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Tue 30th Apr 2013 - Bill’s, Brunning & Price and Poncho8

Story of the day:

Jacques Borel – VAT cut to 5% would create 670,000 sector jobs: A new study released today (Tuesday, 30 April), commissioned by the Jacques Borel VAT Club, which represents 43 major pub, restaurant and hotel operators, has concluded that a cut in VAT from 20% to 5% on food and drink could create as many as 670,000 jobs in the UK. The Jacques Borel VAT Club is supported by a wide range of pub, restaurant, foodservice and hotel companies, including Charles Wells, Fuller’s, Heineken, JD Wetherspoon, Mandarin Oriental, Pizza Hut, Pret A Manger, Prezzo, Punch Taverns, Roadchef, SA Brain, Shepherd Neame, St Austell, Subway and TGI Friday’s. A survey of operator members by the VAT Club has found that they would pass on more than 50% of any VAT reduction in lower prices, creating increased customer traffic of between ten and 12%. The increase in traffic would lead to the job creation levels outlined in the report. The savings would also be used by operators to increase staff pay, as well as increase investment levels and training. The study finds that the Treasury would see an initial loss of between £5.5 billion and £7.8 billion as a result of reducing VAT to 5% in the sector. However, the losses reduce sharply as employment generation produces increased tax receipts, businesses in the sector pay higher tax receipts and the ‘black economy’ shrinks – also 60% of jobs created would be among those previously unemployed. The report states: “Under certain potential scenarios, the overall impact of the dynamic stimulus that a VAT reduction would give to sector growth would be fiscally neutral. In other words, the indirect gains to the Exchequer could offset the direct loss in VAT yields.” Jacques Borel, a French entrepreneur who has successfully campaigned for VAT reduction in hospitality across Europe, said: “The study shows that a targeted VAT reduction to 5% in the hospitality sector would be a very powerful and cost-effective way of creating employment in the UK. The UK should follow the lead of its European neighbours in boosting its economy and creating employment, particularly among the young, many of whom already begin their careers in the leisure sector.”

Industry news:

ALMR opens operations managers awards: The Association of Licensed Multiple Retailers (ALMR) has opened the 17th ALMR Operations Managers Awards for entries via the dedicated website www.almropsawards.org.uk. Nick Bish, chief executive, ALMR, said: “We are exceptionally proud of the Awards and the talent pool of operations managers that lead success at the sharp end of our industry. It is this talent that the ALMR Operations Managers Awards exists to recognise, reward and develop.” The awards are supported by leading operators and suppliers from within the sector. Patron spokesman Paul Chase, of CPL Training, said: “The awards say so much about the individual nominated and of course about the company that they work for. It says that they recruit well, they support their employees and they actively promote their individuals to be the best in their field with internal as well as external training. We look forward to seeing another great set of nominations for the operations managers coming forward for the 2013 Awards”.

Hotel occupancy increased in March: Average hotel occupancy in March increased to 72.1% compared to 71.2% in March 2012. Revenue per available room was £65.98 compared to £66.96 in March 2012. Payroll as a percentage of turnover stood at 29.1% compared to 28.9% the previous year. Hospital Intelligence stated: “It was a tough first quarter as London hotels registered a profit decline. Revenue growth was wiped out by rising costs in the provinces as hotels felt the chill.”

London pizza named as most delicious food: A make-shift venue in a former Scout hut in east London serves a pizza that is the most delicious food item in the world, beating dishes from Italy, according to voters on the Chowzter Fast Feast awards. Story Deli took the top prize as well as the pizza award for its Margherita, made with type 1 Molina Grassi SpA organic flour, rolled thin and baked for 30 seconds. The pizza is crunchier and more brittle than a traditional base and closer to a Roman pizza than the Naples style that is popular in the UK.

Company news:

Greene King boss clashes with The Guardian over tax avoidance scheme: Greene King chief executive Rooney Anand has clashed with The Guardian over a tax avoidance scheme called Project Sussex. Greene King has vowed to appeal an HMRC decision to block the scheme, which has been described as an attempt to create millions of pounds of tax relief “out of thin air”. Greene King will make a second appeal against HMRC, taking the decision to an upper-tier tax tribunal. However, MPs on the Public Accounts Committee cited the scheme as one example of “an illegitimate game to outwit the taxpayer”. Anand clashed with The Guardian’s Simon Bowers when the journalist asked him about the scheme. He told Bowers: “There is so much bad news. Greene King is trying to do the right thing by its investors, its customers and its people. You’ve used this opportunity to hit me over Project Sussex.” Asked by Bowers if Greene King was risking a Starbucks-style boycott of pubs and beer brands, Anand said: “I thought I was ringing The Guardian. You’re behaving like a tabloid journalist, with respect ... I think you’ve behaved dishonourably.” He later added: “To accuse Greene King of being corporate tax dodgers à la Starbucks, Google, etc was a total surprise and a shock. It’s an insult to a 214-year-old company that is trying to prevail under the most difficult conditions – with some success, I might add – and that has paid many hundreds of millions of pounds in tax over the years.” Lawyers for HMRC claim that Greene King received tailored tax advice from Ernst & Young suggesting it could build a series of transactions between companies within the same group that would leave it with a tax advantage. In a judgment handed down by the first-tier tax tribunal last summer, it was confirmed that Greene King knew “the true underlying purpose of the transactions (was) as a means, if it succeeded, of generating relief for the payments of interest made without corresponding liability to tax on the receipts”. HMRC issued “amendment notices” in relation to Greene King group companies three years ago, effectively blocking Project Sussex.

Richoux Group – Villagio and Dean’s Diner have equal roll-out potential: Richoux Group chief executive Ed Standring has told Propel that he believes the company has two brands with equal roll-out potential. He said: “We think Villagio (at six sites) and Dean’s Diner (at three sites with one due to open in British Land’s Whiteley Village development near Fareham) have equal potential. They’re very different in dwell time and spend-per-head. Dean’s Diner is just over £10 and has a dwell time of 30 to 40 minutes while Villagio is just under £16 per head. Dean’s Diner has lot of potential and is well-suited to leisure and retail parks.” Dean’s Diner’s nearest competitor is Ed’s Easy Diner although Standring believes Dean Diner’s extended menu gives it competitive edge. The company is in ‘legals’ on three more openings in 2013 to add to the two already confirmed.

Former Caprice Holdings chief executive to open first restaurant: Des McDonald, the former chief executive of Caprice Holdings, is to open The Fish & Chip Shop on Upper Street, Islington. The site will offer ‘posh fish and chips’ for dining-in and takeaway. Lee Bull, formerly of Scott’s, and Tower Isho of J Sheekey are both involved. It is McDonald’s first venture under Des McDonald Restaurants Etc Limited. Hot Diners reported: “The feel they’re aiming for inside is a mixture of a Victorian fish cafe, with plenty of wood panelling planned. Up front, there will be a cold counter dining area, and towards the back there will be a few booths as well as some “refectory style” dining along a long table. At the back, the kitchen will be visible through glass that will be made to look like an old fish & chip shop window. Food-wise, there will be dining in-house as well as takeaway. One of their signatures will be a revamp of the buttie. So there are a number of buttie options including a shrimp burger, curried chips, crab and a saveloy (which they’ll be making themselves).”

Brunning & Price to open first site of 2013 next month: Brunning & Price, the gastro-pub operator owned by The Restaurant Group, will open its first new pub of 2013 next month. The Bull’s Head in Mottram St Andrews will seat 150 and was previously an Italian eatery called Osteria Mauro. Brunning & Price had hoped to open the site this month but it has been put back. In August, the company will open The Sparrowhawk in Formby. The company said: “The Sparrowhawk (formerly Tree Tops) is a characterful country property set within five acres of woods and parkland. After many years faithfully serving the local community it closed its doors for the last time in 2011, and has since fallen into disrepair. We’re planning to knock down the chalets (built on site) and strip the building back to its original core. We’ll then sensitively extend it, re-design the interior and landscape the grounds.”

Noodle bar chain Wasabi reports rise in return on invested capital to 56%: Wasabi, the London-based noodle chain that operates 29 sushi and noodle takeaways across London, has reported a 25% rise in turnover to £40,741,577 in the year to 31 August 2012 following a 44% rise the year before. The return on invested capital has risen to 56% from 40% the year before. The company defines return on invested capital as profit before taxation expressed as a percentage of net assets. The company stated: “The increase shows that we are now seeing a return on investments into opening new stores in 2010-2011.” Gross margin increased to 41% from 37% as a result of managing “core direct costs of food and wage effectively”. Pre-tax profit jumped to £2,402,042 from £1,022,895 the year before. The company added: “We continue to invest in the design and lay-out of our branches and the use of new technology to monitor our customers’ buying patterns.”

JD Wetherspoon to open in Yeadon, West Yorkshire next month: JD Wetherspoon is to open a pub in Yeadon, West Yorkshire next month. The Wetherspoon pub will open on the High Street, on the site of The Clothiers pub, which can trace its history back to 1822. The company has spent £1.25 million re-developing the premises it will be called The Clothier’s Arms. The name is a reminder that Yeadon is a former mill town that specialised in the production of woollen cloth. The pub will open on Tuesday, 7 May. 

Bone Daddies to open Flesh & Buns: Bone Daddies ramen bar is opening a new site called Flesh & Buns, which will launch in Seven Dials, Covent Garden. Chef patron Ross Shonhan says it will be an ‘evolution of the original Bone Daddies’ with elements of a ‘Japanese pub’.

Bill’s takes Bluu site from Marston’s for latest opening: Bill’s Restaurants has taken a lease of a Bluu site in Hoxton owned and operated by Marston’s. Bill’s will take the 4,000 square feet over ground and basement at a rent of £125,000 per annum with Marston’s as landlord. Bill’s Hoxton is expected to open in July. Bill’s, owned by Richard Caring, currently operates 19 venues across London and the south east, with three more due to open soon in Holborn, Putney and Westfield shopping centre. Nick Weir, director at Shelley Sandzer, acting for Bill’s, said: “Bill’s is an exciting brand and their growth is largely based on selecting the right venues for the restaurants. Hoxton is now of the hippest places in London and is a great location for them and this particular site has a lot of recent history having been the site of the famous Blue Note Café.” 

Graze Bar and Chop House operator reports strong sales growth: The operator of three Graze Bar and Chop House sites, Bath Ales, led by Robin Couling has reported strong sales growth as it opened a flagship site in Bath. Sales rose 25.5% to £6,868,739 in the year to 31 August 2012, up from £5,474,734 the year before. Pre-tax profits dropped to £85,236 from £352,966 the year before as it funded new openings. Gross profit margin rose from 27.7% to 29.9%. The company stated: “Cash flow remains very strong across the group for the year and the group balance sheet has strengthened greatly. The growth of the group will continue and we will seek suitable sites.” The Bath Ale business was subsumed within a new holding company, Hare it House Holdings, in July 2011.

PizzaExpress freehold in Christchurch up for auction with £1.15m to £1.25m guide price: The freehold of the PizzaExpress site in Christchurch, Dorset is to be auctioned by Allsop on Tuesday 21 May. The site, which is next door to Loungers Arcado Lounge site, is let to PizzaExpress until 2037 on a current rent of £75,000 per annum.

Orchid Pizza Bar & Kitchen segment set to turn over £18.5m this year: Orchid Pub Company genre-busting Pizza Bar and Kitchen brand is set to turn over £18.5m this year from 21 sites, commercial director Simon Dodd has told Pub and Bar magazine. The first site to be converted, The George in Harpenden, has seen sales lift from £8,000-a-week to £24,000-a-week. Dodd told the magazine: “It’s an offer where you get off like a rocket. Sites are phenomenal in terms of sales – some have lifted £10,000-a-week and it keeps growing.”

Jamie Oliver to re-open original Fifteen restaurant today: The original Jamie Oliver Fifteen restaurant in Islington re-opens today with a more relaxed neighbourhood restaurant feel. Oliver said: “I’m grateful that we’ve been busy in the last ten years, but I really want to focus on it being an iconic neighbourhood restaurant – a place you can drop into and eat with or without booking.”

Patisserie Valerie adds 105th site today: Patisserie Valerie, led by Paul May, opens its 105th site today – located in Derby’s Westfield Centre. Company backer Luke Johnson said last week that the company was happy to avoid “ferocious” competition in London to focus on expansion in the provinces where the brand is “a big deal”. 

Amber Taverns buys four pubs, including two from Bramwell, one from Marston’s: Managed operator Amber Taverns has bought four pubs, including three in the West Midlands. The pubs are in St Helens, Stoke-on-Trent, Walsall and Rowley Regis and the acquisitions are worth in excess of £2.5m. The pubs include The Varsity in Walsall and The Syndicate in Hanley, which have both been bought from national operator the Bramwell Pub Company. The Varsity will reopen in the summer, under a new name yet to be decided, and The Syndicate is relaunched this week as The Auctioneer. The company has also bought The Ashley in Rowley Regis from Midlands-based Marston’s which will also reopen in the summer.

Luminar set outs to halve energy consumption by 2014: The UK’s largest nightclub operator, The Luminar Group, has unveiled ambitious plans to halve its energy consumption by 2014. Its new energy consumption programme, ‘Turn Stuff Off’ works with managers to foster a more efficient and long-term approach to energy usage. As part of the initial programme, Luminar rolled out smart meters to all its nightclubs, giving management teams the tools to track consumption over time and identify areas for improvement. Head of procurement Philip Cooke said: “It’s not rocket science, but it is about using the information we have on where and how we are using our energy and then engaging with our managers to ensure that it’s used more efficiently. This is about creating new, sustainable and life-long habits that each individual takes responsibility for.”

Wildwood to take Greggs site in Peterborough: Wildwood, the restaurant brand owed by Tasty, is to open a new site in a former Greggs site in the middle of Peterborough, adding an empty retail unit next door. Meanwhile Cafe Clarkes, will open at the Key Theatre on 24 May, a new dining venture for Dinesh Odedra, from The Banyan Tree in Peterborough Westgate and Werrington, and Lee Clarke, from Clarkes in Lincoln Road.

Greene King to convert Punch pub to Hungry Horse: Greene King is to convert a Punch Taverns pub in Folkestone, The Black Bull, into a Hungry Horse. It was acquired through agent Savills of a guide price of £750,000. The pub is prominently positioned within a one-acre site close to Folkestone town centre.

Poncho8 adds breakfast to burrito offer; prepares to open fifth site: Poncho8 is to begin serving breakfast with immediate effect. The new breakfast menu has been developed by Poncho8’s innovation chef, Stephen Parkins Knight who, has developed award-winning food for Dishroom, M&S, Paris Baguette and Greencore. The Poncho breakfast wrap will be a toasted tortilla, filled with hot crispy bacon, a Poncho omelette, smoky ancho relish and soft cream cheese. Also available will be a toasted Granola Pot, served with Greek yoghurt and Poncho8’s homemade pineapple, coconut and lime salsa and freshly-made porridge, prepared in-house each morning. The three lines will be joined by premium arabica coffee. Poncho8’s fourth site, on New Street Square, opened last Thursday with a fifth site on Devonshire Row opening tomorrow, Wednesday 1 May. Both the new sites will serve breakfast immediately, with Poncho8’s remaining three sites following suit soon after. Funding is in place for Poncho8 to expand to 20 sites by the end of 2014. “It’s been a great year for us so far, with the launch of the UK’s first burrito app and now two more Ponchos with an exciting new look,” said company co-founder Frank Yeung. “We’re very excited about breakfast and its potential in the City, and we can’t wait to refit our existing three sites.”

Adnams AGM – it is difficult to predict the full year: Suffolk brewer and retailer Adnams has reported that difficult trading conditions exacerbated by continuing poor weather summed-up its first quarter. At its AGM it stated: “The bad weather had a particular impact on our hotels, our tied pubs and on our free trade beer business. Overall our sales of our own beers were in line with those made in 2012, and marginally ahead of the UK market. This was driven by good growth in sales for home consumption. We continue to support our tied estate and free trade customers by holding Adnams beer prices for the fifth consecutive year. We completed the sale of The British Grenadier, Colchester during March and The Oyster, Butley in April and have seen good interest in two other pubs that we have currently for sale. Some good news occurred at the time of the budget when the government finally scrapped the beer duty escalator and made a 2% cut in duty rates. This is a small but important step towards reversing the damage that the 42% duty increase since 2008 has had on our industry. Turnover in the shop retail business has been similar to 2012, but with a lower cost base we are seeing some improvement in the bottom line result, despite the fact that sterling has weakened against the euro during the first few months of 2013. We are cautious about the outlook for 2013. As our profit tends to be weighted towards the second half of the year, our interim result can be more variable and it is our expectation that our operating profit in the first six months of 2013 will not match that made in 2012. The beer market remains in a difficult place with total first quarter volumes down by 2.9% and pub volumes down by 5.5%. Given all the uncertainties, it is difficult to predict the full year result.”

M&B and Spirit short-listed for sustainability awards: Mitchells & Butlers and The Spirit Pub Company have been shortlisted for this year’s Footprint Awards. The Footprint Awards are the foodservice industry’s only award scheme encouraging sustainability and responsible business throughout the supply chain. There are 13 awards in total, 11 open to nominations, and two – the Community Vote and Special Achievement Award, which are in the hands of the public and a team of Footprint judges. Footprint Media Group chief executive Nick Fenwicke-Clennell said: “The sheer number and quality of entries demonstrates that the way our industry perceives sustainability has changed enormously in recent years. The very notion of sustainability having once been a “buzz-word” has become outdated. Winners will be announced at an awards ceremony to be held at RIBA, London on 23 May.

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