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Morning Briefing for pub, restaurant and food wervice operators

Mon 12th Aug 2013 - Convivial, Enterprise, Giraffe, Miller Brands and Prezzo

Story of the day:

Morrisons – we aim to be a cheaper alternative to Starbucks and Pret A Manger; Waitrose opens farm shop: Two major supermarket chains, Morrisons and Waitrose, have moved to increase their food credentials. Morrisons is positioning itself as a cheaper food-to-go alternative to Pret A Manger and Starbucks with a plan to have 100 convenience stores open by the end of this year – 88 will have opened in 2013. The company bought 50 former Blockbuster and Jessops stores at the start of this year as part of a plan to kick-start its convenience store expansion. Chief executive Dalton Philips, speaking at the opening of a new convenience store on Oxford Street, said: “Supermarkets are going to start putting pressure on Starbucks and Pret because salads are half the price, coffee is half the price, People need to eat and they’re going to go to Pret or Starbucks. Some will always go because it’s a different experience, but in terms of price, there’s a real opportunity (for us) if they can’t afford to pay £2.25 for a coffee. I don’t think it’s us turning our guns on them but more of case of us opening up the market here.” The new Oxford Street site has fresh food at the front of the store and a food-to-go salad bar and sandwiches at the back. Philips said: “The bet you’re placing is that it’s so unique you get people to the back of the store.” Meanwhile, Waitrose has opened the first supermarket farm shop in the UK to showcase the produce grown on its 4,000-acre farm estate in Hampshire. The Leckford Estate outlet will sell more than 1,000 homegrown products including fresh meats and cheeses, bread, chutneys and a specially selected range of wine. As well as stocking products from the John Lewis-owned farm, the shop has sourced goods from more than 60 suppliers in the region. The company said popular products at its new venture may be distributed more widely to its 280 branches throughout the UK. Iain Dalton, head of the Leckford Estate, said: “Waitrose is in a very fortunate position to have its own farm, and the new shop, which is totally unique for Waitrose, can showcase not just the food produced on the estate, but allow outstanding local and regional food producers to flourish. The shop will sell the highest quality food and if something proves popular, there is the potential for it to be sold more widely.”

Industry news:

TripAdvisor subject to positive “herd mentality”: TripAdvisor reviews are subject to “herd mentality” with positive reviews likely to lead to more positive reviews, according to research by America’s Institute of Technology. Users who saw faked positive reviews on a website were 32% more likely to post their own positive review. The faked positive reviews produced final ratings that were 25% higher than average. The researchers found negative votes or comments are far less likely to induce other negative comments. Negative comments among the 6,000 doctored reviews were often quickly corrected by other users.

100 pubs listed as assets of value to the community: A total of 100 pubs have been listed by local authorities as assets of value to local communities in a move that aims to slowdown closures. Under Community Right to Bid powers, communities have six months to put in a bid to buy a pub that is up for sale. Community Pubs Minister Brandon Lewis said: “Camra’s campaign to list your local is doing a fabulous job raising awareness of our new Community Right to Bid. And I am delighted that 100 loved locals have now been listed as asserts of community value. We have known for hundreds of years just how valuable our locals are – not just as a place to grab a pint but also to the economies and communities of those they serve.” Camra chief executive Mike Benner said: “By listing their local, communities are ensuring that if it is under threat in the future there is a much-needed extra layer of protection which ‘stops the clock’ if a pub is put up for sale.” Pubs protected under the scheme include The Bull in Great Milton, Oxfordshire, and The Ivy House in south London. The current tenants of The Bull bought it after its previous owners, Greene King Brewery, sold it in 2012, after what they described as “genuine concern in the village about the future of our pub”.

Barclaycard – pubs and restaurants saw a 4.8% increase in sales last month: Barclaycard has reported that pubs and restaurants saw a 4.8% increase in sales last month as the heatwave loosened purse strings. Generally, spending in shops stands at its highest level in 18 months. Barclaycard chief executive Valerie Soranno Keating said: “it’s an undeniable vote of confidence in the future by British shoppers and shows that they are finally shaking off the longest period of austerity in a generation and are more readily parting with their money.”

Staycation trend provides boost for UK attractions: The staycation trend is providing a sizeable boost for UK attractions with the 50 most popular sites reporting a 22% boost in visitor numbers between May and August this year. The Association of Leading Visitor Attractions (ALVA) said the recession is encouraging families to take more days out near home while venues had become more creative in marketing themselves. Visitor numbers are forecast to be 20 million up on the 100 million that visited the top 50 attractions last year. ALVA director Bernard Donaghue said that UK residents have fallen back in love with ‘holidaying at home and having days out’. He added: “We are seeing it in increasing membership of The National Trust and English Heritage.”

Sky launches pub sports app: Sky has launched the Sky Sports Pub Challenge, an interactive mobile app that aims to drive footfall to pubs. Available only to pub and club goers watching live Barclays Premier League football in Sky Sports licensed venues, the free app is designed to create ‘unique match-day experiences’. The free downloadable Sky Sports Pub Challenge app gives Premier League viewers the chance to win weekly and monthly prizes. These include weekly Barclays Premier League match tickets, monthly prizes up to £2,500 and a grand end-of-season prize of £20,000, through pre-game predictions, real-time quiz questions related to the match on-screen and post-match polls. David Rey, managing director of Sky Business, said: “We’re launching our Sky Sports Pub Challenge app as part of our commitment to investing in helping licensees to get the most out of Sky Sports for their venues. By creating a unique point of interest and the best possible entertainment experience, it will help to drive profitable footfall to our customers’ venues ahead of the games, encourage people to stay longer after matches and to return for future games.”

Potato Council aims to reclaim the new potato: The Potato Council has launched new guidelines aimed at reclaiming the term ‘new potato’ after finding restaurants and supermarkets are wrongly using the phrase to describe small potatoes. The trade body is stressing that the term ‘new potato’ should only be applied to potatoes harvested between May and October and served within days of harvesting. The other test of a new potato is whether you are able to rub the skin off with your finger.

Manchester’s Corn Exchange to be turned into top dining destination: Manchester’s historic Corn Exchange is to be transformed into a city centre dining destination with the recruitment of a dozen independent restaurants and food retail outlets. The Grade-II listed building was badly damaged in an IRA bomb in 1996 and had to undergo significant refurbishment. It re-opened as the Triangle in 2000 but has struggled to attract and retain key brands to make it a successful shopping centre. Plans have now been submitted by owners Aviva Investors to turn around its fortunes in a £15m refurbishment. It hopes to attract London-based operators who want to open their first branch outside of the capital. The complete refurbishment of the building will start in early 2014 and is due to be finished by end of the year.

Company news:

Convivial London Pubs – indicative offers invited by 9 September; sells site for £1.4m: A deadline of noon on 9 September has been set for indicative offers on Convivial London Pubs, the operator of five freehold and one long leasehold pub in London. Offers in excess of £16.9m are invited to acquire the company – although sites may be sold individually. The Convivial board will consider indicative proposals before determining whether to continue or terminate the sale process. If appropriate, selected participants will then be given access to more detailed due diligence information following which revised proposals will be requested by 23 September. Convivial has also revealed that it is selling a seventh pub from the estate, The Pakenham Arms, near Kings Cross, for circa £1.4m in cash to an unnamed private buyer, with completion expected in October.

Peroni brewer Miller Brands UK reports turnover and profit up: Miller Brands UK has reported turnover rose to £239,427,000 in the year to 31 March 2013, up from £224,498,000 the year before. Pre-tax profit rose to £19,707,000 from £13,344,000 in the year prior. The company reported volumes rose by 4% compared to a market down 5%. Volumes of Pilsner Urquell rose by 10% during the year.

Tesco to pit Giraffe against Harvester at Broadlands site: Tesco has applied for planning consent to build a Giraffe in the car park of its site in Broadlands, Buckinghamshire. The company would build the restaurant where the Tomra Recycling facility is currently located. The recycling unit would be relocated. If approved Giraffe would provide direct competition to the new Harvester restaurant opening in Broadfields Retail Park next month. Consultation is currently open on the plans until 30 August.

England rugby captain to open coffee shop and wine bar: England rugby captain Chris Robshaw is to open a coffee shop and wine bar in Winchester with best friend and former Hampshire cricketer Kevin Latouf. The pair will open Black White Red at the end of this month with an official opening in September. Robshaw said: “It’s a new venture for me and we thought we would give it a go. It’s doing something besides the rugby and having interests outside of the game.” The site, opposite the Discovery Centre, has stood empty for three years.

Pembroke invests £5m in La Bottega: Venture capital trust Pembroke has invested £5m in La Bottega, the upscale chain of Italian delicatessens. The investment includes the appointment of a new management team led by Piergiorgia Lo Greco, who will take over as chief executive. Matt Hermer, the owner of the Bumpkin restaurant chain and Boujis nightclub, will become non-executive chairman. The chain, founded by Bepi Augustin and his wife Roberta, aims to expand to 20 sites in the next five years – it currently has sites in Chelsea, Belgravia and Kensington.

Coal Grill and Bar operator reports narrowing losses: Charterhouse Leisure, which is chaired by James Horler and operates Coal Grill and Bar, has reported turnover rose to £8,191,000 in the year to 28 February, up from £8,043,000 the year before. Losses reduced to £189,000 from £303,000. The company owns sites in Wimbledon, Basingstoke, Meadowhall and two sites in Bristol – it surrendered a lease on a site in Guildford due to its under performance. Overall turnover grew by 2% and there was like-for-like sales growth of 5%. Ebitda for the year was £620,000, an increase of 50% on the prior year’s £413,000. Gross profit percentage was 38.96% compared to 37.03%. The company has openings in Milton Keynes and Gloucester lined up and reported it has banking facilities now to open five in total. The company has £1,890,000 of losses than can be used as relief against future profits.

Heineken to invest £13m in pub estate: Heineken is to invest a total of £13m in refurbishments of its 1,300-strong UK pub estate. Trading director Chris Jowsey said the firm had spent £600m acquiring pubs since 2010, including deals to buy sites from Globe Pub Company and Royal Bank of Scotland. “It’s a tough time to run a pub with more and more people spending less time and money in pubs,” he told The Scotsman. “What we need is real investment, innovation and professionalism in the pub sector to attract more customers back to the great British pub. For example, two of the pubs in Bristol that we recently refurbished are now taking more than £20,000 a week as opposed to £3,000 a week before. We usually recover our costs through higher rents – because the pubs are making more money – or through higher beer sales.”

Chameleon Bar and Dining reports profit down: Chameleon Bar and Dining, the north east operator headed by Phil Strong, has reported turnover rose to £4,491,729 on the year to 31 March 2013, up from £4,481,816 the year before. Pre-tax profit declined to £84,242 from £109,721 the year before. The company assigned the lease of one unprofitable site during the year as it moves to focus on “food and accommodation ideally in freehold outlets”. It added: “The company has taken a lease on The Boatyard from Thwaites which is more closely aligned with the strategy of destination food. The company has the capacity to run a slightly bigger estate and will strive to acquire new freeholds and take short leaseholds in order to meet strategic objectives.”

Enterprise Inns hits four-year high: Enterprise Inns hit a four year share price high last week after Numis Securities said the company’s fourth-quarter profit-growth forecast exceeded the broker’s estimate. The stock gained 7.4% to hit 159p at one stage although it has fallen back a little since – but 159p was the highest intraday price since September 2009. The stock has gained 49% this year, valuing the company at £775m. Analysts at Deutsche Bank, Oriel Securities and Barclays also reiterated ‘Buy’ recommendations last week.

Bravo Inns plans first opening in Cheshire: Bravo Inns, led by Ken Buckley and backed by private equity firm Albion Ventures, is to open its first pub in Cheshire next month. The company is investing £150,000 in re-opening The Crown Inn in Maryport’s Senhouse Street as The Thomas Henry – named after Thomas Henry Ismay, the Maryport-born owner of the White Star Line. Mark Dean, operations director at Bravos Inns, said: “We see Maryport as a great opportunity and we are aware the town has a great history to it.” Bravo Inns now owns 33 pubs around the north west of England.

Prezzo opens first site in Leeds: Prezzo is opening its first site in Leeds at The Light entertainment and shopping centre on The Headrow. The £500,000 development, which will create 15 jobs, will have seating for 126 diners including 86 in the restaurant and 40 at the front inside the shopping mall. Chief executive Jonathan Kaye, who founded the chain, has been looking for a suitable site in the city after studying politics at Leeds University between 1996 and 1999. Prezzo will join restaurant chains Browns, La Bottega, Zizzi, Miller & Carter and Cafe Rouge at The Light.

Diageo to invest £15m in innovative spirits makers: Diageo is to invest a total of £15m, through a vehicle called Distill Ventures, in innovative spirits makers in the hope of finding the next break-out brand. Last year, innovation brands accounted for 50% of Diageo’s growth, with products launched in the last five years accounting for £1.5bn of net sales. The plan is to choose five entrepreneurs to receive funding of between £150,000 and £250,000 as seed capital, with investment of up to £2m per brand. Diageo is partnering a business investor called United in the scheme.

RBS strikes deal with Marco Pierre White: The Sunday Telegraph has reported that The Royal Bank of Scotland has struck a deal with Marco Pierre White’s Wheelers of St James’s operation in which the chef is looking after seven coaching inns in the south east that have fallen into the bank’s global restructuring group. RBS said it is trying to be “innovative with our assets” and that the coaching inns, which include The Carnarvon Arms in Highclere, Berkshire, have been “given a new lease of life” through the deal.

Brewdog to introduce a share-trading facility on website: Scottish brewer and retailer Brewdog, which is currently raising a further £4m of equity, is to introduce a share-trading facility on its website in 2015 to allow investors to buy and sell shares. Founders James Watt and Martin Dickie have told The Sunday Telegraph that a public listing might be an option further down the line. Watt also reported that he felt Brewdog’s 20 bars in the UK would be the right total number – enough to be accessible without being ubiquitous.

Carlsberg launches pub sport support package: Carlsberg UK has launched a live sports support package, Premier Sports Club, aimed at helping on-trade customers take advantage of the upcoming Premier League season and England World Cup qualifiers. It has 1,500 members already signed up. Membership of Premier Sports Club gives on-trade customers access to a range of support tools and branded promotional content for key sports events – including Premier League and England matches – across the season, which will drive footfall and rate of sale for members. Premier Sports Club packs are distributed to members on a monthly basis and position on-trade customers’ businesses as the best place to enjoy live sports.

Costa told free drinks plan in Southwold would be “unfair”: Costa Coffee has been denied permission to hand out free samples in Southwold, Suffolk amid concerns the promotion would be “inappropriate” and “unfair” to other businesses. Costa Coffee approached Waveney District Council seeking approval to bring its Ice Cold Tour van to Gun Hill on the seafront, where it planned to give away iced coffee drinks. Sue Allen and Michael Ladd, who are both district and town councillors, opposed the request when they were consulted by Waveney’s events team and the application was refused.

Bed and Bars introduces on-line check-in: Pan-European hostel provider Beds and Bars, which operates St Christopher’s Inns hostels across Europe, has launched an innovative online check-in service for its guests as part of a three-year technology investment programme. Not only does the new service allow guests to check-in online, it also allows for payment in local currency and the addition of services, and products to a reservation. It can, for example, be used to add a cooked breakfast, a burger or a beer to a booking. It has been developed by digital and communications director Duncan Robertson, who said: “The service will transform the customer experience and add instant value to the business”. Adding: “I’m proud that we, as a hostel business, have perfected the technology to facilitate online check-ins. This is a piece of technology that large hotel groups have been wrestling with for years.” The move comes as the hostel and hotel reservation market is going through a period of huge change and increased customer expectation. Robertson added: “We’ve been working hard to make sure our customers have the very best experience – from the moment they book, to the moment they check-out. This new system is the final piece of that jigsaw. The 100% mobile friendly online check-in is very much in line with the behaviour of our customers. They use mobile technology to interact with us online – more than they use a desktop computer.”

Sankey’s to double up in Tunbridge Wells: Mathew Sankey is to expand by opening The Old Fish Market on The Pantiles in Tunbridge Wells as a Sankey’s ‘champagne and seafood bar’ – after two years of planning delays. The new bar, which is scheduled to open at the end of September, will accommodate around 50 customers with seating both inside and outside. The new champagne bar will complement Sankey’s Seafood Bar and Brasserie on Mount Ephraim and its fishmongers on Vale Road, which is now in its fourth year of trading.

Pop-up pub dedicated to Great British craft beer opens in September: Beer tasting events and education company, The Craft Beer Social Club, is launching a new pop-up pub showcasing a vast selection of the 5,500 plus beers brewed in the UK. The pop-up pub takes place from Friday 20 September to mid-December in the ‘creative and cultural hub of Commercial Road on the City and Shoreditch fringes’. The pop-up pub will open every Friday and Saturday for three months and will only feature beers from England, Scotland, Wales and Northern Ireland. There will be a weekly changing menu of draught and bottled beers including rare, one-off and collaboration brews. In addition to craft beers, the pop-up pub will feature a rota of up-and-coming London chefs and purveyors of street food.

Blacks Burgers doubles up: The restaurant credited with creating Europe’s largest burger is to open in Epsom this month. Blacks Burgers, a family-run restaurant and takeaway, will replace the old Mae Ping Thai restaurant, opposite Epsom station, on Waterloo Road, on 20 August. The restaurant, which currently has its only branch in Purley, is famous for The Beast - 6lb 10oz of beef, nine rashers of bacon, nine slices of cheese, three tomatoes, lettuce, three 30cm diameter slices of bread, 1lb of chips and a milkshake, which customers can sign up to attempt to eat, alone, or in a group of four.

Village pub is saved by £300,000 government loan: A village pub has reopened after the parish council secured a £300,000 government loan. The Dolphin in Bishampton, previously owned by Enterprise Inns, went on the market in March for that sum. Villagers asked Bishampton and Throckmorton Parish Council if it was possible for the community to buy the pub. The pub reopened last week under the new landlord, Lee Jones, after 30 volunteers worked to clean it up. Jones will pay the council rent in order for the loan to be repaid to the Public Works Loan Board, a government body that lends money to local authorities.

JD Wetherspoon and St Austell “open” to the idea of allowing toilets to be used by the general public: JD Wetherspoon and St Austell have indicated they are open to the idea of allowing toilets at their pubs in Newquay to be used by the general public, allowing the local authority to save money. The two companies run four of the large pubs in the town centre, The Central Inn, The Fort Inn, The Cribbar and The Towan Blystra. The scheme would see businesses such as pubs and cafes given cash by Newquay Town Council to help pay for the maintenance of the facilities and mean existing public toilets could be sold or closed for part – or all – of the day. James Staughton, managing director of St Austell Brewery, said he was ‘open-minded to a community toilet scheme in Newquay’. He added: “Having been approached initially by the authority, we have requested further details on how the scheme might work. Once we are in receipt of all the information we will then be able to give it our full consideration.” Wetherspoon spokesman Eddie Gershon said: “We would be happy to meet the council to discuss their initiative. It’s important that businesses and the council co-operate and this seems a sensible idea.”

Operators in Stirling object to Greene King bid for “nightclub hours”: Councillors in Stirling have delayed a decision over whether or not to grant extra hours to a Greene King pub in Stirling – after objections on the basis of the threat to the city’s “genuine” nightclubs. Greene King, owners of The Corn Exchange pub, in Corn Exchange Road, applied to Stirling Licensing Board for a change in core opening hours which would allow the site to stay open to 1am on a Thursday and 2am on Fridays and Saturdays. Speaking for both Attractions Inns, who own Stirling’s Dusk nightclub, and the Fubar’s Castle Leisure, who objected to the application, Alistair MacDonald said: “The licence policy in Stirling – I think in common with every other city – is that there is a differential between pubs and clubs of two hours, and the reason for that is clear – to protect the commercial viability of nightclubs. If pubs are open for the same hours without a change of hours for nightclubs, then the market for nightclubs will clearly deteriorate. What may be a very small increase in business for Corn Exchange – one extra hour a night over three nights – could destroy Stirling’s two genuine nightclubs. It is as simple as that.”

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