadership of Mike Tye we believe the self-help measures within the company will lead to double-digit earnings growth for financial year 2013 and beyond, combined with circa four per cent yield, which makes Spirit an attractive investment proposition in our view.”

Sarah Beeny community pub is insolvent: A pub, The Barge Inn at Honeystreet, Wiltshire, that avoided closure thanks to a community buy-out and £400,000 of lottery funding is insolvent. The pub is rumoured to have an outstanding VAT bill of £100,000. The village buy-out of the pub’s lease featured in a one hour BBC documentary presented by Sarah Beeny, coinciding with the completion of the refurbishment.

Smashburger teams up with craft brewers in six markets: Smashburger, the US better burger concept that has appealed through Propel Morning Briefing for a UK franchise partner, has teamed with craft breweries in six key markets to produce beer and burger pairings on its menu. Chief concept officer Tom Ryan said: “The innovation, the vision, and I think just the delicate nature of distinguishing yourself among what has always been a pretty standard brand — beer — is a great match for what we feel like we’re doing with Smashburger, which is to innovate the burger.” Ryan launched the pairing initiative on 1 October in Smashburger’s home market of Denver, where it teamed up with New Belgium Brewing Company. Smashburger also has pairings worked out in New York, Chicago, Minneapolis, San Diego and Phoenix, and is working on Las Vegas, Dallas and Miami.

Host of US brands pick up Chipotle design cues: US restaurant chains Wendy’s, Taco Bell and Sbarro are all picking up design cues from Chipotle for remodeled next generation restaurants. “Chipotle and Panera raised the bar and changed what consumers expect,” Wendy’s chief marketing officer Craig Bahner told The Huffington Post. “That inspired us to try to offer a fast-casual experience at quick service prices.” The Huntington Post observed: “The Chipotle look that’s being so widely imitated today was originally developed in 1996 for the chain’s second location, in Denver, by an architect named Brand Gould. It involved mostly natural colours and materials like wood and metal, lots of high seating, a geometrically straightforward layout and industrial-style details, like exposed piping and concrete floors.”

Propel Opinion: There was a time when Sue Salisbury, design expert behind Mitchells & Butlers’ Premium Country Dining brand, seemed to be the most influential producer of design cues in the industry. In recent times, Chipotle can claim its fair share of imitators. Anyone who visits one of the new generation Pret A Manger coffee shops, for example, will notice the debt to Chipotle’s trademark blend of natural and industrial materials.

Giraffe launches two-for-one breakfast offer: Giraffe Restaurants began a two-for-one breakfast offer yesterday. The deal lasts until Friday 9 November, although it’s not available on Saturday, 3 November and Sunday, 4 November nor at airports and Kings Cross plus the Soho and James Street site and the new opening Giraffe Burgers and Cocktails, Castleford. In promotional literature, Giraffe states: “Come for brekkie with a pal and you’ll only have to pay for one.”

Pierre White re-opens former Merchant Inns pub: Chef Marco Pierre White has re-opened the Black Boy Inn at Milton near Banbury after a refurbishment. He said: “We are not a gastro pub - we are a pub selling good, honest food and serving a pint. It is just a very different feel. People who know the Black Boy, as soon as they walk in will see the difference.” The pub was formerly part of the Merchant Inns estate operated by industry veteran Robert Breare. Pierre White’s refurbishment comes two weeks after he decided to step away from the Rainbow Inn, Cooksbridge, near Lewes after his business partners decided it had gone too upmarket.

Jason Atherton to open a second London restaurant: Chef Jason Atherton is to open a second London restaurant, The Social Eating House, in Soho’s Poland Street. The new venue is on the site of the former Japanese restaurant Ukai and is a few streets away from his first site, Pollen Street Social.

Shepherd Neame pub reopens with coffee shop and general store: Shepherd Neame’s Anchor pub in Faversham has diversified on re-opening with a coffee shop and general store under new licensee Andy Martin. The pub’s new “general store” will open daily from 8am serving coffee and cake and tea and toast. Martin is a banker with a farm in Hernhill with the pub run day-to-day by Grant and Natalie Ravencroft. Grant said: “What we’re offering is an opportunity to come and breakfast in relaxed surroundings, meet friends for a coffee and a locally-made cake or simply browse our general store. Customers will be able to enter the coffee shop area via a separate entrance and there will be a range of luxury produce such as jams and chutneys for sale.” Martin added: “Our restaurant menu will be 50 to 60 per cent fish-based, with meat dishes sourced from my own farm. The coffee shop is intended to meet the needs of diverse locals, from walkers to mums.”

Mitchells & Butlers’ Toby Carvery starts two for £10 newspaper deal: Toby Carvery, the Mitchells & Butlers brand, has begun a newspaper voucher campaign that offers two carveries for £10. The deal lasts until Saturday 24 November and is valid each day apart from Sunday.

Wear Inns – we paid £6.4m for the nine Tattershall Castle sites: Wear Inns, the fast-expanding north east managed pub operator that is backed by the Business Growth Fund and NVM Private Equity, has reported it paid £6.4m plus £400,000 of costs to buy nine pubs from Tattershall Castle Group at the end of May. The fast-expanding company has added 11 pubs to the 15 sites it operated at its year-end on 31 March. The company reported that turnover for the most recent year grew to £7,419,769 from £6,229,122 the year before. Operating profit was £634,519 (£640,653 in 2011) and pre-tax profit was £63,906, down from £96,931 the year before. Wear Inns received an additional £10m from investors in May, £8m from the Business Growth Fund and £2m from NVM Private Equity. Of the Tattershall acquisition, the company stated: “These pubs are being refurbished and after management principles are applied they are expected to make a significant contribution to the future results of the company.” Last week, Wear Inns bought two Orchid pubs, The Colonel Prior in Sunderland and The Park in Bradford. NVM has been an investor in the business since 2006 when it was founded by John Weir and former Pubmaster boss John Sands, now chief executive 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. In the most recent financial year, the company reported it benefited from full-year trading at five sites bought the year before. Sales increased by 19.14 per cent and there was a 18.97 per cent increase in gross trading profit. The company paid £90,000 in bank fees to NatWest to replace a banking facility with a longer one and £135,000 in legal and professional costs in relation to raising further funding. 

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