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Morning Briefing for pub, restaurant and food wervice operators

Thu 28th Feb 2013 - Aqua, Beds and Bars and Inception Group

Story of the day:

Siba report - local beer is bucking overall market declines: Local beer is offering a lifeline to Britain’s troubled brewing and pub industries, with volume up by an estimated 6.8% last year to over 1.4 million barrels, according to the Local Beer Report, published today by the Society of Independent Brewers (SIBA). Over the same period, on-trade beer sales overall declined by 4.7% (BBPA Beer Barometer). The report, based on a survey of 315 brewers belonging to SIBA – around 50% of its total membership – celebrates local beer as a British success story. Local brewers now employ nearly 5,000 people directly and the majority are investing to generate further growth and employment opportunities. At the same time, their brewing skill and innovation is providing the UK’s drinkers with 3,200 permanent ales encompassing a wide diversity of beer styles. While many larger brewers and pubs are cutting staff numbers, SIBA members expanded their workforce by 25% last year. Reflecting the labour-intensive nature of craft brewing, SIBA’s smaller brewers employ one person for every 500 hectolitres produced, compared to one per 3,000 HL in larger breweries. SIBA chief executive Julian Grocock said: “Local brewing is unusual, if not unique, as a British manufacturing industry that is increasing production and market share, welcoming new producers, generating significant employment, investing for a sustainable future and contributing economically and socially to the hundreds of localities where independent brewers are based.” Grocock added: “On average, SIBA brewers re-invested 23% of turnover in 2012, demonstrating real confidence in the prospects for their business. This young, buoyant local brewing industry, creating employment and contributing to local economies and communities across the country, is, as we term it in the report, the ‘investment dividend’ that the government continues to reap from Small Brewers Relief (introduced in 2002). Given the clear connection between investment and a thriving industry, we remain baffled by the government’s stance on beer duty, which amounts to a disinvestment in the same industry that they are supporting with Small Brewers Relief. This year, as in previous years, SIBA is urging the Chancellor to extend their investment in British beer, by abolishing the unpopular, outdated and ineffective beer duty escalator.”

Industry news:

The Sun backs beer duty escalator campaign: The Sun newspaper has backed the campaign to freeze the beer duty escalator. The newspaper stated: “A beer tax rise must be halted so Brits can still afford a pint, The Sun today demands. We want Chancellor George Osborne to freeze it in next month’s Budget. New figures reveal the hated beer duty escalator has been hiked by 42% since its launch in 2008. That now leaves the taxman taking a third of the cost paid for every pint sold. Pubs and breweries say the soaring levy is killing their trade, and has helped close 5,800 boozers. The freeze would cost Mr Osborne less than £100 million — a tiny sum compared to our successful demand last year to abolish fuel duty rises.”

Novus boss wins Retailers’ Retailer gong: Novus chief executive Steve Richards has scooped the Best Individual prize at this year’s Retailers’ Retailer awards, organised by M&C Report. Richards, who is also chairman of the Association of Licensed Multiple Retailers, beat The Restaurant’s Group’s chief executive Andrew Page, Tim Bacon, chief executive of Living Ventures, Fuller’s group managing director Simon Emeny, Prezzo chief executive Jonathan Kaye and Alex Reilley, chief executive of Loungers in a poll of his peers.

Westfield – our two London shopping centres saw sales of £1.9 billion in 2012: Shopping centre business Westfield has reported 70 million customers visits to its two London shopping centres last year. Co-chief executive Stephen Lowy said: “In the United Kingdom, the group’s two world-class centres in London attracted over 70 million customer visits during the year spending more than £1.9 billion.” He added that Stratford City had an “outstanding performance” during the 2012 London Olympics. The company is developing a third London site in Croydon and expanding Westfield London.

Pub cook book scoops international prize: The British Larder: A Cookbook for all Seasons, produced by the Madalee Bonvini-Hamel, who operates the British Larder, a Punch Taverns pub in Suffolk, has been voted as the best in the world at a global gastronomic ceremony in Paris over the weekend. The seasonal cookbook, written and photographed by Bonvini-Hamel, won the Gourmand Award for the World’s best cookbook by a female chef. She said: “The competition was particularly tough and I am honoured to have my book recognised amongst such celebrated and influential industry notaries. I would like to congratulate my colleagues who made it into the finals and in particular the chefs from Belgium and the UAE who were chosen as runners-up.”

Mayor Bloomberg – extend the large soft drinks ban state-wide: Mayor Michael Bloomberg has called on the state of New York to adopt the city’s ban on sugary soft drinks that are larger than 16oz. The city ban, due to take effect on 12 March, does not affect supermarkets, grocery stores and 7-Eleven shops because they are regulated by the state. Of the ban, Bloomberg said: “There’s no beneficiaries if we allow pizza places to deliver more empty calories to kids and to adults. But there are clearly benefits to society and everybody else if you go in the other direction.”

Institute of Licensing criticises minimum pricing: The Institute of Licensing, made up of licensing officer and lawyers, has criticised minimum pricing plan for “penalising” responsible drinkers. The Institute argued as part of a consultation on the plan: “Social attitudes have enormous influence on behaviour and society at present is overly tolerant of excessive drinking. These plans are not balanced in any way by proposals aimed at encouraging a cultural shift towards drinking lower-strength or less alcohol or changing social tolerance towards binge drinking as a whole. Problem drinkers will source alcohol no matter what the price.”

Operators pledge 100 work placements: At total of 100 work placements have been pledged at a career initiative launched through industry body The Perceptions Group. Within hours of the launch of the Perceptions Group pub and bars careers initiative, 100 work placements for young people had been pledged. Over 40 pub and bar operators gathered at a meeting this week to hear how the pub and bar careers initiative can help to transform the lives of young people and provide the sector with well-trained, enthusiastic and willing young people. At the meeting, Anthony Pender pledged his company Yummy Pubs would offer a further 30 work placements in addition to the five they have currently run. Oakman Inns & Restaurants had pledged a further 20 with an additional 50 pledged by Beds and Bars.

Begbies Traynor – corporate insolvencies are down: Insolvency specialist Begbies Traynor has reported that market conditions remain ‘challenging’ with a 5.8% decline in the number of corporate insolvencies in England and Wales in calendar year 2012 to 20,580 (2011: 21,858). Begbies Traynor executive chairman Ric Traynor said: “Overall the insolvency market remains challenging, despite the impression given by a number of high profile retail administrations since Christmas.”

Company news:

Andrew Page – The Restaurant Group has prospered by sticking to its areas of expertise: The Restaurant Group (TRG) chief executive Andrew Page has argued that the company has prospered by sticking to its areas of expertise. He said: “Over the past five years, our business has experienced some difficult trading conditions and during that period sales, profits and cash flow increased every year. Also within that period we have devised and developed our new brand, Coast to Coast, and executed its initial roll out very effectively, further widening TRG’s roll out path. TRG’s businesses command strong market positions in each of our chosen segments and our brands are well recognised for the quality, breadth and value of their offerings. We will continue to stick to: our areas of expertise; focus on our customers by providing excellent value, choice and service; maintain high standards of operational efficiency and execution; carefully control our costs and seek to mitigate and minimise the impact of inflationary input costs; add high quality new restaurants that meet our investment criteria to our portfolio; and focus on cash flow, returns and growing shareholder value. Our aim is to continue to strengthen our market positions, to judiciously roll out our brands and deliver long-term and sustainable profitable growth. The group has demonstrated its resilience and we expect to benefit significantly from the upturn in consumer confidence that will, in due course, prevail.”

Shares in The Restaurant Group bounce up after strong start to 2013: Shares in The Restaurant Group closed up 6% at 412.1p yesterday after it reported like-for-likes up 6.5% in the first eight weeks of 2013. The Financial Times said: “A growing top and bottom line, a strong start to 2013 and an increased dividend were enough to sate the appetites of The Restaurant Group’s investors. There was only one blip, which left some analysts scratching their heads. Despite the growth, margins declined – unusual, even with food price inflation, for a highly geared business. With a price/earnings ratio of 17.2, The Restaurant Group trades at a slight premium to rival Prezzo, which has a PE ratio of 15. But with little exposure to the troubled high street, ambitious growth plans and a healthy balance sheet, The Restaurant Group seems worth it.”

Aqua plans expansion out of the south west with opening in Milton Keynes: Italian restaurant chain Aqua, which operates two sites in Bristol and one in Bath, is to open a site in Milton Keynes. The concept for Aqua Italia is inspired by founder, Richard Smithson’s wife, Emelia, whose heritage is Italian – their son Ben now works in the business. Ben said: “Aqua is well-established locally. So we are now in a position where the business can operate outside of this immediate geographical area, with the systems in place to manage the new restaurant. We chose Milton Keynes as it is a strong and vibrant market. We are confident the Aqua offer of premium casual dining will be welcomed locally. These have been tough times for the industry but protecting our values has enabled us to buck this trend. We really invest in our new sites and want to create great surroundings that are consistent with the Aqua ethos.” Funding for the expansion has come from NatWest.

The Times - Greene King seeks buyer for 300 tenanted pubs: The Times has reported that Greene King has put 300 tenanted pubs on the market. The company is looking to expand its managed division to 1,100 pubs whilst reducing the size of its tenanted estate from 1,600 pubs to 1,200 pubs over three to five years. The move comes after Marston’s placed 400 tenanted and franchised pubs it wants to sell in a new operating division headed by Phil Barnett, whose job title is operations director – disposals.

Keith McNally – ‘I opened Balthazar in London because I was skint’: Restaurateur Keith McNally has reported that he opened Balthazar in Covent Garden because a house renovation left him short of cash. He told City AM: “I didn’t want to be part of a chain so I wouldn’t have opened a restaurant in a foreign city unless I was living there and it could be an extension to my life. I also went quite broke building and renovating my house in Notting Hill, so I needed the money.” 

Beds and Bars plans to add 200 beds to flagship London site: Beds and Bars, the pan-European hostel provider led by Keith Knowles, is planning to add 200 beds to its flagship site in Borough in a £2m investment – the plan is currently subject to planning permission. The company currently offers 304 beds across three sites – St Christopher’s Inn, The Village and Oasis - on Borough High Street. Spokesman Robert Savage said: “In tandem with this extension, the existing hostel and the Belushi’s bar attached to this, will be refurbished. The refurbishment of the basement bar has already begun and will be themed around Desperados Beer. The final result will be a premium offering for London customers. Beds and Bars is also actively searching for new properties in London, to add to the existing portfolio of backpacker accommodation and bars.”

Preston operators plan city’s first craft beer bar: A Preston operator is planning to convert historic city centre buildings into Preston’s first craft beer pub. The owner of the New Continental, Jeremy Rowland, has been given planning permission to transform part of the old Co-operative building on Ormskirk Road into a bar. The new pub, to be named The Co-op, is aiming to open around May or June. Rowlands said: “It will be Preston’s first craft beer pub with an interesting range of drinks. There will be a performance space and also food, a bit lighter with more snacks than at the Continental.”

Gough Hotels to buys Southwold Pier with plans for third hotel: Gough Hotels is to buy Southwold Pier - the company already operates the Angel Hotel in Bury St Edmunds and The Salthouse Harbour Hotel in Ipswich. The deal is set to add a third hotel to the Gough family’s business with planning permission in place for the redevelopment of the main building into a hotel at the shore end of the pier. Stephen Bournes, who together with his wife Antonia purchased the pier in 2005, said: “Gough Hotels are great operators and are passionate about Suffolk. They are keen to take on the hotel development and we see this as really good news for Southwold, and for Suffolk. We know Gough Hotels well and we believe we could not have found a better buyer.” The existing pier business includes gift shops, a restaurant, cafés and an arcade of “alternative” slot machines, attracting a combined footfall of more than 750,000 visitors a year – it is Southwold’s second largest employer with a staff of 45 rising to 100 in the summer. Plans to replace an existing pavilion with a 30-bedroom luxury Art Deco-style hotel were given the go-ahead in December 2010.

Inception Group to open fourth site: Inception Group owners Charlie Gilkes and Duncan Stirling, who operate Chelsea speakeasy Barts, 1980s-themed nightclub Maggie’s and Italian bar, pizzeria and karaoke venue Bunga Bunga, are to open Phileas Fogg in Mayfair’s Berkeley Square this summer. Hidden down a small side street off Berkeley Square, a small plaque will mark a door with Victorian lanterns hanging outside. On arrival, Mr. Fogg’s valet Passepartout will be on hand to take guests’ coats, umbrellas and calling cards. The menu will be an interpretation of Victorian cocktail culture, with classics from the era being revived with a modern twist, such as absinthe aperitifs, gin fizzes, Grog’s, sazeracs and stirrup cups. Gilkes said: “We’ve created Mr Fogg’s with a sense of history, adventure, fun and imagination. We hope to take you on a journey very soon.”

Spirit converts Ellsemere Port pub into John Barras franchise site: Spirit Pub Company has converted The Grace pub in Ellesmere Port into a John Barras franchise pub after a £200,000 refurbishment. The pub in Stanney Lane has now been transformed into a John Barras with new décor, new furniture and a refurbished bar with live sports and brand new menu. The kitchen has also had new equipment installed to strengthen the food offer, which will include deals such as two main meals for £10 running all day, every day. Dave and Carina Robinson have taken over as franchise managers at the new-look Grace.

Delfina restaurant to re-open at Tanner & Co: The Delfina restaurant in Bermondsey Street has closed for refurbishment and will reopen in May under the name Tanner & Co. When Tanner & Co opens in late May it will offer a 100-cover restaurant and event space for up to 250 guests.

Nando’s eye up former Yates’s site in St Helens: Nando’s is set to open in a former Yates’s site – currently empty - in St Helens town centre. The two-floor corner building, which a decade ago was occupied by Yates’s and more recently the Hour Glass, adjoins the Cineworld cinema and Running Horses pub. Nando’s plans to open the 110-seat restaurant in May, creating 36 jobs. Simon Haigh, regional managing director of Nando’s, said: “We’re extremely excited about opening our new restaurant in St Helens, and I know the team can’t wait to get started and open its doors to the public.”

Subway launches business simulation game globally: Sandwich chain Subway has launched an online “business simulation” game that allows players in the 100 countries where the brand operates to build their own virtual Subway unit. The chain is challenging players to compete against each other to build the best restaurant by 12 March. The top five winners will receive an all-expense-paid trip to the sandwich chain’s headquarters in Connecticut to meet Subway executives to explore work or entrepreneurial options with the company – and meet founder Fred deLuca.

Ponti’s buys Marine Ices Chalk Farm site: Italian restaurant chain Ponti’s has bought the famous Marine Ices ice cream shop site in Chalk Farm. It is the end of an era for the shop which has been run by four generations by the same family after it was set up by Gaetano Mansi in Drummond Street, Euston, moving to Chalk Farm in 1947.

Monty’s Wine Bar and Dining takes Fitzrovia site: Monty’s Wine Bar and Dining has taken over, on assignment, the leasehold interest of the former Soho Japan at 52 Wells Street, Fitzrovia. The premises are held on a 20-year lease from 13 February 2004, subject to five yearly rent reviews at a passing rent of £50,000 per annum exclusive. A substantial premium was also agreed. Jonathan Moradoff, associate director of agent Davis Coffer Lyons, said: “This has historically been a very underserviced part of the West End for food and beverage venues but it is really starting to flourish. The area is home to many media and TV production offices in need of a new eaterie, and Monty’s Wine Bar and Dining will be a great addition to the vicinity, alongside local operators such as Riding House Cafe and Kaffeine. The redevelopment of the Middlesex Hospital site amongst other improvements nearby means there is increasing demand for A3 units across a much broader perimeter in Fitzrovia.”

Orchid launches new style carvery – one site sees 62% sales growth: Managed operator Orchid Group has launched the first of its new style carvery pubs which aim to take eating out to the next level with a unique inclusive, community style. The pubs retain a high focus on quality British produce and value for money but has opened up eating out to different groups of people, all under one roof, by building extra walls. Warm and welcoming, the new carveries are taking a different road from competitors. Where some pub companies are removing walls to create large, open plan pubs, Orchid is putting in glass walls to ensure the spaces work for different groups of people at the same time. “Massive spaces don’t work for us – they feel too empty even with several groups in and don’t create a warm, friendly atmosphere,” said Simon Dodd, commercial and people director at Orchid Group. “Instead, we’re actually breaking down barriers by putting up special glass walls in our new style carvery pubs. These walls allow us to create spaces that are connected but retain their separate characters, meaning all sorts of customers can enjoy the same quality food and drink without one single group dominating the feel of the pub.” The glass walls allow each group of people, whether lads watching the football, families enjoying some quality time together or older guests who are part of the Diamond Club loyalty scheme, to enjoy the pubs at the same time. They can hold their conversations without having to shout over others but still feel part of the pub community. The re-zoning of the pubs has been a real success and, along with the commitment to British produce and ingredients to help reduce food miles, is creating an exceptional offer in the pub sector. At the Young Pretender in Kings Langley, General Manager Jenny Searle says the pub now has a much more homely feel. Since the redesign the pub has seen year-on-year sales increase by 28% as it now attracts a wider demographic. “Previously we had a single large space that was more like an extended bar, now we have a dedicated dining space that is personalised and homely. Customers tell us it feels much more warm, comfy and inviting.The glass partitions have allowed us to create areas for different groups, so friends can come and enjoy a pint while watching the football but families and couples have their own space for enjoying a quiet meal.” The Ainsworth Arms in Manchester is another of the new style carveries and General Manager Celia Heaton says customers are very pleased with the changes. The pub has seen a 62% increase in like-for-like sales over last year. “The interior is now much brighter and fresher with a colour palette of pale blues and greys,” she said. “It is more like an inviting, friendly living room. It feels light and summery and our customers are really loving the new look. The food offer remains the same high quality with a focus on British Red Tractor assured meat which always keeps people coming back for more.”

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