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Tue 13th Nov 2012 - Prezzo, Wagamama and Starbucks

Story of the day:

Technomic sketches out US brands’ evolution strategies: Foodservice insights firm Technomic has sketched out the key strategies being employed by US restaurant brands to out-perform in the recession. At a conference in London on Friday, executive vice president Darren Tristano outlined a range of diversification and point-of-difference strategies that are working for eight mature or medium-sized companies in the US as they seek to evolve. Subway, which has 25,000 units, has created a brand extension that puts an emphasis on more comfortable interiors. Mirroring coffee shop operators, the sandwich firm has opened sites that have leather armchairs, LCD televisions and free Wi-Fi. The new generation sites have stone-walls and natural wood flooring. McDonald’s, which has 14,000 US outlets, is shifting refurbished sites to European-style interior styling to create a “lingering” destination. New generation sites have moved away from functional 1970s-style interior to more elegant internal areas with “wood, leather and stainless steel accents”. The Country’s Best Yoghurt (TCBY) brand, which has shrunk from 2,000 sites to 500 now, has shifted from a full-service to self-service format and also contemporised interior decor plus starting co-locating with its second brand Mrs Fields, offering cookies and frozen yoghurt on the same sites. Restaurant giant Darden has created savings on a new site by co-locating its Oliver Garden and Red Lobster brands with shared kitchens, storage and toilets to reduce build cost. Each brand has its own entrance, dining room, bar and menu within a single building. Firehouse Subs is driving sales through community out-reach in the form of contributing to local fire brigades, in particular. Tristano reported that the amount of money raised for external causes had a direct correlation with site turnover. Ruby Tuesday had moved away from the middle ground by shifting upwards to open upscale fish brand Marilyn and Rays and downward to focus on fast-casual Mexican brand called Lime Fresh Mexican Grill. Red Robin had evolved Burger Works to offer a simpler menu with fewer items to allow an emphasis on speedier service.

ALMR National Restaurant Show Study Tour in Chicago open for bookings: The Association of Licensed Multiple Retailers (ALMR) has opened its study tour to the National Restaurant Association Show in Chicago in May 2013 for bookings. Next year’s visit takes place between Thursday 16 May and Monday 20 May. The ALMR launched its first study tour trip to the NRA show this year, with the trip led by Propel Morning Briefing managing director Paul Charity. The NRA draws 58,000-plus industry professionals from all 50 states and 100 countries, all seeking the newest innovations and up-to-the-minute information about trends and issues. The ALMR trip provides: insights from industry experts on the rise in fast-casual dining, social media, new and emerging brands, menu development, staff management and a host of other issues – with 70 free education sessions; involves a tour of Chicago’s hottest concepts and a market overview briefing sessions from US experts. ALMR chief executive Nick Bish said: “Our first trip in May this year was a tremendous success with our attendees reporting they had benefited enormously from the visit to the Show and the chance to study the key trends in the innovative US market.” Paul Charity, managing director of Propel Info, said: “The NRA show is a fantastic opportunity to find fresh inspiration and understand the emerging trends shaping the fast-changing US market.” To book a place, e-mail Jo Charity on or call her on (01444) 810304. Places are limited.

Industry news:

ALMR reports intensive work to strengthen industry Code of Practice: The Association of Licensed Multiple Retailers (ALMR) has told its members that it has been involved in detailed discussions with the British Beer & Pub Association to ensure a variety of key issues in the relationship between landlords and licensees are codified in a strengthened Code of Practice. Head of strategic affairs Kate Nicholls said: “That work appears now to be nearing conclusion and has focused around those issues which are capable of codification - the information provided ahead of new lease negotiations and rent reviews, establishing principles of disclosure and justification of assumptions as well as timetables for this, dilapidation and disputes, more stringent requirements relating to AWPs, insurance and flow monitoring. At the same time, we are pressing for an independently chaired, over-arching regulatory board.” The Secretary of State has written to ALMR and other trade bodies asking for a progress report on the implementation of BBPA plans for enhanced self-regulation of tied tenancies and leases unveiled in December last year. Responses are due by 23 November. Nicholls added: “We will be meeting the Deputy Director of Competition Policy at BIS in advance of that. In response to a Parliamentary Question, the Minister responsible confirmed that after this, the government will be taking a decision on whether the current system is working and any next steps. We hope to be in a position to brief members more fully once those negotiations are concluded, and we will be putting together a series of seminars for members on the new proposals as well as exploring whether there is any cross over to existing codes on commercial leases.”

Starbucks defends tax position in the UK: Starbucks global chief financial officer Troy Alstead has told MPs that the UK business paid low levels of tax because its concentration on outlets in London meant property cost are 25 per cent higher than in the US. The company also conceded to MPs that it pays six per cent of UK revenue in royalties to Amsterdam in payment for the use of intellectual property and had secured a favourable “tax ruling” from the Dutch government. Alstead also revealed that it buys all coffee from Switzerland where the tax rate is 12 per cent and charges a 20 per cent mark-up to subsidiaries. He told MPs he felt “terrible” about the negative public perception of the company in the UK and that Starbucks did everything it could to “behave ethically”. He argued Starbucks had been a failure in the UK, pursuing an aggressive growth strategy that left the company saddled with a string of badly performing shops. “This is the most competitive market in the world,” Alstead added. Meanwhile, a lobby group is to target Starbucks coffee shops next month as part of a campaign to spotlight how the government’s spending cuts are affecting women. The group, UK Uncut, argues that money being lost through tax avoidance measures by multi-national companies could fund public services being affected by the coalition’s austerity measures. The group said it will transform Starbucks stores into “refuges, creches and homeless shelters” to show how the cuts are having a disproportionate effect on women. The action will take place on 8 December, three days after the Chancellor’s autumn statement.

An alcohol-free pub is planned for Cardiff: An alcohol-free pub is planned for Cardiff as part of a plan to help fund a project to tackle drug and alcohol addiction in the capital. The man behind the plan is Wynford Ellis Owen, who fought his own battle against alcoholism and is now chairman of the Welsh Council on Alcohol and Other Drugs. Although still in its early stages, Ellis Owen says he hopes the dry pub would be near the city centre and individuals who have previously battled with addiction would work as staff.

Company news:

Fiveeightzero buys the freehold of the John Salt in Islington: London bar operator Fiveeightzero, led by Dan Crouch, has completed the freehold purchase of the former Keston Lodge bar on Upper Street, Islington – now called John Salt - for £3.25 million. Following the surrender by Mitchells & Butlers of its interest in the property, which was initially purchased leasehold in a joint venture with the company, it was able to acquire the property from the private landlord. Fiveeightzero also operates the Owl and Pussycat pub in Shoreditch, a Brakspear pub, and the Fellow in King’s Cross. Chef Ben Spalding, who has worked for Gordon Ramsay and Simon Rogan at his Roganic venture in London, has joined forces with Fiveeightzero for a six month residency. Spalding has said that John Salt will offer “serious cooking with rare ingredients”, with tasting menus of 4, 8 or 12 courses on the venue’s mezzanine level and more straightforward food at the bar. Paul Tallentyre, director of pubs and bars at Davis Coffer Lyons, which acted on behalf of the company, said: “This was an excellent opportunity for a flourishing Pub Co to add significant value to its portfolio in the current market. Freehold properties are a rare find in the market and Fiveeightzero will be able to add substantial value to the property and company. Fiveeightzero are now keen to acquire additional freehold and leasehold opportunities in London.”

Prezzo opens 200th site today: Restaurant group Prezzo is opening its 200th restaurant today (Tuesday November 13). The company is opening a new Prezzo restaurant in Marlow, Buckinghamshire, on the site of a former Brasserie Gerrard. It will take the total number of Prezzo Italian restaurants to 175. In addition, the group has 22 Chimichanga Mexican restaurants, two Caffe Uno and one Chimis Burrito Bar. Prezzo chief executive, Jonathan Kaye, said: “We are thrilled to have reached this milestone. Our Italian and Mexican restaurants continue to prove popular with diners across the UK and we are looking forward to opening many more restaurants in the coming years.” Prezzo was founded by Jonathan Kaye in 2000.

Loungers wins planning consent for shop conversion in Portishead: Café bar operator Loungers, headed by Alex Reilley and backed by Piper Private Equity, has won planning consent from North Somerset Council to convert a Budgens site in Portishead high street to a new 130-seater cafe bar, creating 20 new jobs for the town. The plans include converting part of the building on the side into a separate retail unit, which would be sublet. The building would undergo a £500,000 refit and refurbishment with the main restaurant on the ground floor and toilets and ancillary accommodation on the first floor, with an opening planned for Spring 2013. It is understood that managed operator JD Wetherspoon also put an offer in for the building. Reilley said at the time of the application: "Our cafe bars are designed to appeal to a wide range of people throughout the day. Portishead has a vibrant and lively high street which you can't help but be impressed with.”

JD Wetherspoon scores highest in pub frequency visits, lowest in service and ambience: Managed operator JD Wetherspoon has scored highest of five major brands in terms of visit frequency but lowest in terms of service, ambience and kid friendliness in a survey of consumers by insights firm Technomic. Of those surveyed, 54 per cent reported they had visited a JD Wetherspoon in the last 30 days compared to 17 per cent for a Harvester & Grill, 14 per cent for Toby Carvey, 12 per cent for a Brewers Fayre and nine per cent for a Hungry Horse. However, Wetherspoon ranked lowest of the five brands for service, ambience and kid friendliness with a score of 59 per cent compared to 76 per cent for Hungry Horse, 82 per cent for Harvester, 83 per cent for Toby Carvery and 85 per cent for Brewers Fayre. However, Wetherspoon scored just below the industry average of 87 per cent for an overall rating of their pub experience with a score of 85 per cent – Hungry Horse scored 81 per cent, Brewers Fayre scored 84 per cent, Harvester achieved a score of 90 per cent and Toby Carvery gained a 90 per cent approval rating. 

Stonegate Pub Company launches thirteenth Missoula bar – and Luna nightclub next door: Managed operator has opened its thirteenth Missoula in Solihull – along with a nightclub next door called Luna after a six-figure refurbishment. General manager Emma Pugh, said: “The town is in need of a bar with a touch of sophistication and Missoula certainly oozes that, whilst in Luna, I’m proud to say we’ve created a nightclub that rivals the best Birmingham has to offer. With its exclusive seating layout and mezzanine level framing the dancefloor, Luna has an intimate and luxurious feel and is sure to be on the radar of any discerning West Midlands clubber.”

Almost 400 protests lodged over plan to turn former Orchid pub into a KFC: Nearly 400 residents have formally objected to plans to turn a historic pub, the Organ & Dragon, formerly run by Orchid as a Thai restaurant and pub on a lease from Punch Taverns, into a Kentucky Fried Chicken outlet. The Organ and Dragon, an 18th Century pub in London Road, Ewell, shut down in July and was bought by KFC, which has submitted a planning application to Epsom and Ewell Council to turn it into a restaurant and fast-food outlet. The local authority received more than 380 objections and a petition against the plan attracted 1,000 signatures. There were just seven letters in support of KFC’s plans.

Former Greene King site to become pub and bed and breakfast: Two businessmen are set to relaunch the Clarendon pub in Colchester and open a new guest-house on Colchester’s North Hill. James Moreno and Carl Blanchette bought the Clarendon, in Harwich Road, from Greene King three months ago. It is set to reopen in December, rebranded as the Eastgate Inn - bar and B&B. They also want to convert Grade II listed offices in North Hill, currently home to law firm Thompson Smith & Puxon, into a 12 bedroom guest-house.

Derwent Manor Hotel on the market for £1.9m: The Derwent Manor Hotel, Allensford, near Consett in County Durham, set in around 20 acres of Northumberland countryside, is on the market for £1.9m. The hotel has 48 en suite bedrooms, including five suites, one of which is the bridal suite. There are also eight self-contained cottages, which are separate, and a number of function rooms. The Great Hall, the largest, can hold up to 250 guests. It has a purpose-built leisure facility, which includes a swimming pool, sauna and gymnasium. David Lee, who is handling this sale at Christie + Co, said: “This is a rare opportunity to purchase a hotel of this size in the heart of the Northumberland countryside. Accounts to year-ending April 2012 show a turnover of £1.62 million and detailed trading information is available to prospective buyers after viewing the hotel.”

Hall & Woodhouse confirms opening date for Portishead Quays Marina new-build made out of containers: Dorset brewer and retailer Hall & Woodhouse will open its new Portishead Marina pub made out of 28 recycled shipping containers on 20 November. The contemporary two-storey building echoes many of the design themes of Hall & Woodhouse in Bath, but with the unique twist of incorporating shipping containers to pay homage to the quays’ industrial marine heritage. David Hoare, retail director at Hall & Woodhouse, said: “To see this project come to life will be a great day for all the team. Thanks to the use of the recycled containers, the building will look incredible but, as with all our bar-restaurants, Hall & Woodhouse Portishead will be about more than just style. The menu will be a British interpretation of the bistro and brasserie concept, with dishes ranging from our much loved and award-winning steak and Tanglefoot ale pie to our cheddar glazed smoked haddock.” As part of Hall & Woodhouse’s commitment to the communities in which it trades, part of the building will act as a marina club house, operating 24 hours a day, seven days a week and providing services to boats and crews, including staff accommodation, lounge areas, toilets and showers. Hoare added: “The different areas, ranged over two floors, reflect the hospitality of the Woodhouses and provide links back to the brewery in Blandford Forum; from the bar, pantry and common room on the ground floor to the dining room above. We are delighted with the look and feel of the restaurant and now we cannot wait to see what the people of Portishead and the surrounding area think!”

Former Nobu chef to open second Wabi: Former Nobu head chef Scott Hallsworth will open the second branch of his Japanese restaurant concept Wabi London, on 26 November at a 10,000 sq ft site located in Lincoln’s Inn Fields near Holborn. Hallsworth already operates a Wabi restaurant in Horsham. Leisure property advisors Davis Coffer Lyons brokered the deal on behalf of leading hotel and property developer, Masterworks Development Corporation. Australian-born Hallsworth spent six years at Nobu in London before being handpicked by Nobu Matsuhisa to launch Nobu Melbourne in 2007. This new venture will see him join forces with entrepreneur André Cachia. Hallsworth said "Horsham has been crucial to enable us to enter the London market with a very strong proposition. In Holborn we have far better access to amazing ingredients and we think that our highly creative edge will be far more appreciated in London. Diners can expect to see a fresh approach to this type of cuisine with the use of excellent ingredients."

Wagamama opens in “statement building” in Lincoln: Noodle chain Wagamama has opened in a “statement building” on Lincoln’s Brayford Pool. The unique building floats on the old Roman waterway and is a unique stand-alone piece of architecture that combines dark wood, deep reds and grey metal. A local reviewer said: “Inside it is a contrast, light, open and airy.” 

Bramwell strengthens management team: Bramwell Pub Company has further strengthened its newly formed commercial team with appointments in both the marketing and buying functions. Simon Lucas joins Bramwell in the first of the newly created roles as drinks marketing manager and will report into Kate Eastwood, head of sales and marketing. Lucas, who has previous experience with Stonegate Pub Company and JD Wetherspoon, will be responsible for the development and implementation of the wet-led calendar of activity in the group’s 194 pubs. He will also work with key suppliers and partners to further develop an innovative and compelling drinks offer as well as new product development. Procurement manager Laura Summerell will work with Bramwell’s head of procurement, Sarah Simmonds to help further streamline the company’s purchasing function in addition to focusing and negotiating on central contracts across a number of several areas within the business. Laura joins Bramwell from American IT hosting company Rackspace. 

Inception Group buys Soho nightclub: Inception Group has bought the Lease of Bureau nightclub in Soho’s Kingly Court Group for an undisclosed sum. Bureau Nightclub was originally the venue of the infamous hostess club, Tatty Bogle, which was popular with old English explorers and service men until it was eventually closed in the 1920’s. The lease for the club was assigned to The Inception Group, who will add the club to the staple of their existing venues, Bart’s, Maggie’s and Restaurant Bunga Bunga. Agent was Shelley Sandzer.

Christopher Regan takes third Lincoln site as Kurnia exits pub retailing: Businessman Christopher Regan, who is only 23, has taken his third site in Lincoln – Kurnia’s Cloud Bar, which is the company’s last remaining site. Kurnia boss Michael Kheng will concentrate on his Kurnia Licensing Consultancy, a consultancy Michael set up over seven years ago to assist the hospitality industry in legal and training matters. Kheng said: “Although we are no longer retailing my company still retains the freehold of some pubs within our property portfolio so I guess we are still involved in a small way in retailing as I need to make sure our tenants in the sector are supported. My time is being taken up more and more dealing with licensing issues around the country and I found I had less time to commit to the retail side of the company. It will be sad in a way not to be retailing but life moves on and you have do what you enjoy doing. I have over 400 clients over England which certainly keeps me busy.” Regan two other outlets in Lincoln - last year he invested over £400,000 in the city’s Ye Olde Crowne Inn and later this month opens the Lincolnshire Red Steak House on the site of a former city nightspot after a £300,000 refit investment. He also owns the Broadstone Bar in Retford. Regan turned around a Manchester student bar after securing funds to buy the lease and sold it on for a handsome profit. He then worked abroad in property development around the Red Sea before returning to England to start up in the hospitality sector. Christopher says his long term goal is to create a group of pubs and bars that are different, unique and fresh for the industry.

Mexican brand Poncho 8 to open third site: Poncho 8, the London-based emerging burrito concept, will open a third site at the end of November, along with several sites planned for 2013, as it moves closer to its goal of opening 20 outlets in London by the end of 2015. Poncho 8, which was founded by college friends Frank Yeung and Nick Troen, is opening in Leadenhall - existing sites are in Spitalfields and St Paul’s. The group opened its first site in September 2009, and has since gone on to achieve tremendous success in a short space of time. The London Evening Standard magazine recently named Poncho 8 as having London’s best burrito. “At Poncho 8, we’re delighted to be bringing our fresh Mexican food to a third outlet here in London, just a month after our third birthday,” said the company’s co-founder Nick Troen. “We’re constantly updating our offering to ensure that the City’s workers have an exciting, healthy meal when they visit our restaurants.”

JD Wetherspoon acquires three Orchid pubs: Managed operator JD Wetherspoon has bought three pubs from rival managed operator Orchid for an undisclosed sum, Propel Morning Briefing understands. The company has bought The Waggon, 2 Market Place, Chapeltown, Sheffield (population: 10,047), The Clothiers, 56 High Street, Yeadon, West Yorkshire (population: 11,449) and Parsons Barn, Frobisher Way, Shoeburyness, Essex (population: 19,911). Propel Morning Briefing understands the deal is due to complete today. The pubs are part of a small parcel of sites that Orchid has decided to exit – Wear Inns bought two more sites from the Orchid disposal estate a fortnight ago. In its most recent financial year, Orchid Pub Company, headed by Rufus Hall, reported that average weekly sales per pub climbed by £200 each in 2011, compared to the year before, to hit £13,900. The company stated: “The increase in turnover has been driven by a combination of our continued investment in people, providing customers with high quality food, drink and service, and the acquisition of a further ten pubs in 2011. Trading for the first three quarters of the year ending December 2012 has performed ahead of expectation which has been most encouraging given the adverse impact of the wettest British summer for 100 years and the slowdown in sales experienced during the Olympic period. Across these months our like-for-like sales growth has out-performed the market as measured by the Peach Tracker and Ebitda conversion has also been ahead of expectation.” The company also reported that its Parkmill Pub Management Company produced an income for the company of £1,060,000 in the year. A total of £20m will be invested in Orchid refurbishments in the next three years. The company stated: “The focus of this investment will be in the core estate, which has largely been uninvested since 2007 and repositioning some units to more food-led offers. By the end of the 2012 financial year we are on course to have reinvested around £3.5m on 19 houses.” Orchid restructured in February, with Deutsche Bank becoming its sole financial backer. Orchid turnover stands at £179.6m, up 3.7 per cent in its most recent year.

Thai restaurant chain set to open sixth site: Thai restaurant chain Chaophraya will open its sixth site this Thursday (15 November), a 200-seat venue in Edinburgh. Named after the main waterway in Thailand, the first restaurant opened in Leeds and was followed by openings in Manchester, Liverpool, Birmingham and a site in Glasgow earlier this year, the first in Scotland. The new £1.2 million investment is situated on the grounds of the former Oloroso restaurant in Edinburgh’s Castle Street.

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