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Mon 29th Jul 2013 - Giraffe, Greene King, Gondola and Wabi

Story of the day:

Gondola Holdings revises estimate of PizzaExpress potential in the UK: Gondola Holdings, which operates 680 restaurants in the UK serving 40 million meals a year, has revised downward it estimates of the roll-out potential of PizzaExpress to another 200 sites in the UK – at the end of last year the company thought there was potential for an extra 250 plus. In the company’s 2013 interim report, chairman Chris Woodhouse reported that the company opened eight new PizzaExpress sites in the first half of 2013 to bring the total to 418. Average spend per head at PizzaExpress rose in the first half to £15 from £14 last year. PizzaExpress openings eclipsed total openings at other Gondola brands in the first half on 2013 – there were three Zizzi openings, one extra Ask site and three Bryons. Woodhouse reported that the international PizzaExpress franchise business has gained ‘good traction, now with over 50 restaurants in 12 international territories’. He added: “Our partners are now seeing strong growth in their markets.” Woodhouse reported the addition of calzone to the PizzaExpress menu just before Christmas ‘has been an overnight success’. Meanwhile, PizzaExpress, which sells 31 million pizzas a year through supermarkets and is achieving double-digit sales growth by value in supermarket sales, has added three items to its retail range. Already the number two brand in the ambient dressings category, PizzaExpress has added chilli and tomato, basil pesto and improved balsamic flavours to its dressings portfolio. A total of 75% of the 126-strong Zizzi brand has been refurbished and Woodhouse reported that customer perception of healthiness has increased with its new Skinny pizza range. Ask Italian, operating at 117 sites compared to 126 last year, now has a ‘pipeline of new sites’ after successful décor, service and menu improvements. Seven new Byron openings are scheduled for Byron in the second half of 2013, with three outside of London. Woodhouse added: “We are confident that the positive momentum in our business will enable us to deliver future growth. We have delivered a resilient performance, despite the challenging backdrop, as the UK economy remained under pressure.” Average spend per head at Zizzi stands £19, is £18 per head at Ask Italian and £16 per head at Byron. Gondola Holdings is owned by Cinven. Total sales in 2012 were £577.6m, up 3.8% and Ebitda was £108.1m, down 5.6%. No figures are given in the 2013 interim report. 

Industry news:

Europe’s leading wine-producing nations try to block minimum pricing in Scotland: Europe’s leading wine-producing nations have moved to block Scotland’s plans for alcohol minimum pricing by warning of the “grave consequences” for their domestic industries. France, Spain, Italy, Portugal and Bulgaria have said the policy is illegal and ineffective and would have the effect of unfairly protecting Scotland’s drinks producers from competition. The submissions have been made to the European Commission, which is currently considering the Scottish Government’s request to be granted an exemption from trade regulations that prevent price fixing. According to a BBC investigation, only one of the 12 countries that have written to the commission on the proposal support minimum pricing. European wine-producers have lower production costs and lower prices than British manufacturers. To succeed, Scottish ministers must show that their proposal for a 50p per unit minimum price is necessary and proportionate to the binge-drinking problem it is trying to address.

ADPH withdraws from responsibility deal: The Association of Directors of Public Health has withdrawn from the Responsibility deal after expressing its strong disappointment over the government’s decision to abandon a minimum unit price for alcohol and standardised packaging of tobacco products. Amid ‘concerns that the government is seemingly allowing vested interests to adversely influence policies intended to improve the public’s health’, the ADPH Executive has concluded that the Association of Directors of Public Health should withdraw from involvement with the Responsibility Deal in its entirety. ADPH President Dr Janet Atherton said: “Both standardised packaging and minimum unit pricing (MUP) are evidence-based interventions that will, individually and together, reduce the burden of premature death and disability and reduce health inequalities – particularly in the most deprived communities.”

Barclays set to increase cash set aside for interest rate swap mis-selling: Sky News has reported that Barclays will top up its existing £850m bill for mis-selling interest swap products to small businesses this week. A Barclays spokesman declined to comment on the size of the new compensation figures but it is understood that they will take the amount it has set aside for swaps mis-selling to well over £1bn.

Government admits scale of supermarket irresponsibility: Figures released by Home Office Minister Lord Taylor of Holbeach in the House of Lords this week revealed that almost all the major supermarkets are selling large volumes of alcohol below cost. Commenting on the finding in the latest available figures that six out of seven supermarkets sold alcohol below cost, with a total of over 220 million litres of alcohol sold below cost price. ALMR strategic affairs director Kate Nicholls said: “The government’s admission of the scale of below cost selling and supermarket irresponsibility when it comes to pricing clearly demonstrates the need for swift, tough and effective action not only to tackle pocket money prices but to impose the same regulation of promotional activity in the off-trade as pubs, clubs and bars currently face.”

Company news:

Adam Bowers leaves Orchid Group to join Greene King: Orchid Pub Company’s director of marketing and digital Adam Bowers has left the company to join Greene King, where he is understood to be taking charge of marketing within the company’s 200-strong Hungry Horse brand. Bowers has held at number of key marketing role at Orchid, including overseeing marketing at Premium Bars and Restaurants, since joining the company in 2006. Before joining Orchid, he worked in marketing at Laurel Pub Company and SFI Group.

Tim Martin – prospects for the economy are slowly improving: JD Wetherspoon founder Tim Martin has argued that the prospects for the economy are slowly improving. He told The Guardian: “People are thinking, by the skin of our teeth, we have dodged financial Armageddon and maybe we will celebrate with a few pints at Wetherspoons. I think if you summed up the great British consumer that would be their attitude. They are not planning on splashing out at the Ritz. We have had a massive debt binge; we have now got a hangover and it is going to take a decade or two for the hangover to subside.” The company opens its 888th pub tomorrow, The Star Inn in Honiton, Devon (population: 11,822). Martin also revealed that the average Wetherspoon pub is now selling almost 1,000 cups of coffee and tea a week. “By some way the highest in the industry,” he said. Meanwhile, Morgan Stanley analyst Jamie Rollo noted that the company will benefit from a significant reduction in interest rate costs from its 2015 financial year as swaps mature, with Earnings Per Share growth expected to accelerate from 11% in the 2014 financial year to 18% the year after.

Red Hot World Buffet plans 25 restaurants by 2015: Red Hot World Buffet, the seven strong eat-all-you-want buffet chain, plans to have 25 restaurants by 2015. The company, led by Parmjit and Helen Dhaliwal, is in talks with Luke Johnson over a possible investment. Parmjit told The Times: “We’re now looking at the next phase of the business. Once the investment process is complete, it will professionalise the company.” Red Hot World Buffet serves two million customers a year – its most recent Nottingham Cornerhouse opening served 80,000 people in its first ten weeks of opening. Another opening is planned for Leicester this year and the company is eyeing sites in Glasgow and Sheffield.

Tesco to launch new casual dining concept in Coventry; adds community rooms: Tesco will launch a new casual dining concept called Decks at its Arena Shopping Park site in Coventry on 5 August – and is planning to use spare space at its sites to install community rooms. Decks, part of the company’s Tesco Family Dining Division, will feature carvery style decks – with hosts manning different serving stations. Decks will offer “classic British favourites, from breakfasts and roasts to crumbly cakes served with a proper cuppa”. A job advert states: “Our food is on display and so is our kitchen team. Serving as a “Deck Host” means chatting, recommending to guests and carving fresh roasts. Behind the scenes is different as our “support chefs” are working at pace backing the deck, and that means clean plates and fresh food.” Former Mitchells & Butlers chief executive Adam Fowle has been advising the supermarket chain on its strategy. The launch of Decks comes the same day as the company opens the first Giraffe site at Watford Extra. Tesco’s portfolio of food and drink brands includes Harris + Hoole and Euphorium Bakery. Meanwhile, the first community room, which will be available for yoga classes, music lessons and birthday parties, will be opened at its Tesco Extra site in Watford, which will host the first Giraffe. The 600 square foot room will be available free of charge and include tea and coffee-making facilities. The community room is similar to initiatives that Tesco already runs in some of its stores in Thailand. 

Wabi in Horsham on the market for £1.35m: The freehold of the first Wabi restaurant opened by former Nobu chef Scott Hallsworth in Horsham is on the market for £1,350,000 through agent Davis Coffer Lyons. The site opened in 2008 following conversion from a former Punch Taverns pub – it has 4,100 square foot of trading space. Hallsworth went on to open a second Wabi in London that closed two months ago after a falling out between him and his co-investors. The Horsham site is located on East Street, which is also occupied by Wagamama, Strada, PizzaExpress, Giraffe and Cote.

Marston’s came close to running our of Pedigree during Lord’s Ashes match: Marston’s chief executive Ralph Findlay has revealed that Marston’s came close to running out of Pedigree on the last day of the Lord’s test match. The had to scramble a tanker carrying 8,640 pints of its Pedigree ale down from Wolverhampton to the St John’s Wood ground to quench cricket watchers’ thirsts. “We came close to running out,” Findlay told The Independent. “But we got there in time and we have had a great Ashes. More broadly, the sunshine has been great. Over 90% of our pubs have beer gardens or good outdoor areas and we have benefited from the big investment we have made in those in the past couple of years.”

Center Parcs reports profit and turnover boost: Center Parcs has reported turnover has risen from £291.7m to £303.5m in the year to April. Pre-tax profit was £18.6m compared to a loss of £47.9m the year before when there were one-off costs and a financial restructuring. Occupancy levels have risen to a record 97.3% in the most recent year. The fifth Center Parcs is due to open in Woburn in Spring 2014.

The Sunday Times – Stonegate due to buy Living Room in the next fortnight: The Sunday Times has reported that managed operator Stonegate Pub Company has entered exclusivity in relation to acquiring the 13-strong Living Room chain. The newspaper suggests Stonegate could acquire the business for around £10m in the next fortnight.

Giraffe offers free kids food at 22 sites during the summer: Giraffe is offering a free kids meal and drink from the children’s menu at 22 sites when an adult meal is ordered. The promotion starts today (29 July) and lasts all day between Monday and Friday until Friday 23 August.

Marco Pierre White – the future is fast casual: Chef Marco Pierre White has claimed that he is now becoming a hotelier rather than a restaurateur. He told a local newspaper: “I evolved from being a chef to being a restaurateur, and I’m now moving into being a hotelier. The most important aspect of any restaurant is the environment you sit in. Think about your favourite restaurant, You like the proprietors, the staff are friendly, you’re relaxed, and they bring food to the right standard and the price you’re happy to pay, so you have a fantastic night. It’s not about knick-knacks on a plate. I don’t like Michelin-starred restaurants. I find a lot of the modern Michelin-starred restaurants are trying too hard. I like the old-fashioned restaurants, where you get the show as well and it’s not just about what’s on your plate. The future of dining out is casual dining. Michelin-star restaurants are not what people want – little knick-knacks of food served 12 times. The world has changed. Let’s be real.”

Davis Coffer Lyons selling two former Yellowhammer venues: Two former Yellowhammer sites in Bournemouth are being marketed by Davis Coffer Lyons (DCL), after the agent was appointed by The Ackerman Group to manage their lettings. The former Bliss and Chilli Whites offer circa 9,500 square foot of space and have 24-hour licences. Jonathan Moradoff, associate director at DCL said: “This is a fantastic opportunity to acquire two highly desirable units in an excellent part of the town. Bournemouth has a large student population and a thriving nightlife culture. We have already received significant interest and are confident that we will be able to announce a buyer shortly.”

Fuller’s adds to London estate with £2.5m Punch pub: London brewer and retailer Fuller’s has bought a Punch pub, The White Hart, close to Blackfriars station, in an off-market deal worth in excess of £2.5m. “We knew that Punch might be interested in selling the freehold of the tied lease pub and we knew that Fullers were after exactly this type of premises, especially as business is booming in SE1,” said James Grimes, director of agent AG&G. “It was a rare opportunity – and everybody’s happy.” The White Hart is close to Blackfriars station and an easy walk to Waterloo. It bills itself as “Waterloo’s quaintest back street pub”, serving cask ales and British food.

Simon French reiterates ‘Sell’ recommendation on Domino’s shares: Panmure Gordon analyst Simon French has reiterated a ‘Sell’ recommendation on Domino’s shares, with a Price Target of 310p, ahead of tomorrow’s first half results. He said: “The performance of the UK business in the Second Quarter was ahead of expectations reporting 6.1% like-for-like sales growth, although the rate of new openings is disappointing (ten versus 13 in the same period last year). The small Republic of Ireland and Switzerland markets also performed well reporting 4.9% and 6.2% like-for-like sales growth respectively in Quarter Two. However the group’s German expansion hit its first speed bump with corporate stores performing below expectations (albeit franchise stores are performing strongly).”

Guinness offers free pints to drinkers who tap their phone on the font: Guinness is running a promotion encouraging users with Android or Blackberry phones fitted with NFC – Near Field Communication – technology to win a free pint by tapping their phone on the bar-top Guinness font. To have the chance of winning a pint in one of the 20 pubs around the UK taking part in the promotion, drinkers tap their phone to the harp logo on the Guinness bar tap and hit the on-screen button that will then appear to enter the draw. Cheap, unpowered NFC chips, or “tags”, are beginning to be used for a number of promotions involving turning on apps on smartphones. At the same time, retailers are starting to look at NFC technology for cardless payment “mobile wallet” systems. Earlier this month the six-strong Dublin-based Graham O’Sullivan restaurant chain announced that it had signed a deal with the retail software specialist Escher Group for an NFC and QR-based payments and rewards set-up. The system works with any Android NFC phone and allows the customer’s identity to be sent from the phone to the retailer’s point-of-sale terminal. It can be used for payments, coupon redemption and to amass loyalty points. 

Council’s faces £30,000 bill over nightclub owner fight: Nightclub owner Michel Harper has won a High Court battle against Guildford Borough Council – leaving it facing a £30,000 bill. The freehold owner of the Casino, Players’ Lounge and Bar Mambo, in Onslow Street, had challenged the council’s licensing department for inappropriately rejecting applications for a number of ‘shadow’ licences on the premises. Harper claimed that his companies, Extreme and Star Oyster, made the applications in order to protect licences for the venues, should he need to take over control following the exit of the company that currently runs them, Luminar.

Ossett Brewery takes Greene King site in Leeds: Yorkshire brewer Ossett Brewery has taken a lease to run the well-known Old Peacock pub opposite Leeds United’s Elland Road football ground, the freehold of which is owned by Greene King. The pub has traditionally been the favoured site of Leeds supporters and is undergoing a £400,000 refurbishment. Ossett Brewery has pledged to retain and build on these footballing links while also attracting the wider community by significantly boosting its food offering, with pies as a speciality.

Dunkin’ Donuts reports profit surge: Dunkin’ Donuts has reported a 120.6% increase in net income during its June 29 ended second quarter. The growth was driven in part by increases in cool drink and speciality coffee sales, as well as strong sales for early-daypart sandwiches, said chairman and chief executive Nigel Travis. During the quarter, Dunkin’ Donuts also signed its first three franchisees in Southern California.

Food stand row sees 4,000-signature petition against pub: A row over a lease that lets a high street creperie stall use a fridge and kitchen in a pub garden has seen a 4,000-signature petition organised in an attempt to stop the pub landlady throwing the food stall’s equipment out. La Creperie de Hampstead has used the facilities in the pub garden at The King William IV pub in Hampstead, North London for more than 30 years, leasing the space off the pub owner, now Heineken’s Star Pubs & Bars. However, the lessee of the King William IV, Eat Pubs Ltd, wants the crepe stall’s owner, Edward de Mesquita, to leave, saying it now needs the space in the garden for itself. In a statement, the landlady of the pub, Elaine Loughran, a director of Eat Pubs, said: “As a result of proposed improvements to the beer garden and lavatories, it is no longer possible for the pub to accommodate such a large external refrigerator in its current location, and the Creperie has been asked to remove the fridge and vacate the storage facilities.”

Kuckoo opens second site in Cheshire: A dedicated rock and roll bar, Kuckoo, has opened a site in Cheshire – a Kuckoo venue already operates in Preston. Owner Richard Powell said: “Kuckoo has all the credentials of a world-class cocktail bar, with its luxe interior and supreme customer service, but the atmosphere created by the staff and the music is unlike anything Chester has seen before. Chester is already known for its vibrant social scene with a number of places doing some really interesting things with food and drink. Kuckoo is not only somewhere for people to kick back and let their hair down, but begins to rival bars in places like Manchester and London.”

On-trade beer sales drop by 5.8%: UK beer sales fell by 4.8% in the second quarter of 2013, according to the British Beer & Pub Association’s (BBPA) quarterly Beer Barometer. Losses in the on-trade (pubs, bars and restaurants) were higher at 5.8%. Off-trade sales also fell, but the 3.6% fall was the lowest second quarter fall since 2005. The BBPA is pointing out that these latest figures are compared to a quarter last year that included Euro 2012 and the Queen’s Diamond Jubilee and a double bank holiday. While more good weather would bring the prospect of a more promising third quarter, the figures show the continuing need for supportive tax policy from the government, says the BBPA, following the historic 2% cut in beer duty and abolition of the beer duty escalator in the Chancellor’s Budget. From March 2008 to March 2013, beer duty had risen by 42%.

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