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Morning Briefing for pub, restaurant and food wervice operators

Wed 5th Dec 2012 - Caprice Holdings, Greene King and Joe Allen

Story of the day:

Luminar to appeal Kingston licence revocation: Nightclub company Luminar is to appeal against the decision to repeal the licence of its Oceania venue in Kingston in the wake of a fatal stabbing. The venue, which has been the company’s most profitable nightclub since it opened in 2003, would have been forced to cease trading on 11 December if no appeal had been forthcoming. Chief executive Peter Marks said: “Oceana has been a key part of the Kingston night-time economy for over 20 years and employs 200 people locally. It is a well-run, professional and secure venue that over 300,000 people enjoy every year. Having considered our position, we are going to appeal as we believe that the decision to revoke our licence was disproportionate and inappropriate. Our management team has worked hard to build productive relationships with the police and local authorities. We are always conscious of our neighbours and have taken various steps to minimise disruption and have not received a single complaint from residents during the last six years. The safety and security of our customers is and always has been our main priority. The club has one of the most sophisticated search and security procedures of any nightclub in the UK, including the use of ID scanners, metal detection arches and wands, over 100 CCTV cameras, a large team of fully trained and regulated door staff and an on-site paramedic. This far exceeds the security measures outlined under the terms of our licence and has been implemented with the full knowledge of local police. Over the last five years violent crime has decreased and, of those crimes, over 88 per cent were down to the theft and loss of mobile phones which distorts the overall figures. Our security system proved invaluable to the Police investigation, contributing to the arrest and charging of four people. We look forward to working closely with the local Kingston community, licensing and Police teams to maintain the safest possible environment for our customers to enjoy a great night out.”

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.

Five things worth knowing from yeaterday's Greene King results:

Greene King moves managed sites to Meet and Eat franchise format: Suffolk-based Greene King has moved a number of its managed sites to its franchised Meet and Eat format. The concept, which has British Franchise Association accreditation, was developed for its tenanted division but has now been adopted at a number of managed pubs. The landmark Skyrack managed pub in Headingly, Leeds, acquired as part of the Laurel neighbourhood estate and at one stage producing £1m a year in site Ebitda, has been converted to the Meet and Eat format, for example. The move is an indication that the franchise offer at Meet an Eat is strong enough to provide an operating option within the locals managed division. Chief executive Rooney Anand told Morning Briefing that the Meet and Eat format could well be expanded to 100 sites in the long-term. The distribution of expansion across managed and tenanted is likely to be oriented towards the tenanted side but it might be possible that it will prove to have “legs” on the managed side and be driven harder. 

Hungry Horse loyalty scheme has 22,000 members; cuts prices at Eating Inn: A loyalty scheme is being trialed by Greene King at 40 sites within its Hungry Horse brand, which now has 22,000 members. Weekly offers now account for 27 per cent of all food covers sold. At its 28-strong Eating Inn brand, Greene King has taken the strategic move of reducing average retail sale price by five per cent. In both Eating Inn and Belhaven sites, the number of fresh, homemade dishes has been increased. There has been a focus on key menu items – the 107-strong Old English Inns estate is currently selling 16,000 portions of its award-winning fish and chips dish per week. Within the 42-strong Loch Fyne Restaurant brand, Greene King increased the average portion size of its “fish your way” dish. The company also reported that its two new-build pubs are producing Ebitda of £460,000 per annum, a return on investment of 18 per cent.

Fourth site converted to Realpubs format: Greene King has converted a fourth pub to the Realpubs premium format – The St Margaret’s Tavern in Twickenham. The conversion follows the refurbishment of the King’s Stores in Whitechapel in August, the first Realpubs site in a Zone One location. The company stated: “All four of the transfers to date have performed well above expectations and we anticipate four further sites to be redeveloped in the remainder of the financial year.” 

Wine and coffee show strong growth: Greene King has reported that wine sales grew 22 per cent in the first half of its financial year, with 57 per cent growth over the last four years. Wine sales per site grew 16.4 per cent. The company has hired a wine specialist for its Metropolitan premium local pubs estate and it has developed its own directly sourced own-label brand, Piazza, which is “selling well in 50 sites”. Hot beverage sales, of which coffee is 75 per cent, grew by 8.3 per cent. The company said: “Three quarters of our offer is now through Illy, who we began partnering in 2010. On an annualised basis, we are now selling over 100 cups per site, per week.” 

Average tenanted recruitment time down by 77 days: The average time to recruit a new licensee for a Greene King tenanted pub has reduced from 196 days to 119 days. The company said: “Recruitment of quality licensees is the most important element of the Pub Partners business model. During the period, we reorganised our recruitment team into regions, increasing focus and accountability. Within certain regions, under the recruitment slogans “Great to be Greene” and “Better to be Belhaven”, we enhanced our local recruitment efforts including re-introducing open days, advertising on petrol pumps and taking out advertisements in local newspapers. As a result, we kept temporary agreements down to 28 against 71 at the same stage last year.” Average licensee tenure has risen by two months to four years and seven months.

Industry news:

BBPA – French beer tax hike still leaves UK beer three times higher: A decision by the French parliament to increase beer tax by a massive 160 per cent still leaves UK beer tax three times higher. Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “Lower strength drinks like beer shouldn’t be singled out for excessive tax hikes. However, it is still worth pointing out that even with this huge rise, UK beer tax is still more than three times higher than in France – around 39 pence per pint. And there must be more than a degree of schadenfreude in Germany about beer tax, as the UK rate is now an astonishing 13 times higher than theirs. Under the UK government’s escalator policy, beer tax is set to rise even higher, despite increasing by 42 per cent since March 2008. More than ever, we need a rethink on beer tax policy and a review of this unpopular and damaging tax.”

Dave & Buster’s unveils new format with focus on watching sport: Dave & Buster’s, the US brand that was trialed in the UK by Bass in the 1990s, has opened a new 45,000 square foot flagship location in Dallas that provides a new blueprint for other units in the 60-strong chain. The new site expands its sports bar area with more large-screen televisions and designated areas for watching sports. Steve King, Dave & Buster’s chief executive, said: “This is a culmination of all the things we’ve been working on and evolving with the brand over the last several years. Really the biggest thing you’ll notice here is a much bigger emphasis toward ‘watch.’ We’ve always been about ‘eat, drink and play,’ but now we’ve really added another element, the ‘watch,’ and it’s really focusing on watching sports.”

GMB stages Starbucks protest over wage rates: The GMB Union staged a demonstration outside Starbucks’ offices in London yesterday over complaints that it does not pay the so-called Living Wage, which is higher than the minimum wage. The union accused Starbucks of “avoiding” paying the Living Wage, which has been set at £8.55 an hour in London and £7.45 outside the capital, compared with the national minimum wage of £6.19 for adults.

Burger King looks to boost early December sales with 55 cent Whopper offer: Burger King in the US is looking to boost early December sales by using the hook of the 55th Anniversary of the launch of the Whopper to offer the menu item for 55 cents nationwide between 6 December and 9 December.

Secret Hotels loses £7m VAT case: MedHotels, now called Secret Hotels, has two weeks to decide whether to appeal to the Supreme Court, after the Court of Appeal found in favour of HMRC in a long-running tax dispute. The case against Secret Hotels, formerly MedHotels, means that the company is left with a VAT bill of £7m for the period between 2004 and 2007, when the bedbank was part of MedHotels is now owned by Thomas Cook, but the liability rests with its former owners and its parent company Sabre Holdings. The appeal, heard in July, was about whether the bed bank operated as an agent or principal, the latter making it liable for VAT under the Tour Operator Margins Scheme (TOMS).

Company news:

Caprice Holdings reports pre-tax profit of £5,675,633: Caprice Holdings, which is owned by Richard Caring and owns restaurants such as The Ivy and J Sheekey, has reported a pre-tax profit of £5,675,633 for the year to 1 January on turnover of £41,686,048. Turnover rose three per cent compared to year. Like-for-like restaurant Ebitda, excluding new openings, rose three per cent to £11.2m – pre-opening costs for its new site in Mayfair were £800,000. Caprice Holdings reported: “2011 has been a year of substantial investment within the company. Following 11 months of meticulous planning the business unveiled its new flagship offering at 34 Grosvenor Square in Mayfair in December 2011. This restaurant perfectly complements the company’s premier status in the restaurant sector. 2012 promises to build on the investment in 2011 with the planned opening of Balthazar at Covent Garden and the extension of J Sheekey’s Oyster Bar.” Gross profit margin was 77 per cent compared to 76 per cent the year before and adjusted Ebitda margin was constant at 21 per cent. The highest paid director earned £425,849.

Orchid reports “Big Weekend” boosted sales by four per cent: Managed operator Orchid, led by Rufus Gall, has reported that its “Big Weekend” last weekend, where pubs across the estate mounted special events boosted sales by four per cent. Hall said: “The events of the weekend really go to show just what great places our pubs are and how important they are to local communities – these great events were driven by our teams and our customers.” More than £42,000 raised for 64 different charities at events across the estate.

Carluccio’s chairman buys Covent Garden’s Joe Allen restaurant: Carluccio’s chairman Stephen Gee has partnered with west London restaurateurs Tim Healy and Lawrence Hartley to buy the iconic Hoe Allen restaurant in Covent Garden, a favourite of theatreland actors and directors, for £1m. The three partners have also taken over Orso, a dining room linked to Joe Allen by an underground passage. Joe Allen was sold by Richard Polo, who has run it for 35 years but decided it was time to sell up. Hartley said: “We will be retaining the principle of being the ultimate American dining experience in London.”

Punch licensee goes multi-site: Punch licensee Liz Lawson has taken her second site with the company – she will re-open the 14-bedroom Chieftain Hotel in Inverness this Friday (7 December) after a £350,000 joint investment with Punch. Lawson, who already runs The Blacksmiths pub with her partner Kenny McNellan in Culloden, said: “I’m excited about taking on my second site with Punch and I’m thrilled with the new look - the hotel has been totally transformed so much so that people can’t believe it’s the same place.”

Spanish chef with three star Michelin pedigree to open at The Halkin hotel: Elena Arzak, who has been described as the best woman chef in the world thanks to her Arzak restaurant in San Sebastian, she runs with her father, holding three Michelin stars, is to open a restaurant called Ametsa – which means “dream” – at The Halkin Hotel in Belgravia. Ametsa will replace Thai restaurant Nahm at The Halkin.

JD Wetherspoon buys site in Honiton, Devon: Managed operator JD Wetherspoon has bought the privately owned Star Inn, Honiton, Devon, which has a population of 11,822. Building work could start on the New Street premises as early as this month, with a view to opening in March or April next year. JD Wetherspoon spokesman Eddie Gershon said: “We are looking forward to opening our new pub in Honiton. It is well documented that Wetherspoon has been keen to open in the town for many months and we are delighted that this will now come to fruition.”

Mothercare to roll out café to a further 20 stores: Mothercare is to launch cafés in a further 20 stores. Its trial of the format at Edmonton, London, which launched in August, saw a sales increase of 30 per cent. Mothercare UK director Mike Logue said: “We expect to do another three or four before the end of the financial year (in March).” The retailer has already rolled out the format to its Nottingham and Dudley stores and Logue said he was “equally pleased” with the performance at those shops, which had experienced a 15 per cent sales uplift.

Oldest pub in Inverness re-opens after £100,000 refurbishment: An historic Inverness pub will reopen on Friday (7 December) after a major joint investment of £100,000 by licensee Rory Munro and owners Punch Taverns. Inside, the pub has been completely redecorated and new flooring, lighting, furniture and fittings added which remain in keeping with the traditional Scottish style of the Gellions. The pub serves a selection of pub food classics daily and to strengthen the dining options, the dining area has also been given a revamp.

Starbucks repeats successful US LivingSocial offer in the UK: Coffee firm Starbucks has repeated a hugely successful US LivingSocial offer in the UK. The Starbucks offer, which was run on 29 and 30 November, allowed customers to claim a £10 Starbucks Card eGift for £5, which must be used within a three-month period and used in UK stores until 31 May 2013. Starbucks offered 100,000 vouchers in total to UK customers during the two-day period. Ian Cranna, vice-president of marketing and category at Starbucks UK, said: “At Starbucks we are always looking for fresh and relevant ways to give our customers value at a time when they need and want it. We wanted to create a unique offer for our customers in the lead-up to Christmas as a big ‘thank you’ and we’re really pleased to have found a partner in Living Social to help us do this.” Starbucks sold a record 1.5 million vouchers when it ran the offer in the US.

Costa Coffee beats stiff opposition to open in Burnham: Costa Coffee has beaten off stiff opposition to win planning consent to open a site in Burnham. After the application was submitted on Monday, 8 October, the local authority received letters of objection from six sources, along with 16 duplicate letters and three petitions. Six letters were also received voicing support for the plans. Penny Fuchs, owner of independent café Mulberry Bites in High Street said: “We fought the best we could and now I’m going to have to up my game to keep my business going.”

Former Stoke City footballer opens second Domino’s site: Former Stoke City striker Paul Macari, son of former Stoke boss and Manchester United payer Lou Macari, has opened his second Domino’s Pizza franchise – the site is in Abbey Hulton, Staffordshire. Macari opened his first Domino’s in Leek Road, Hanley, seven years ago.

Arc Inspirations set to get York site go-ahead: Arc Inspirations, the highly profitable eight strong premium bar and restaurant operator led by Martin Woolstencroft, is set to get planning consent to turn a former chapel in the centre of York into a new site. The company wants to convert a listed 161-year-old building in York’s Little Stonegate to its first opening in several years. The company reported pre-tax profits of £2,557,465 on turnover of £11,655,708 in the year to 1 April 2012. Arc Inspirations had turnover of £12,536,538 and pre-tax profit of £2,760,300 the year before.

Hull multi-siter adds third venue: Hull multi-site operator Lee Kirman is to re-open the historic Minerva Pub in Nelson Street on Hull Marina later this month – the local authority-owned venue shut last month. Kirman also runs Oscars in the Old Town and The Kingston Hotel in Trinity House Lane in the city.

New super-sized buffet opens in Bolton: A new super-sized 1,800-cover buffet restaurant, The Excellency Buffet, which employs 12 chefs cooking dishes from Mexico, India, Pakistan, China and Iran has opened at Excellency Centre in Carlton Street, Bolton. The former bus shed has been transformed into a suite of large halls.

Multi-operator takes third Star Pubs and Bars site: Multi-operator Mitchells of Lancaster has opened its third Star Pubs and Bars site. The Church House opened in Sheffield this week following a £220,000 investment by Star Pubs & Bars, formerly Scottish & Newcastle Pub Company. The Church House is Mitchell’s Pub Management’s third such site with Star Pubs & Bars on a substantive agreement. Inside floors have been stripped, old brickwork exposed, original features such as the fireplace refurbished and new ones including huge chandeliers added to create a stylish yet traditional look. The venue offers artisan coffee and teas, a deli offer and a strong range of premium spirits, wines and beers (including six cask ales). Said Chris Moore, trading director at Star Pubs & Bars: “The Church House epitomises the focus of the Star Pubs & Bars estate – a superb pub in a great location with the opportunity to create a strong long term sustainable business for our lessee partners.” Nick Yates, business development manager with Mitchell’s Pub Management, said: “We have established a great working relationship with Star Pubs & Bars and this is a fantastic opportunity to operate what we believe will be the best pub in Sheffield.”

TGI Friday’s opens Jersey site: TGI Friday’s, headed by Karen Forrester, has opened a new site in Jersey. TGI Friday’s, which is located at a Waterfront site that has been empty for more than two years, has created 60 jobs. Twelve managers have been brought in from outside the Island to help run the site in its early months.

Wharfebank and Castle Rock open partnership pub this week: Wharfedale-based Wharfebank Brewery and Nottingham-based Castle Rock Brewery re-open The Rook and Gaskill Inn in York this week. WharfeBank, which runs two other pubs, plans to showcase its ales, along with those from Castle Rock, at the pub which is a previous York CAMRA Pub of the Year award winner. Managing director Martin Kellaway said: “We are delighted to reach agreement with Castle Rock Brewery and make The Rook and Gaskill our third pub in Yorkshire. Our long-held belief is that pubs are a terrific way of showcasing what we do best – produce great beer.” Managing director of Nottingham-based Castle Rock Brewery Colin Wilde said: “We love the idea that our beers will be sold alongside local brewers. We can tap into local knowledge through the WharfeBank team and are confident they will ensure the prosperous future of The Rook and Gaskill.”

Vinopolis launches bakery in Borough Market: London wine tasting specialist Vinopolis has opened a new restaurant, bar and bakery housed in the railway arches next to Borough Market. Del Mercato holds a restaurant, trattoria, bar and bakery showcasing regional Italian food and wine. The 3,000 square foot space, formerly occupied by a tool hire company, is located between Park Street and Brew Wharf.

Spirit moves to reward staff with Lifestyle vouchers: Red Letter Days For Business, the corporate division of experiences company Red Letter Days, has generated sales in excess of £1m for its Lifestyle voucher since its launch in September 2011. Lifestyle is claimed to be the only voucher in the market that offers the choice of leisure gifts including fashion and beauty treats, cinema and festival tickets, nights out at restaurants as well as travel and short breaks. A representative from the Spirit Pub Company, said: “Spirit’s recognition scheme is a way to reinforce our culture and values as well as helping to attract and retain top performers by recognising great performance and behaviour throughout the year. We have recently moved away from a number of different awards to solely use the Red Letter Days Lifestyle vouchers as it was viewed that this would allow individuals to choose a gift personal to them. The new Lifestyle vouchers give individuals the choice to ensure the recognition scheme is flexible and desired by employees.”

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