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Morning Briefing Strap Line
Thu 15th Nov 2012 - Heineken, Nando’s and Starbucks

Story of the day:

Heineken launches new name for pub estate and offers licensees industry-leading flexibility and support: Heineken has given its pub company a new name – Star Pubs and Bars. The move comes almost a year after it bought the freeholds of the RBS-owned Galaxy estate of 918 pubs to add to its Blue Star estate of freeholds to create a 1,300-strong high quality estate. The new company has also expanded its range of leases to increase flexibility for licenses. A new three-year “Business Start-up” Agreement has been created for pubs where operators have the opportunity to significantly increase trade. Entry is low cost (starting at £10,000 including a flat £3,000 deposit) and - in a groundbreaking move for the pub industry - operators can terminate their contract with three months’ notice at any time. A “First Year Support Package” is also being launched for pubs requiring additional financial backing to fulfill their potential. The package is designed to assist with cash flow in the crucial first year, giving operators the time to establish themselves and build up trade. Measures to keep cash in the business are tailored by pub ranging from payment of business rates and Sky license fees to additional discounts on beer. The agreement also incentivises and rewards success - beer sales exceeding target attract an additional discount and cash bonuses of up to £5,000 will be paid for high scores in mystery visits. The company is changing its standard agreement from a five to a rolling three-year term to offer greater flexibility to operators. Terms of 10, 15 and 20 years are being introduced as standard options on its FRI (Fully Repairing and Insuring) agreement and all such agreements can now be assigned after two years. The new name also marks the start of a 12 month roll-out of new initiatives to help existing and future lessee partners increase profits, reduce overhead costs and decrease time spent in the back office so they can focus on driving their businesses forward. The first of these will include: a comprehensive food support programme providing a range of off the shelf menus backed up with the kitchen investment and training required to make a real success of food; a choice of high quality coffee solutions; on line training so lessee partners do not have to leave their pubs to benefit and a new support focused website for existing lessees. Star Pubs and Bars trading director Chris Moore said: “Our new Star Pubs & Bars identity is not just a name change. It is intended to reflect the many developments behind it that make a real difference to people’s businesses, both in terms of attracting new talent into the industry at a time when business confidence is low and bank lending tight and making it easier for all our lessee partners to build their businesses by creating further ways of increasing profits and reducing costs. Despite the economic downturn, integration has enabled us to continue to invest in our estate, critical to ensuring that Star Pubs & Bars pubs continue to have the highest average sales turnovers of any national leased pub estate in the UK.”

Propel Opinion by Paul Charity: The tenanted pub market has become, at long last, a fierce area of competition to attract the best licensees through offering better support and more flexible leases. It’s a contrast with the very similar leases that the major companies once offered. Heineken is now promising new licensees they can leave at any point with three month’s notice. This is, above all else, sensible. If licensees are simply not cut out for running a pub, it’s in everyone’s interest to let them leave. Heineken has moved within three years from operating pubs for third party owners on a management contract to owning the freeholds of 1,300 high quality pubs. The incentive is there to invest for the long term and move to align its interests with licensees by working together to increase the profit pie. Above all, it’s good to see another tenanted pub company moving in the direction of retail focus.

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. To book a place, e-mail Jo Charity on or call her on (01444) 810304. Places are limited.

Industry news:

Starbucks makes major move to create tea bar chain: Starbucks is to buy tea store chain Teavana for $620m with the aim of repeating its success in the coffee market. Teavana has 300 shopping mall sites in the US that sell loose-leaf, andexotic teas. The company aims to open stand-alone Teavana stores in the United States and abroad but add tea bars that serve prepared drinks in existing Teavana stores. Starbucks began in the same way in the coffee market – its first 11 sites only sold whole bean coffee. “We will do something very similar over time with Teavana - we will do for tea what we did for coffee,” chief executive Howard Shultz said. The deal marks the third acquisition over the past year from Starbucks, which is exploring avenues of expansion. Shultz added that tea is “the opportunity of a lifetime”. The tea market is worth an estimated $40 billion a year globally. Chief financial officer Troy Alstead said: “Tea is the second most-consumed beverage in the world, second only to water. We should be leading in tea.”

Collyer – Coffer Peach Tracker may prompt caution: Deutsche Bank leisure analyst Geof Collyer has argued that yesterday’s news from the Coffer Peach Tracker showing like-for-like sales among 25 major companies were negative in October may prompt caution ahead of the forthcoming reporting season, in the coming month, when most quoted companies unveil their results. He said: “It was the sixth time in 2012 that the Pubs & Restaurants tracker has been below the BRC High Street retailers’ like-for-likes data. In what seems to have been a more than usually volatile year, this was the fifth month so far in 2012 that pub sector like-for-likes have also been negative and (yesterday’s) news may spread a bit of caution around ahead of the pub reporting season which kicks off next week. We would point out that all of the major pub retailers have been reporting like-for-like performance ahead of the CPBT index, and that total sales are also tracking somewhat higher than the CPBT. Therefore, we do not anticipate any unpleasant surprises in the forthcoming pub reporting season. Greene King (buy) has the best like-for-likes and total sales record in the sector.”

App to find Glasgow’s safest pubs and clubs to be launched: A new free app is to be launched today that provides a guide to Glasgow’s safest pub and clubs. Software developed by Glasgow Community & Safety Services (GCSS) will allow residents and visitors to use their smart phones to find almost 100 venues recognised for their safety records. It will be launched at a ceremony in Glasgow's Grand Central Hotel today (Thursday) to honour the winners of the 2012 Best Bar None awards. The Best Bar None awards recognise licensees who take steps to prevent problems such as binge drinking and anti- social behaviour.

London Designer Outlet signs up two more operators: London Designer Outlet, the Wembley area retail and leisure centre that aims to recreate the designer village feel of Bicester that will open in autumn 2013, has signed two more hospitality operators. The development, part of a 87-acre redevelopment scheme around Wembley Stadium, will offer 85 retail outlets and 15 restaurants and bars plus a nine-screen Cineworld cinema. The latest restaurant operators signed up to the venue are chicken chain Nando’s and Italian coffee shop Lavazza. Already signed up are Frankie and Benny's, Prezzo, Las Iguanas, Handmade Burger Co - TGI Friday's already operates a restaurant at the development.

Papa John’s battles $250m lawsuit over unsolicited text messages: A class action has begun against pizza firm Papa John’s in the US, calling for as much as $250 million in damages for the alleged transmission of 500,000 text messages to consumers who claim they did not consent to receive such texts. Three named Papa John’s customers are suing for allegedly violations of the Telephone Consumer Protection Act. Each alleged violation of the act, which consists of a brand sending an unsolicited advertisement via phone call or text message without prior consent, carries up to $500 in statutory damages.

Joe Lewis burrito brand Freebirds to hit 92 sites by end of 2012: Freebirds, the burrito brand owned by M&B shareholder Joe Lewis trough his Tavistock Leisure business, is expected to reach 92 units before the end of the year, with another 20 in the pipeline for 2013. Tavistock has expanded Freebirds rapidly since it was acquired at 19 units in 2007. Tavistock also owns about 35 full-service restaurants across the US.

Last few tables available for the ALMR Christmas lunch: There are just a few more places left for the best-attended December event in the industry, the ALMR Christmas lunch on Thursday 13 December, which draws around 1100 people each year –there are only around 30 places before the event reaches capacity. Ticket prices are £169 plus VAT for a ticket or £1640 plus VAT for a table of ten. To book a table, e-mail Matt Steinhofel on Strategic affairs director Kate Nicholls said: “The Christmas lunch will put the icing on what has been an outstanding twentieth anniversary year for the Association – membership has increased by more than a third as we have reached out to casual dining, late night and new entrepreneurs to truly become the voice of the sector.”

Company news:

Faucet Inns sells pub in Shepherd’s Bush to developer: Faucet Inns, the London multiple headed by Steve Cox, has sold The Goldhawk in Shepherd's Bush to a developer who is likely to turn the pub into offices. The loss of the pub follows the demise of The Stinging Nettle, The Rising Sun and The Askew Arms in Shepherd’s Bush.

Only Pub Company opens pop-up pub at former Grand Union site: The Grand Union, a Punch Taverns site in Ravenscourt Park handed back to the company by operator Grand Union Group, has been taken over by seven-strong operator The Only Pub Company, headed by Bob McArthur, who is running it as a pop-up whiskey, burger and rib bar until Christmas called BBQ Whisky Beer. An early review states: “A large bar to the left is stacked full of whiskies, beers and liquors. As we ordered our drinks I admired the pub’s decor, old fashioned wooden tables, leather arm chairs and oversized lamp stands creates a vintage rustic feel.” McArthur also runs Punch’s Devonshire Arms, off Oxford Street. Despite a trading area of only around 1,000 square feet, the Devonshire Arms has a very strong beer trade with around 250 barrels a year. Punch business development manager Steve Charlton told Morning Briefing: “It re-opened about two weeks ago and is getting great customer feedback.” The Only Pub Company also runs four Young’s tenanted pubs and a free-of-tie lease venue.

All Our Bars in negotiations over lease on third Punch Taverns site: All Our Bars, the London operator headed by Paul Wigham and Stephen Brook, are in negotiations to take a lease on its third Punch Taverns pub of 2013. The company is running the Circle Bar in Clapham, which has been refurbished after a fire and is now looking at taking a lease. It has already opened The Essex Arms, in Brentwood and the Garrison in Shoeburyness after co-investments with Punch. Wigham told Morning Briefing: “Punch has been fabulous and they’ll be more Punch sites that we open. The company is really good to deal with – very sensible and it does things properly.” Meanwhile, All Our Bars will re-open its Wishing Well site in Hayes, Middlesex tomorrow (Friday) after a refurbishment that evolves the offer to a more subtle version of its traditional Irish bar offer. 

City Pub Company sets opening date for first brewhouse: City Pub Company, the EIS company led by Clive Watson and David Bruce, will open its first brewhouse, The Henley Brewhouse, on Thursday 22 November. Guests of honour include Henley sports stars Zac Purchase MBE, Lightweight Double Scull Silver Medal winner at London 2012 and Alex Gregory, Coxless Fours Rowing Gold Medal winner at London 2012. The Henley Brewhouse occupies the site of a Grade II-listed building that served as a police station until 2003 and has remained empty since. The freehold brewhouse retains the character of the building by transforming the cells into dining booths complete with the original bars that were used as doors. Its glass-walled microbrewery is able to produce up to 2,000 pints of cask beer a week. Along with its own cask beer, the Henley Brewhouse will also sell local brews and interesting wines, including vintages grown at the Chiltern Valley Winery, near Hambleden. Food ingredients, too, will be sourced from local suppliers such as Gabriel Machin Butchers, Rockwellend Farm and Sandy Lane Farm. A second brewhouse site is set to open in Cambridge.

Oak Taverns to open first Punch Taverns pub at the end of November: Oak Taverns, the multiple headed by Simon Collinson that operates 25 pubs, will open its first Punch Taverns pub, The Black Horse in Barnet, which will be run as a brew-pub, on 28 November. The pub, described as a classic Victorian pub in Barnet’s golden triangle, is receiving a £350,000 investment from Punch Taverns that will double its size. Oak Taverns will open a new brewhouse on the site, to be called Barnet Brewery, early in the New Year. Oak Taverns already operates two brew-pubs in its subsidiary Ridgeway Pub Company - The Swan Inn at Faringdon and The Cross Key at Thame. Director Simon Collinson told Morning Briefing earlier this year that the company is enjoying “good growth” at the two venues. Oak Taverns also has a 50 per cent stake in a company called Recovery, which currently operate three leased pubs in Norfolk in partnership with Eddie Scott. 

Edinbugh’s oldest curry restaurant to expand to Perth: Khushi’s, which opened the first curry restaurant in Edinburgh, is to spent £1m expanding into Perth. The company, which also operates Mithas in Dock place, Leith, has begun work to convert a dilapidated Perth church into a restaurant. Planning consent has previously been granted for the change of use of St Paul's Church in Perth's High Street. Designed in 1799 by architect John Paterson and built in 1807, the B-listed building has fallen into disuse, with its fabric suffering badly in recent times. JD Wetherspoon looked at converting the church into a pub in 2008 but the plan prove too expensive.

Nando’s targets Newquay for first Cornish opening; appoints agency to oversee global digital strategy: Nando’s has confirmed it is looking to open its first Cornish site in Newquay although it is still looking for a site. A spokesperson for Nando's told This is Cornwall: “It's no lie we're looking to open a Nando's restaurant in Newquay. After success from our nearby Exeter and Plymouth sites, we feel a restaurant in Newquay will offer Nando's a great opportunity to expand its South West region.” Meanwhile, Nando’s has appointed TH_NK to handle their digital strategy. The agency has been appointed by Nando’s to develop and implement a global digital strategy as the restaurant aims to tie together the experience for customers from all regions. Paul Appleton, marketing director at Nando’s Group, said: “The team from TH_NK will be working with marketing directors from all over the Nando’s World to build a common approach to our digital presence. They’ll also be working closely with us to develop and launch some incredibly exciting global innovations. We’re delighted to have them on the team.”

Bill’s Produce and Grocery Store double opening in December: Bill’s Produce & Grocery store, the company owned by Richard Caring, will open two sites on the same day in December. Bill's Horsham, in The Old Town Hall, Market Square, and Bill's in Angel Gate, Guildford will both open Monday 10 December to take total estate size to 15.

Henderson to open second site in Aberdeen: Businessman Alan Henderson is to open his second site in Aberdeen. He will invest £500,000 in a refurbishment of The Star and Garter, situated at the top of Crown Street. Henderson opened McGinty’s Meal An’ Ale on Union Street in February 2009. Henderson said: “We are delighted to open The Stag, our second pub in Aberdeen, as we look to regenerate an iconic venue in the city which will feature our own little twists.”

Cau to open in Cambridge and Kingston: Cau, the Argentinean restaurant concept, will open sites in Cambridge and Kingston-upon-Thames next year. Cau was formed by the same shareholders who own Gaucho and launched in Guildford, Surrey, in July 2011. It is a less expensive, more casual and accessible restaurant brand aimed at regional cities.

Antic to take over GJ’s in Colliers Wood: The fast expanding London multiple Antic, headed by Anthony Thomas, will take over GJ’s in Colliers Wood in London. The company will run it until the New Year before making changes that are expected to include a refurbishment. Fund manager Downing LLP, which launched a Pub EIS fund earlier this year, is funding a total of four investments by Antic. The pub operator already operates a total of 11 freeholds funded by Downing and has three more in development and a fourth site in south London where the company has exchanged on a pub.

Wetherspoon provides opening date and name for iconic £2m Whitby scheme: JD Wetherspoon ha revealed that it will re-name its proposed £2m site in Whitby to the New Angel when it re-opens – it was previously called The Angel. The scheme is one of Wetherspoon’s most ambitious with partial demolition and complex structural alterations to create 20 new bedrooms on the building’s third and fourth floors to create 34 in total. A date for the opening, 12 March 2013, has been given by the company. JD Wetherspoon spokesman Eddie Gershon told the Whitby Gazette: “We understand that some people in the town are keen for the pub to revert to its original name, The Angel. However, we believe the name chosen by Wetherspoon, namely The New Angel pays homage to the pub’s original name, whilst updating it at the same time.”

Mitchells & Butlers wins retail systems award: Mitchells & Butlers’ business change and technology team and the company’s service partner Fujitsu are celebrating after winning a Retail Systems Award 2012. The awards showcase excellence and innovation in the field of information technology within the UK retail sector and offer organisations the prestige of being named leader in their field. Mitchells & Butlers and Fujitsu were named winners of the Best Use of Technology category in the Hospitality and Leisure Sector, recognising the company’s core infrastructure project which upgraded its data centre and network over the last 12 months.The judges recognised how Mitchells & Butlers improved their business support through innovative IT solutions. The successful introduction of cloud-based technology supported by a super fast broadband service in its 1,600 restaurants and pubs has enabled Mitchells & Butlers to improve the guest experience, empower employees whilst improving the efficiency of its business.

Market Town Taverns managing director to step down at end of 2012 after Heron and Brearley integration: Ian Fozard will step down as managing director of 15-strong Market Town Taverns, the company acquired by Isle of Man-based Heron and Brearley in 2011, at the end of this year. Fozard, who has overseen the integration of Market Town Taverns into Heron and Brearley, told Propel Morning Briefing: “I'm relinquishing my position at the end of December but staying on as a non-executive director. I'm looking forward to getting more involved with the family brewery, Roosters, next year, but also relishing being able to stay in touch with the pub industry.” Fozard will be replaced by Simon Midgley who is currently Market Town Taverns’ operations director. Founded in 1999, Market Town Taverns operates 15 managed pubs located across north and west Yorkshire. The business focuses on real ale, with all of its pubs listed in the 2012 CAMRA Good Beer Guide and holding Cask Marque accreditation. Heron and Brearley’s retail director Steven Taylor said at the time of the acquisition in October last year: “Acquiring Market Town Taverns is very much a coup for Heron and Brearley. An acquisition package of this calibre is extremely rare, given the level of consolidation industry-wide in the current economic climate. Market Town Taverns is a well-run operation and the company’s business model, with its strong focus on delivering excellent customer service, complements that of Heron and Brearley. We see the acquisition of the Market Town Taverns estate as a valuable addition to our portfolio in terms of size and scale, one that presents us with opportunities to strengthen our presence in the UK by gaining a foothold in Yorkshire and, in the longer term, expand across the north of England, drawing on our combined expertise in management, logistics and control. The acquisition not only presents opportunities to introduce new offerings to Isle of Man consumers, but also to enhance staff career development both locally and in Yorkshire, and to promote the Isle of Man to a new and wider audience.” In its most recent report results to the end September 2011 Market Towns Taverns produced pre-tax profit of £523,561 compared to £428,220 the year before. Turnover rose to £6,592,578 from £5,120,331 the year before. The company, which was founded in 1999, added three sites during the year. A report to Companies House stated: “Sales performance again showed a strong improvement of 28 per cent over the previous year as a result of like-for-like sales increases as well as expansion of the estate.”

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