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Morning Briefing Strap Line
Thu 29th Nov 2012 - Faucett Inn, Marco Marco and Mitchells of Lancaster

Story of the day:

Former chief executive of Sector Skills Council to open flagship pub: Industry veteran David McHattie and his wife Emma plus business partner Gary Hodgkinsson have formed a new company called Inn Idea to re-launch Punch Taverns’ Devonshire Arms, just around the corner from Chatsworth House in Derbyshire. The venue, expected to re-open on 6 December after a £375,000 joint refurbishment with Punch, will be a new concept called Inn & Kitchen that will incorporate a tea, coffee and cake offer called Hatties. McHattie, who has worked in senior positions at Mitchells & Butlers, Fullers and Restaurant Group, said: “Pubs are a vital part of the landscape but need to ensure they are relevant to 21st Century life. The Devonshire Arms is a great building that has created many memories over the years, but it's been subject to unsympathetic modifications in recent years and lost its way. We believe the new-look Devonshire Arms will be a business that Baslow will be proud of - a stylish, comfortable inn and kitchen that is the number one choice for all types of social occasions and we are very excited about ‘Hattie’s Tea, Coffee and Cakes’. Emma, the team’s visual merchandising guru, has had hours of fun purchasing china, sampling loose leaf tea, coffee and cakes and dreaming up ways to excite guests.” The kitchen team is led by award-winning chef Tom Samworth, who previously worked for Gary Rhodes. Hodgkinsson is also an industry veteran who has worked for M&B and Fullers. McHattie also launched Customer Service Benchmark, which benchmarks guest experiences for companies like Living Ventures, Las Iguanas, Camino, Ego, Crussh and Travelodge. Punch regional operations director Richard Woodward said: “This is another example of a transformational development by Punch and demonstrates how our innovative Buying Club Lease is attracting new top quality business partners.”

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:

European Commission – minimum pricing incompatible with EU regulations: The European Commission, with a fine sense of timing, yesterday argued that minimum pricing is incompatible with European Union (EU) regulations and should not be introduced. Responding to plans in Scotland to introduce a 50p minimum rice, The European Commission (EC) said minimum pricing could restrict imports of foreign alcohol and put international producers at a competitive disadvantage in Scotland. It called minimum pricing a “disproportionate” response to concern in Scotland over health issues. The Commission would prefer a wholesale increase in all alcohol prices through raising taxes, or unspecified targeted measures in the specific Scottish regions where alcohol abuse is a problem rather than penalising the entire population. The EC directive published yesterday “invites” the authorities to “abstain from adopting the draft legislation at issue”, specifically the draft Alcohol (Minimum Price per Unit) (Scotland) Order 2013.

European Commission sends legal warning to Cameron: The European Commission has also sent a nine-page legal opinion to the government warning that a minimum price in England and Wales is illegal, The Daily Telegraph reports. The UE advises that the Treasury should increase duty on alcoholic drinks if it wants to raise the price. The legal opinion, leaked to The Telegraph, argues that setting a minimum price is illegal under laws governing the free movement of goods.

Average couple to face a £94-a-year increase in drinks bill: The setting of a minimum price will lead to the average couple facing an increase of £94 a year in their drinks bill. The figure is the result of research by the Institute of Fiscal Studies, which found that minimum pricing will affect those who drink less than seven units a week because 48 per cent of the units they buy fall below the 45p threshold proposed in England and Wales.

Mitchells & Butlers boss – minimum pricing is a Trojan horse: Mitchells & Butlers chief executive Alistair Darby has voiced opposition to minimum pricing, describing it as a “Trojan horse”. Darby told The Daily Mirror: “The risk is that it becomes a Trojan horse for further ways to tax alcohol.” Minimum pricing would also boost supermarkets’ profit, he added.

Brewdog founder voices support for minimum pricing: Brewdog co-founder James Watt has voiced support for minimum pricing. He said: “The new minimum price of 50p per unit for Scotland and an anticipated 45p a unit for the rest of the UK will not affect any craft brewers pricing (Punk IPA currently retails in the off trade for around 90p per unit equivalent). The proposals will mean that the multi-national corporate hammerheads are raised no longer allowed to discount their liquid cardboard to embarrassingly pathetic levels. Craft brewers can’t, and shouldn’t, discount their beers and sustain losses. With less of a price differential now in the off trade between industrial and craft beer it will be far easier for the consumer to trade up to awesome craft brews.”

ALMR – new alcohol plans looks like a blank cheque for operators: The Association of Licensed Multiple Retailers (ALMR) has questioned whether government’s proposals will prove to be a blank cheque for operators. Kate Nicholls, strategic affairs director of the ALMR, said: “We are pleased that government’s both sides of the border have now finally woken up to the fact that it is the plethora of pocket money priced alcohol promotions which are the real problem. With 70 per cent of alcohol now bought and consumed at home, and widespread loss leading, punitive measures against pubs and bars are not delivering either government’s public policy objectives on health or crime and disorder. The ALMR has been campaigning over the past five years for a package of measures to re-regulate off sales – and subject all alcohol sales to the same rigorous conditions which currently apply only to bars and pubs. We are disappointed that the consultation does not go further in this area and get a grip on bulk sales, price led advertising and in-store promotions. There is nothing here which will stop supermarkets continuing to sell wholesale quantities of alcohol to the public at prices some pubs cannot buy it. The consultation itself acknowledges that there will be net benefit to the off-trade. Worse, the prospect of additional costs and controls on pubs and bars is clearly flagged. We have an open-ended question asking what more can be done - which can only result in pubs, clubs and bars signing a further a blank cheque in operating costs. What we need is not only measures to make it more expensive to drink at home, but also action to remove the horrendous regulatory and tax burdens which are crippling the pub and literally pricing many out of the market. Encouraging people to drink in pubs means that they consume measured quantities served by supervised by trained staff and promotes responsible consumption.”

Luke Johnson – the merits of “borrowing” an idea: Private equity investor Luke Johnson has argued the case for “borrowing ideas” in The Financial Times. He wrote: “Unless you specifically infringe a patent, design, trademark or copyright, or are very blatantly passing off your goods as if they were a rival’s, you can profitably rip off an idea. As ever, it is execution that matters, not the idea. At PizzaExpress, a competitor called Pizzaland opened a branch with a similar appearance and menu to ours. We sued and lost the legal action – but won the war. Pizzaland was a poor experience, and in due course the brand disappeared – while PizzaExpress has doubled in size since. It can be much quicker, cheaper and lower-risk to mimic than to start something from scratch. Unfortunately, many founders suffer from an acute case of “not invented here” syndrome, and fall in love with their particular concept. You need an ego to be an entrepreneur, but also be humble enough to know when a legal version of someone else’s model is better than anything you can devise.”

McDonald’s to boost $1 offer to re-energise sales; franchisees oppose cheaper menu items: McDonald’s is to add to its $1 menu items offer to boost flagging sales – sales dipped in October for the first time since 2003, according to Nation’s Restaurant News. Two “value plan energisers” to be put in place for late 2012 and early next year are Snack Size Fish McBites and the Grilled Onion Cheddar Burger. Franchisees have opposed a plan to introduce a 69 cent hamburger and an 89 cent cheeseburger.

Four Camra pub finalists are named: Four pubs from different parts of the UK have been shortlisted in a prestigious Camra pub of the year competition. The Campaign for Real Ale (Camra) said the finalists included last year’s winner and a pub sited next to the first-ever Co-op shop. The four are the Bridge End Inn, Ruabon, north Wales, which won last year; the Conquerer Alehouse in Ramsgate, Kent, one of a growing number of outlets dubbed “micro pubs”, which are essentially small conversions of existing buildings; the Baum in Rochdale, sited next to the original Co-op store which serves today as the Pioneers Museum charting the birth to the Co-operative movement; and the Tom Cobley Tavern in Spreyton, Devon. Camra pubs director Julian Hough said: “In challenging economic times, it’s a credit to each of these four pubs and their teams that they have reached the national final.”

Faucet Inn becomes the first pub company to commit to the living wage: Faucet Inn has become the first pub company in the UK to pledge its commitment to becoming a Living Wage employer. The Living Wage takes into account the area-specific cost of living, as well as the basic expenses involved in supporting a family. The Living Wage is now set at £8.55 an hour in London and £7.45 an hour in the rest of the UK, compared to the national minimum wage of £6.19 for those aged over 21. Steve Cox, managing director of Faucet Inn, said: “This is a very worthy initiative and Faucet Inn and I are proud to be involved. I am sure it will assist the company in recruiting and retaining only the best of employees which, in turn, will deliver only the highest of standards of service and product required by our customers. Our commitment to this is 100 per cent and we are currently in consultation with our employees.”

Company news:

Marston’s reports like-for-likes up two per cent; chairman David Thompson to step down: Midlands based Marston’s has reported managed like-for-like sales rose by 2.2 per cent in the year to 29 September and tenanted and franchise profit rose by 3.2 per cent. Group sales rose 5.5 per cent to £719.7m and pre-tax profit was up 9.2 per cent to £87.8m. In the eight weeks since its year-end, managed like-for-likes have risen by two per cent and tenanted and franchised profits have risen by three per cent. Food sales now represent 44 per cent of all managed sales. Chief executive Ralph Findlay said: “These results demonstrate resilience despite the weak economy and very poor weather during the summer. All areas of the business achieved increased revenue and profit in the year, demonstrating the continuing appeal of good pubs and beers. The economy is likely to remain weak for the foreseeable future, but we have a clear, proven strategy which is appropriate for current market conditions, and which is achieving growth.” Chairman David Thompson is to retire after 35 years’ service. The company said: “David’s contribution to the company and the industry has been immense, and his intellect and capacity for hard work have been invaluable. During David’s tenure, as managing director from 1986 to 2001, and as chairman since 2001, the company has expanded from its regional origins to become a national pub operator and brewer.” The company will now look to recruit a new chairman. Numis analyst Douglas Jack said Marston’s results were “ahead of expectations”.

Mitchells of Lancaster reduces debt by £2.2m and moves into profit: Pub operator Mitchells of Lancaster has reduced debt by £2.2m and announced a profit of £159,000 for the year to 26 February, compared to a loss of £49,000 the year before. The company has placed nine non-core assets on the market with a view to reducing debt by a further £1.5m – only two of these assets are trading properties. Turnover for the year was £9.3m, a decrease of 9.8 per cent on the previous year largely affected by disposals – on a like-for-like basis sales were down £336,000, a decrease of 3.6 per cent. The company said: “During the year we have recruited well capitalised experienced tenants, all of whom have had a positive impact on their pubs. The vast majority of our tenancies have the benefit of multiple income streams, which gives the entrepreneurial licensee the opportunity to generate revenue from drink, food and accommodation and this is undoubtedly an attraction for talented tenants. In our managed estate, the company is investing in customer service, pub upgrades, menu content and design and retail standards.” The company reported it has segmented its estate into four distinct trading styles to provide clearer messages to customers and a consistent service style. Net debt stood at £10.8m, down from £12.8m. 

Alistair Darby outlines target returns on Mitchells & Butlers investments: Alistair Darby, the new chief executive of Mitchells & Butlers, has indicated the target returns he hopes to achieve on new sites. He told City analysts the company would target mid to high teens on freehold and 25 per cent plus return on leasehold sites. “Where we are investing capital we need to be driving real value,” said Darby. If the company hit these levels it would be producing very good return for shareholders, he added.

Everards appoints Simon Godson as new tenanted trade operations director: Leicestershire brewer and retailer Everards has appointed Simon Godson as its new operation director for the tenanted trade. Godson joins Everards from Concorde BGW, the design and build business working in the leisure and hospitality sectors. Along with two colleagues, Godson was a director and co-owner of Concorde, a business that has experienced significant success in recent years. Prior to Concorde, he was head of customer retail for Hardy and Hansons between 2000 and 2007 with responsibility for 200 tenanted pubs, free trade and national accounts. Godson also worked for Mansfield Brewery in the 1990s primarily in sales roles.

Cheshire Cat Pubs & Bars takes on fourth site: Cheshire Cat Pubs and Bar, run by ex-Eldridge Pope executive Tim Bird and former La Tasca managing director Mary McLaughlin, has opened its fourth site – a Star Pubs and Bars venue, The Three Greyhounds Inn in Allostock at Holmes Chapel, Cheshire. The company has invested £250,000 on the site and taken a 25-year lease. Bird told Morning Briefing: “It’s another one of our collection of individual pubs - we’re not brand-led. We will probably look to expand the company to five sites and then put our foot on the ball and look around. So far, the company is just us – there are no backers. We’re in this because we love pubs and the biggest we want to be is ten pubs.” The Three Greyhounds Inn is a former Greenalls pub that had seen little investment in three decades. The new opening prepared locally sourced food and stock a range of craft spirits with a focus on brandies. Added Bird: “We like to puzzle people with choice. This has been a poor pub for 30 years – it just needed some vision and it’s a beauty now.” Cheshire’s other pubs are The Red Lion in Weymouth, Dorset; The Bull’s Head in Mobberley, Cheshire; and The Cholmondeley Arms near Malpas in Cheshire.

Faucett Inn saves Camden pub licence after changing trading profile: Faucet Inns has saved the licence on its Sir Richard Steele pub in Haverstock Hill, Belsize Park after moving its trading profile to a focus on food. The company admitted at a licensing hearing that the pub had a “20-year” reputation for being a venue where drug dealers operated. Faucett Inn manager director Steven Cox told the meeting he had been aware of the pub’s reputation – but not the scale. He said in the early days after buying it he had personally barred a man after finding him “smoking a joint” at the front of the pub. Cox told the hearing that the Sir Richard Steele had changed from a “completely vertical drinking venue”, ended live music and added a new kitchen to concentrate on food. Newish license Ian Collins added: “It is a community pub – one of the few places in London where barristers rub shoulders with guys who don’t have a job. I was not going to go in with two feet, that’s how you make an enemy of everyone, even the good people at the pub. I wanted to build relationships and then start weeding out anybody involved in drugs.” Liberal Democrat councillor Keith Moffitt, chairman of the licensing panel, said curbing the hours of the beer garden was the “final piece of the jigsaw” in changing the nature of the pub.

JD Wetherspoon lines up shop conversion in Ormskirk: Managed operator Wetherspoon has submitted plans to convert a DIY store in Ormskirk’s Wheatsheaf Walk to a new site. It is planned that the former DIY store will be turned into a two-storey pub, with modifications to the first floor to create a beer garden for customers. Ormskirk has a population of 23,392.

Yummy Pub Company to open fourth pub this Friday: 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, tomorrow (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.

Douglas Jack – managed pubs will drive Greene King first half results: Numis Securities leisure analyst Douglas Jack has forecast that Greene King will reports first half pre-tax profits, due to be reported next Tuesday, will be up by seven per cent to £82.6m driven by strong trading in the managed pub estate. He said: “We expect to hold our full year forecasts even though managed pub trading should be ahead of expectations. Forecasts anticipate seven new builds/single sites opening in the first half, with a further 18 sites due in the second half.”

Local authority rejects plan to convert Antic pub to a supermarket: Lewisham Council planning officers have turned down a plan to turn the Catford Bridge Tavern, which was successfully operated by Antic, into a supermarket and flats. The plan was submitted by its private landlord – Punch Taverns held the head lease and Antic operated a Tenancy at Will. Antic had turned the fortunes of the pub around. Thousands of customers had all campaigned against the change, with more than 2,000 signing an online petition to keep it open and 440 people sending objections to Catford Town Hall. Officers cited the loss of a “vital and valued community facility” for this week’s decision to reject the plans.

Sector training leader CPL Training launches digital and creative training academy: Wirral’s CPL Training has launched a digital and creative training academy that is training dozens of young people. Birkenhead-based CPL set up an “e-learning” arm in 2010 to create training software packaged for its clients. The team includes programmers, designers and animators who use 3-D animation to make training programmes more engaging. David Dasher, head of CPL E-learning, decided to set up an academy to offer training and work experience opportunities for young people looking to get into the creative and digital sectors. Dasher said the scheme has been a great success – and wants more young people to sign up. He said: “Merseyside is a real source of talent in the creative digital sector, yet opportunities for many youngsters can be few and far between. As a company, we are growing quickly and are constantly in need of added resources. From our infancy, we took the approach of focusing on young talent who, while bringing something fresh to the table, we would also be able to develop professionally to work in the CPL E-learning way. Our team is a really young one and the older team members are keen to support our more junior members of staff. Our business model of working with young people was perhaps a risky one but has proven to be a huge success. Young people sit at the heart of CPL E-learning and we will continue to act as a centre of development and excellence within this sector, presenting exciting and stimulating opportunities.” CPL’s courses have covered subjects from Food Safety to Manual Handling. Its clients have included brewer JW Lees, Revolution Vodka Bars and Stonegate Pub Company.

Marco Marco to open fourth site in a converted pub: North West Italian restaurant operator is following in the footsteps of Pesto in the Pub, the Neil Gatt-headed concept, by opening in a former pub. The new site will open at the former Hollybush pub in Stockton Brook, Staffordshire this Friday (30 November) - its other three venues are all located in Cheshire. The company’s newest site has 114 diners covers in the restaurant and a 50-seat bar and pub area.

Bispham Greene Brewery reports small profit; Lake District badly affected in current climate: Bispham Green Brewery has reported a small pre-tax profit of £41,938 on turnover down by 3.7 per cent to £3,577,000 in the year to 28 February – it lost £151,492 the year before. The company said the current financial year is proving “very challenging” with increasing food costs, a squeezed consumer, dreadful summer weather and the impact of the Olympics on consumer spending. It added: “Our position at the top end of the market, with an ability to offer great value for money, is helping to maintain levels of business. Trade in the Lake District has been particularly affected but cost-cutting is minimising the impact. Much depends on Christmas trade and the potential impact of severe weather which has affected trade over the last three years. We are cautiously optimistic.” 

Three new brands open at Stansted: Stansted airport is to improve its foodservice offer with three new brands opening before Christmas. This week saw the launch of Joe’s Coffeehouse, a ‘grab and go’ coffee shop. Next month, rock-style cafe The Illustrious and Café Piccolo will open their doors in Stansted’s departure area. Zoe Farmer, head of in-terminal commercial operations, said: “Research shows that provision of good quality shopping and catering plays a pivotal role in the overall airport experience for many passengers.”

Mood Trends:

Technomic identifies five key trends for UK foodservice in 2013: Insights and research firm Technomic has identified five key trends for UK foodservice in 2013. They are: Customisation encourages experimentation: For customers, the lure of customisation is control. Restaurant-goers increasingly want more command over nearly everything on the menu, from ingredients and portion size to flavour combinations and healthfulness. They also want value and convenience, both of which are satisfied through a flexible menu. Operators who incorporate a service model of customisation into their concepts will propel themselves ahead of their competitors by creating unique, customer-created food and drink. Think made-to-order meals à la Chipotle Mexican Grill or Coca-Cola with its Freestyle beverage machines. Expect to see operators branching out with more creative approaches to build-your-own dishes, offering mix-and-match combo meals, and even making customisation a cornerstone of their concept; Ingredients from two extremes: The UK’s current crop of leading independent chefs is striving to understand and cater to consumers’ disparate desires for both super local foods and authentic global foods on the same menu. Concepts that can satisfy both cravings in innovative ways will be the most successful. For example, expect to see local British ingredients highlighted in street foods such as Middle Eastern falafel and Mexican tacos. Not only will such items excite diners’ palates, but they are also an opportunity for chefs to pioneer new flavour combinations and dishes without spending a bundle; Stealth health: Although healthy eating is an established trend, the stealth-health movement—in which chefs replace salt, fat and sugar with healthy, bold flavours without promoting it to consumers—is gaining ground. Because consumers now expect healthy options in all restaurant types and segments, chefs need to comply by offering such without sacrificing flavour. Creating healthy yet satisfying meals is chefs’ new battle. Next year will bring a surge in stealth-health ingredients, including superfoods like beans, dark-green vegetables, salmon, soya, walnuts, yoghurt, tea and blueberries, as well as standard dishes with a healthier spin; Snacking matures: Restaurant operators are expanding their snacking menus to boost traffic between dayparts, particularly from younger consumers. Retailers that have long dominated the snack market are now competing with restaurants to hold share of consumers’ snack pounds. As the snacking daypart grows up, so will the types of snacks on offer. Between-meal bites are maturing into gourmet offerings with the addition of high-quality ingredients and innovative flavour combinations. More restaurants will be adding full snacking menus while others will look to discounting snacks during off-peak hours. Trends to watch include around-the-clock snacking, ethnic snacks and bite-sized offerings; Swift-service concepts cater to hurried diners: Convenience is top-of-mind for today’s consumer. Fast-paced diners want quick, portable and inexpensive meals that don’t sacrifice quality. Expect to see an upsurge in food trucks, quick-service and fast-casual restaurants increasing takeaway options and meal deals for on-the-go consumers. Also expect to see a rise in express-version spin-off concepts from established sit-down restaurants.

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