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Fri 16th Nov 2012 - Caffe Nero, Pret a Manger and Restaurant Group

Story of the day:

Horizons – the Olympics cost £55m in lost takings: Foodservice insights firm Horizons has calculated the Olympics cost a net £55m in lost takings for the eating out sector. Full service restaurants lost around £26m in takings, quick-service restaurants lost £27m, pubs were down by £11m and hotels lost £14m to produce an overall loss of £78m. However, those pub and restaurants trading close to events saw an extra £23m in takings. An Horizons report stated: “It is important to keep all this in perspective because, while the impact may have been significant for some companies, the overall impact was equivalent to less than 0.1 per cent of total UK eating out expenditure this year. Overall, London itself was an enormous winner demonstrating its friendliness and ability to put on a really great show. The range and quality of British restaurant and pub food was a strong feature – and one, no doubt, that will attract more visitors in the years to come. The foodservice trade also showed how well and quickly it could rise to the challenge of change – with night time deliveries, additional security checks and an array of foreign languages just a few of the additional challenges. Notable losers include restaurants in the West End, wholesalers that were geared up to serve these restaurants, food kiosks in Oxford Street, food-led pubs around the country, and their various suppliers hotels which sat back and waited for the Olympics bonanza, British Airways whose premium passenger numbers fell and London museums.” However, September’s International Passenger Survey figures issued yesterday by the Office of National Statistics reveal that visitor numbers were up by one per cent (2.63m) in the month and that visitor spending reached a record £1.9bn (an increase of 17 per cent). Overseas visitor spend in the UK is now five per cent higher than in the first nine months of 2011. It is also estimated that 680,000 visits from overseas to the UK in July, August and September were primarily due to the London 2012 Games. For July to September the average spend by people attending or involved in the Games was £1,350, more than double all other visitors and another record for average spend. Sandie Dawe, VisitBritain’s chief executive, said: “These figures offer us an ideal platform to create a golden tourism legacy going into 2013 and beyond. It’s quite clear that Olympic visitors generally spent a lot more, often visiting for longer, as well as buying tickets for various events and staying in hotels.”

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:

Luke Johnson – the sector pays too much tax: Private equity investor Luke Johnson has voiced the support those in the sector claiming an excessive tax burden it being levied by the goverment. He told Caterer and Hotelkeeper magazine: “The sector as a whole is a vast contributor to the Exchequer and continues to create jobs in an economy that creates hardly any. I really applaud the efforts of (JD Wetherspoon founder) Tim Martin and others for pushing the idea that we pay too much tax generally. I think the industry has been transformed in terms of what we offer, the choice, and the variety from ten or 20 years ago. But I also think that we suffer a huge burden of taxation which is disproportionate.” Martin’s company has joined around 50 others in support the campaign by Jacques Borel’s VAT Club to reduce VAT to from 20 per cent to five per cent in the sector. Johnson added: “If you talk to Jacques Borel he says it is not a short-term thing, it is going to take years and I think he is probably right. You just have to keep nagging away, and not give up.”

Technomic names its US full-service brands to watch: Foodservice and insights research firm Technomic has named its key emerging US brands to watch. At a briefing held in London last Friday, Technomic named six brands with unusual points-of-difference in the full-service growth category that is watching closely. They are: Cooper’s Hawk, a nine-unit brand that “excels at hand-crafted wine” offering a winery, restaurant bar and tasting room on the same site, pairing “comfort with sophistication” (sales are $50m or just over $5m a site); Genghis Grill, a 82-unit casual dining Asian stir fry brand, “excels at customisation and value” with clients able to build their own rice and pasta bowls with over 70 ingredients to choose from (sales are $100m from 82 units); Mellow Mushroom “excels at uniqueness” with fresh-based pizza served in the psychedelic atmosphere of the 1960s (sales are $93m from 135 units); Chuy’s, a casual-dining Mexican brand that has 29 units, excels at “quirkiness” with retro Elvis-themed atmosphere and a traditional 1950s-era diner format (29 units produce sales of $124m); Brio Tuscan Grille, which has 46 units, “excels at sophistication” with wood-burning grills and a contemporary Tuscan chophouse format (46 units generate sales of $207m); Marlin and Ray’s, a casual-dining seafood concept, “excels at atmosphere” with a relaxing beach-themed environment and a laid-back “seafood shack” (nine units produce sales of $8m).

Bakery cafés show biggest growth in the UK market: Insights and research firm Technomic has reported that bakery cafés ranked among the top 100 UK chains grew sales 14.2 per cent from 2010 to 2011—the highest percentage of any menu category. Technomic’s menu-tracking resource, MenuMonitor, has shown that sandwiches are the most plentiful main dish items at limited service restaurants in the UK, accounting for 403 of the 1,270 total items. Technomic’s Lauren Edwards stated: “Many leading coffee cafés and bakery cafés are expanding their sandwich offerings and innovating with new flavours and ingredient combinations.”

McDonald’s explains strategy going forward after sales dip: McDonald’s has told analysts that it will increase advertising focus on everyday value going forward. “When it comes to price-value, our underlying strategy continues to revolve around a high-low approach that provides exceptional value across the menu, beginning with an affordable entry price point,” chief executive Don Thompson said. “Our tiered-menu system is about more than low prices. It’s about good value at the entry, at the midpoint and the premium price points. Our markets don’t have to invent everything from scratch. They pull from a pipeline of more than 160 proven products that have been developed in our local markets and have global potential, particularly in beef, chicken, breakfast and beverages.”

Company news:

Caffe Nero reports profits and turnover up; sets target of “at least” 700 stores: Caffe Nero, the 480-strong coffee shop operator, has reported sales rose by 11.5 per cent to £184.6m in the year to 31 March, with like-for-like sales growing 2.7 per cent. The company opened 51 stores in the year and closed six to create a net increase of 45 sites. Profit before tax increased by 10.4 per cent to £19.1m. Store margin decreased to 24.1 per cent from 25.1 per cent the year before while Ebitda grew by 4.7 per cent to £31.5m. The company said: “At the year end, we had 480 stores operating in 232 UK towns and cities. The directors believe that there is potential in the UK market for at least 700 Caffe Nero stores.” It added that it expected to open circa 50 stores in this financial year.

M&B gears up to open first Miller & Carter high street site in the New Year: Miller & Carter, the steakhouse brand operated by Mitchells & Butlers (M&B), has begun hiring as it prepares to open its first site in a city centre on 18 January. The brand, which operates at 27 sites, is set to open in a unit at The Headrow, Leeds in early December. It is the second site in the Leeds area but the first time it has been trialed in a city centre site. M&B states: “Miller & Carter Leeds is special because it is on the city’s main east-to-west central avenue, the Headrow. Also on the Headrow are the grand Victorian town hall, city library, art gallery and Henry Moore Institute: this is the historic heart of the city. We are also located right next to shopping and entertainment complex the Light and our outdoor terrace overlooks its impressive central courtyard.”

Former Que Pasa in Banbury to re-open as a nightclub: A former Que Pasa site in Banbury, near White Lion Walk, is set to re-open as a nightclub called Kudos. It is the joint project of Marc Sylvester, Stephen Lawson, Wayne Farrell and Thomas Tudhope and the group began work in August after signing the lease for the building in June. Sylvester is the owner of the AKA venue in Banbury and landlord of the Reindeer Inn, both in Parsons Street. He said: “We all looked at the site a year ago and started presenting ideas to each other about what we wanted to do. We all have enough experience in the bar industry and, as we know the town well, we think we know what people are looking for in a night out.”

Pret A Manger lines up fiftieth US site: Pret A Manger is set to open two new sites in Boston, Massachusetts to hit the 50 mark in the US. It’s opening a site in the city’s Financial District and one in Boylston Street to hit the half century mark. The Massachusetts openings are Pret’s fourth US market after opening sites in New York, Chicago and Washington DC.

Hydes Brewery reveals first half results: Hydes Brewery has reported its 16 managed pubs grew sales by 3.7 per cent in the six months to the end of September, with like-for-like revenues up by 3.7 per cent at £6.2m. Managing director Chris Hopkins said the use of Twitter and Facebook to publicise special events and promotional offers had helped increase footfall, along with more emphasis on guest beers, live entertainment and soccer match screenings. Overall revenues for the period were £8.7m and Hydes operating profits were up from £715,000 to £845,000. The business sold its free trade operations to Daniel Thwaites earlier in the year and the ended a seven-year contract to brew Boddingtons for AB InBev. In addition to its 16 managed pubs, Hydes has 44 tenanted pubs. Hydes, is based at the Queen’s Brewery in Moss Side, Manchester, but will move early next month to a £2m brewery on Kansas Avenue, Salford. The new smaller brewery will initially produce 6,500 barrels of cask ales per year.

Fuller’s reviewing its £2m creative and media agency links: London brewer and retailer Fuller’s has launched a review of its £2m creative and media agencies. The company has ended its 15-year relationship with creative agency Doner, which had been invited to repitch but declined. New agencies will work on advertising for both the Fuller’s brands and its pub estate. Ian Bray, the managing director of Fuller’s Beer Company, told Campaign magazine: “Doner have done a fantastic job for us over the last 15 years, helping us to turn the London Pride brand into the UK’s leading premium ale. We do, however, feel that the time is right to have a fresh pair of eyes on our brands and help take them on to even greater successes.”

Young’s refused planning consent to convert pub to housing: London retailer Young’s has been refused planning consent to convert the William IV pub in Little Common Lane, Bletchingley to a three-bedroom house. The council’s chief planning officer Piers Mason said: “The proposal would result in the loss of a community facility. It has not been demonstrated that the existing use is redundant, unviable or incapable of adapting to further fulfil its function of serving the community as a place of social interaction.” The pub, which was put up for sale two months ago for £340,000, has been taken off the market.

Restaurant Group to open seven Frankie & Benny’s before Christmas: The Restaurant Group will open seven new Frankie & Benny’s before Christmas. New sites will open in Coleraine, Bath, Aldersot, Ballymena, Oldham, Warrington and Harlow. The company has around 210 Frankie and Benny’s the moment.

Molson Coors launches Corona to increase footfall at M&B and Wetherspoon sites: Molson Coors has launched a Corona app that allows customers to play their friends at beach volleyball and also find the closest pub. The app opens up into a 3D beach volleyball game by pointing an AR-enabled phone at a bottle of Corona. Molson Coors claims it is the world’s first natural feature-tracking AR game linked to a physical product. Working with pub groups Mitchells & Butlers and JD Wetherspoon to help increase their footfall, Corona drinkers will receive a text when they are close to a participating shop or licensed venue to inform them of the brand’s availability and invite them to download the new app. Simon Pick, senior brand manager for Corona, said: “Corona is a brand that has huge appeal amongst young and ambitious people who like to stand out from the crowd.”

Paragon Pub Company to invest £800,000 after buying third site: Paragon Pub Company is to invest £800,000 in a refurbishment of The Orange Tree pub in Trent Vale, Stoke – its third site. Director Richard Colclough said: “It is a listed building so we need to complement that in all our designs. What we are hoping to do is put a glass extension on to the right-hand side of the pub and extend the kitchen so we can provide a high standard of catering. It will still be somewhere you can go for a drink but there is a large restaurant element to the project.” The other sites in the group’s portfolio are The Swan with Two Necks, in Blackbrook, which it took over in 2007, and The Wayfarer, at Fillybrooks, near Stone, which was bought in 2011. Colclough added: “The other two pubs have a country feel with a modern twist. But this is going to be much sharper.” Before it became The Orange Tree the building was known as The Springfield Hotel.

Domino’s UK launches gluton-free pizza: Domino’s is to launch a new gluten-free pizza next Monday [November 19, 2012]. The company is the UK’s first major pizza delivery chain to provide a pizza, which is suitable for coeliacs and those who are gluten-intolerant. Domino’s gluten-free pizza will be charged at the same price as its other pizzas. Following numerous requests from the general public, Domino’s has spent the past four years searching the UK and overseas for a suitable supplier for the gluten-free base. The new pizza base will also be suitable for those who are allergic to dairy or lactose intolerant, and as all Domino’s pizzas are made to order from scratch, it can be ordered without cheese to provide a dairy-free pizza. Simon Wallis, sales and marketing director for Domino’s, said: “We’ve worked long and hard with Coeliac UK and our new product development team to develop a product which is not only gluten-free but really tastes great too. We hope the product will bring the enjoyment of pizza to a new set of customers.”

Former Dukedom nightclub acquired: The 790-capacity Light Bar nightclub in Scunthorpe, part of the Dukedom estate that went into administration last year, has been bought by local operator Mark Deans, who already owns the Class6 bar in the town, off an asking price of £275,000. The Light Bar was opened in November 2005 after local publican Scott Slingsby converted the former Scunthorpe Congregational Church.

Yummy Pub Company unveils opening date for fourth pub (with cinema): Yummy Pub Company, the three-strong multiple headed by Tim Foster and Anthony Pender, will open its fourth pub, with a cinema in the basement, The Gorringe Park in Tooting, on 30 November. It’s a former Young’s pub acquired by Charles Wells that’s seen a £500,000 refurbishment. The cinema will be based on an independent cinema Foster discovered during his travels on New Zealand’s South Island. The New Zealand cinema had created a huge following among a community of like-minded people interested in mainstream and alternative cinema. Décor was shabby chic with mix and match seating sourced from airlines and railways carriages. Films were stopped once each screening at a random point to serve fresh-baked cookies. The Gorringe Park cinema will house between 50 and 75 seats,

Large capacity nightclub in Darlington closes six months after opening: A 1,000 capacity nightclub in Darlington has closed six months after it opened. The Hub, formerly known as Escapade, was given a complete refurbishment by new owners Ashley Wem and Barry Faulkner, who have run the Middleborough Empire for 20 years, to create a multi-room venue offering live music, comedy nights and club nights. Wem said at the tine of opening: “We’re bringing a massive entertainment centre to Darlington – there’s been nothing like this here before.”

Website launched to showcase design trends: Industry design and build expert Concorde BGW has launched a website aimed at leisure operators. The website ( showcases design trends evident on projects within the pub, bar, restaurant, hotel and specialist leisure sectors. “We have built our reputation on case studies,” explained director Simon Godson. “It made sense to showcase our projects clearly on a website to give new clients more of an understanding of what we do.” The services offered by Concorde are clearly detailed on the site under headings of ‘design & build’, ‘design’, ‘build & development’ and ‘interiors’; while at least five venue case studies are also displayed under each of the leisure industry sectors of: pubs, bars, restaurants, hotels and speciality. 

Chef & Brewer site beats 800 other Spirit pubs to win company crown for the second year: Spirit Pub Company has given the Old Mill pub in Coventry the title of Hotel of the Year for the second year running at its annual Best Awards. The Chef & Brewer pub on Mill Hill was the top winner overall taking a total of three awards; Hotel of the Year, Chef & Brewer Pub of the Year and Outstanding Achievement Award for general manager Linda Johnson.

WaverleyTBS had two potential bidders who both backed way over TUPE liability: Wholesaler WaverleyTBS had two potential bidders after administrator Deloitte was called in - one offer for the whole of the business and one for substantially all of it were received, a report filed at Companies House today states. However, both parties withdrew from the bidding process after citing potential TUPE liability. Deloitte reports that WaverleyTBS lost £2.5m in the eight months to the end of August this year, including a restructuring exceptional cost of £1,275,000. Turnover was £195.4m, which is approximately in line with the full year turnover of £309.4m the year before. Administrator Grant Thornton said: “The company had for some time been under financial pressure as a result of reducing discretionary spending in the UK leisure market which has caused a decline in both sales volumes and profit margins. Commencing in 2010, it undertook a restructuring of its business to reduce costs including the closure of a number of sites. However it incurred losses of £2.5m (after exceptional items) in the eight moths to August 2012. Further losses were incurred in September 2012 and these losses were expected to continue in the short term. At the same time, a number of key suppliers reduced credit terms leading to working capital problems. The company was in negotiations with a number of key stakeholders and suppliers in an attempt to refinance the business. McQueen was instructed by the company’s shareholders to market the business for sale and was in discussion with a number of interested parties. However, the company could not reschedule existing liabilities and raise the required additional funds to continue to trade to enable the sales process to be completed. Given the instability around the business it was deemed further delays would pose additional risk to creditor realisations and therefore appointed administrators.” A total of 19 parties were issued with Information Memorandum by the administrator before the two bidders emerged. The administrator saw £4.5m of turnover during the period of six days it was traded and is thought to have broken even for this period. As of 5 November, 49 employees were left at WaverleyTBS helping to wind it down. The administrator has received 143 claims for return of stock. On 7 November, Tennant Caledonian bought the company’s Intellectual Property Rights for £1,050,000. Deloitte has so far recovered £7m out of the £26.5m the company is owed – with £15m the sum thought recoverable. Waverley held stock worth £13m and £3m was sold during the administrator’s trading period – the rest will be returned to suppliers. The company bank accounts held funds of £104,000 on the date of the administrator’s appointment. Unsecured creditors are owed £64.5m with trade creditors owed a combined £40.5m with an outstanding VAT bill of £4.7m and duty bill of £6.1m. Deloitte said it is possible that some sort of dividend will be payable because enough money will be raised to pay secured and preferential creditors although it was not possible to say how much this would be.

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