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Wed 11th Sep 2013 - Bramwell, Pret, McDonald's, Ed Martin and August sales

Story of the day:

Pubs and restaurants see sales up 1.9% in August; pubs do better with 2.5% sales growth: Britain’s pub and restaurant groups saw collective like-for-like sales grow 1.9% in August compared to the same month last year, according to latest figures from the Coffer Peach Business Tracker. “The good summer weather and the effect of last year’s London Olympics have continued to be the main factors influencing summer trading patterns,” said Peter Martin of CGA Peach, the business intelligence specialist that produces the Tracker, the sector’s most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS. “The hot weather continued to help sales in pubs in particular during August, as it did in July, but the Olympics effect was different. Last year, London’s eating and drinking-out market suffered a lull in the run-up to the Games, while outside of the capital saw flat sales during the August event, in contrast to London’s sales boost. So this year, London enjoyed a bounce-back in July, while the rest of the country saw its recovery come last month,” Martin said. The 27 groups contributing to the Tracker saw collective like-for-like sales grow 2.4% outside London this August compared to last year, while like-for-likes inside the M25 were up a more modest 0.7%. “Within those figures, pub groups recorded like-for-likes up 2.5%, with almost equally strong trading both inside and outside London, while casual dining restaurant groups saw just 0.3% growth,” Martin said. “Interestingly, although people were generally choosing pubs over restaurants during the hot weather, they weren’t going just for the beer but to eat, too. Food sales growth in pubs was actually four times higher than drinks growth over the month,” Martin said. Total sales for the sector grew 5.1% in August, reflecting the continued roll-out of new sites, particularly from casual dining chains, and to a lesser extent pub restaurants, outside of London. “But, despite the welcome boost the summer has brought, year-on-year sales for the 12 months up to the end of August were running at just 0.9% up for the sector, the same as at the end of July,” Martin said. David Coffer, chairman of The Coffer Group, said: “To see like-for-likes outside of London outstripping those within the M25 is extremely encouraging. While the figures may still be warped by the effect of the Olympics, they would suggests that the positivity we have already seen emerging in the capital is now filtering out to the rest of the country. This may, however, be in part due to the increased number of families opting for a ‘staycation’ holiday and it will be interesting to see whether the trend continues as we move into the autumn.”

Industry news:

Rufus Hall to present at the next Propel Multi Club Conference: Rufus Hall, chief executive of Orchid Pub Company, will be presenting at the next Propel Multi Club Conference. He will be talking about the company’s genre-busting Pizza Kitchen Bar concept, which combines pizzeria and sports bar. He will also explain how the company is evolving its All Inns family offer. Operators can book two free places by e-mailing The event takes place on Thursday 7 November at One Moorgate Place, London.

Zagat – London dining scene passed Paris eight to ten years ago: The Zagat restaurant guide has claimed that the London restaurant scene passed Paris eight to ten years ago – and is catching up on New York. London restaurant-goers enjoyed a record 3.7 meals out a week this year, a dramatic rise from 2.2 in 2012, Zagat said. If takeaways and home deliveries are included, only half the 14 lunches and dinners eaten a week are now prepared in kitchens at home. The average meal out in London cost £37.35 a head this year, a 14% fall on the £43.40 paid two years ago. That makes London still a more expensive place to eat out than New York, where the average bill is $48.56 (£31) but the gap is closing. Tim Zagat, co-founder of the Zagat restaurant guides, said: “There are more younger people looking for good food, but not in places with fancy decor and linen tablecloths. Eating out has become almost like eating in another room in a house, people are looking for a good meal but not looking to dress up.” The biggest gripes among restaurant goers were revealed as slow service, inattentive staff and rude staff. The survey also revealed that more than half of all bookings are made on line for the first time.

ETM Group founder invests in fast-track drinks app: ETM Group’s founder, Ed Martin, and Caffe Nero co-founder Paul Ettinger are among the investors in a new mobile wallet application that helps impatient drinkers skip queues in pubs and other crowded venues. The investors are together taking a 10% stake in the company through the tax-efficient Seed Enterprise Investment Scheme. They declined to say how much they paid. Tim Bichara, founder and chief executive of Q App, said the company had already signed up venues including the South Bank Centre in London and Nimax Theatres to use its technology. “Our vision is to remove queueing from busy venues,” he said. The app enables people to order food and drinks from their mobile phone, and then collect the refreshments from a dedicated fast-track lane or have them delivered to their table.

London leasehold pub premiums climb 20% in the last three months: Davis Coffer Lyons has reported a bounce in the London pub market in the last three months. Paul Tallentyre, of the property agent, said: “We now regularly experience competitive multiple bidding for a wide range of opportunities. Leasehold premiums on pubs in the Capital have climbed by over 20% in the last three months. We are even experiencing unprecedented interest in closed units, generating premiums on sites that, in some cases, haven’t been operational for over a year. So who is driving this market? We have seen a marked increase in the number of first time operators who, having learnt the pub trade working on the operations side, now have the confidence to make the investment in their own establishment. Often they have private financial backing and can now take the plunge with a degree of certainty that their backers will see a return. Established operators too have realised the opportunities the market presents. Some are keen to build a brand’s popularity or add to an existing portfolio in a rising market. Others are looking to dispose of less profitable units or ones that don’t correlate with the company’s wider strategy.”

Minister – nightclubs and bars are using strippergram loophole: Jeremy Browne, the Liberal Democrat Home Office minister, has claimed that nightclubs and bars are using a legal loophole to host lap-dancing events without having a licence. Browne claimed venues are using an exemption intended to allow one-off events such as hiring a “strippergram” for a birthday party. His comments came after Liberal Democrat MP Stephen Gilbert reported that venues in Newquay are using the exemption to stage lap-dancing nights on an occasional basis in “direct competition to licensed venues”.

Company news:

Pret A Manger revenue up 14%, hot food hits 18% of all sales: Pret A Manger saw its UK sales increase 14% to £360m in the year ended 3 January this year and Ebitda rise 15% to £57.4m, according to accounts filed at Companies House. It opened 19 new sites to hit a total of 249. For the first time, the company raised more than £1m for homeless charities with 5p donations for every sandwich and baguette sold at Christmas. The introduction of a refreshed range of soups and a hot breakfast roll saw hot food sales hit 18% of all sales. The company said it plans more openings in 2013 than achieved in 2012 with shops “adapted to the needs of regional towns”. It said: “We also continue to refurbish our existing estate with fresh design ideas.” A total of 50 shops were updated last year with new, lighter design and a number of sites have been extended with more seats. A total of 2.5 million sandwiches were distributed to homeless charities last year.

UK and Europe lead the way in McDonald’s August sales growth: McDonald’s has reported like-for-likes rose 1.9% in August, with Europe leading the way with a 3.3% sales lift. In the US sales were up 0.2% and in Asia/Pacific, Middle East and Africa (APMEA) down 0.5%. McDonald’s chief executive, Don Thompson, said: “Ensuring that each of our strategies resonates with our customers is the key to our performance, today and for the long term. We remain confident in the fundamental strength of the McDonald’s system and our ability to connect with customers and deliver the menu choices, value and convenience they expect from McDonald’s.” In August, US like-for-like sales were up 0.2%, reflecting the popularity of the Monopoly promotion dampened by the persistently challenging environment. The US business is intent on enhancing results by strengthening its value leadership and featuring relevant new product offerings across all dayparts and price tiers. In Europe, August’s comparable sales increased 3.3% as positive performance in the UK, France and Russia was slightly offset by negative results in Germany. Europe’s results benefited from the introduction of blended-ice beverages in the UK, strong premium food events in the UK and Russia and emphasis on core products in France. Given Europe’s tepid economic environment, McDonald’s is taking a “holistic approach to building demand with a combination of reinvigorated value platforms and compelling limited-time menu choices served in contemporary surroundings”, it said.

Young’s plans burger shack on terrace behind Tooting pub: London pub operator Young’s has applied to create a new terrace behind The Castle, in Tooting High Street, South London, to house a new kitchen and burger shack, alfresco dining area and seating booths. Home owners whose properties overlook the beer garden have raised concerns over the potential increase in noise and litter. Wandsworth Council’s licensing committee will make a final decision on September 17.

Orchid named Apprenticeship Newcomer Employer of the Year: Orchid Group has been awarded for its dedication to apprentices by the National Apprentice Awards. The pub company took the Apprenticeship Newcomer Employer of the Year title, sponsored by Investors in People, for the Central Eastern region in recognition of the emphasis it places on apprenticeship schemes. Judges praised Orchid for how well its entry came across and said the pub company was the clear winner. The award acknowledges and celebrates Orchid as an employer that is relatively new to apprenticeships and is committed to using such schemes to develop its workforce. “The really exciting thing is that the category was open to all sectors, so we were not only up against other pub companies but businesses from a variety of industries and many big names,” explains Tracy Read, head of development and communications at Orchid Group. “We have always been proud of our apprentice schemes and are committed to leading the way in staff training and development, and being recognised with such a highly contested award is testament to this.” Orchid will now go through to the national final, which will require an additional application highlighting the next stages in the company’s apprenticeship schemes and how the development programme will continue in the long term.

Molson Coors signs deal with Matthew Clark in Scotland: Molson Coors has struck a partnership with Matthew Clark that will see the specialist drinks wholesaler become its major distributor to independent pubs, clubs, bars and hotels in Scotland. The deal is the first of its kind that Molson Coors has entered into. It is designed to enhance the service provided by the US brewing giant to its free-trade customers north of the Border. Molson Coors, which runs its Scottish sales operation from Livingston, said it saw “high potential” for its brands in Scotland. It said the commercial and distribution strengths of Matthew Clark meant it could provide a service that is better suited to independent traders. A consolidated invoicing system has been set up that will mean customers receive their orders through Bristol-based Matthew Clark. The wholesaler supplies around 16,000 outlets across the UK and offers a standard next day delivery service.

Kornicis opens new West End site: Kornicis, the bar operator led by Nick Tamblyn, has opened a new cocktail bar and kitchen, Kamique, in St Martin’s Lane, Covent Garden, central London. Its signature drink is the classic mojito, served ten ways and Cuban-style, in jam jars. It has a British and East Asian influenced menu serving Pad Thai and green curry, as well as a range of gourmet burgers.

Wyn Ellis – Costa Coffee doing well given warm weather: Numis Securities analyst Wyn Ellis has issued a ‘Hold’ recommendation on Whitbread shares, with a target price of 3100p, in the wake of yesterday’s trading update. He said: “We believe the 3% like-for-like sales growth at Costa is an encouraging performance given that it was the seventh sunniest summer in the UK since 1929. Whitbread says it is on track with its annual plan and for its five-year growth milestones. We are not changing any of our forecasts and leave our recommendation as Hold with an increase in our target price from £29 to £31.”

Marston’s Pictish-themed pub to open in November: Marston’s Inns has announced an opening date of November 11 for its fourth outlet in Scotland, the Dunnichen Stone pub on the Orchardbank Business Park in Forfar. The venue is named after a stone discovered nearby in the 19th century that had been carved with mysterious symbols by the ancient Picts, who lived in the area 1,400 years ago, and the interior of the pub is decorated with Pictish themes. It will feed up to 180 diners, with a rotisserie and “classic” pub dishes. The pub is the second new development at the £2.5m Orchardbank site, home of Angus Council’s headquarters, alongside a McDonald’s restaurant. A KFC is also scheduled to open at the site. The manager for the pub has already been hired and general recruitment is expected to start at the beginning of next week.

Bramwell Pub Company hires sales and marketing manager: Bramwell Pub Company has appointed Derek Avington as head of sales and marketing at the 181-strong pub company. Avington will report to Bramwell’s commercial director, Sarah Weir, and will oversee the marketing team for the food, drink, digital and pre-booked sales functions of the company. Avington joins Bramwell from Red Bull, where his roles encompassed channel manager across different trading segments including on-trade route to market and retail, off trade independent and cash and carry. He had previously worked at Mitchells & Butlers, where he was senior marketing manager working on branded and unbranded formats in the High Street and Local divisions.

Mitchells & Butlers appeals for new properties through Propel: Mitchells & Butlers has appealed for new properties through Propel. The company is looking for new Vintage Inns, Village Pub & Kitchen and Nicholson’s sites. It is looking for a minimum of 4,000 square feet in major city centre locations, edge-of-town and destination country pubs. M&B says that it pays fees to non-retained agents.

Towie star to start work on £4.5m boutique hotel in Southend after securing the lease from Spirit: The former The Only Way Is Essex star Mick Norcross is to begin work on turning the Grand Hotel in Southend into a £4.5m boutique hotel and spa after securing the lease from Spirit Pub Company. Norcross said: “Negotiations over the lease are all done! The lease has been assigned to me and nobody else. It was confirmed on Monday. It’s good news, all the sticking points on the lease have been agreed and we can now move forward.” He has been trying to secure the lease from Spirit for months, and had issues after subsidence was discovered on site. Norcross previously faced problems getting planning permission before a two-storey extension was finally agreed in August 2012. He said the work will take 18 months giving the Grade II-listed building 20 bedrooms and a bridal suite. It will be renamed the Grand Boutique Hotel.

Leisure park plan submitted for Sandbach to include Marston’s pub: Muller Property Group is seeking outline permission for its “Old Mill Quarter”, a 40,000 sq ft supermarket with a petrol station and garden centre, a drive-through KFC diner, a Premier Inn hotel, Starbucks coffee shop and a Marston’s family restaurant and pub on a site off Old Mill Road. The proposed development has received a mixed reception from residents, with some arguing the town needs the site to stimulate its economy and others who believe it will put exiting traders out of business and cause traffic chaos.

Investigation begins after fraudster offers non-existent jobs at Spirit pub: An investigation is under way after a suspected fraudster offered jobseekers non-existent jobs at a Spirit pub in Yarm. Dozens of people may have been the victims of a scam, in which they handed over their personal details after being interviewed and offered bar “jobs”. Those who applied for the jobs, which were advertised through Middlesbrough Jobcentre, were left disappointed and fearing they will become victims of identity theft, after it turned out the jobs never existed and that a claim that the pub, The Union Arms, on the High Street, was being taken over by another company, was false. A spokesman for Spirit Pub Company, which runs the Union Arms, said the company was aware of an individual “who has been misleading the public to believe they are the new owners of The Union Arms”.

Caffe Nero sets up coffee roasting room and farmer’s market format at Heathrow: Caffe Nero is to open three new outlets in Heathrow Airport’s new Terminal 2 building. The company will have two units in arrivals and one airside at the newest terminal, which is officially known as The Queen’s Terminal and which will open in June next year. The biggest of the three cafes will be located in arrivals, and will feature a number of artisanal food products in a farmers’ market format, as well as a coffee roasting room. There will also be specifically designed areas to address different customers’ needs, including family-friendly private booths to a business hub catering for work in transit. As part of Caffe Nero’s national music programme, which supports up-and-coming artists, a stage will be a permanent feature of the cafe from which musicians will perform regularly for visitors. In Terminal 2’s airside satellite, which will overlook the runway, passengers will be buy deli-style food, Italian prosecco, Italian wines and Italian beers. Muriel Zingraff-Shariff, Heathrow’s retail director said: “We set the bar high for retailers wishing to join Terminal 2. Caffe Nero has exceeded our expectations with innovative concepts that put the theatre of coffee and Italian culture at the heart of the experience for passengers.”

Mitchells & Butlers’ O’Neill’s brand to launch four-week beer festival: O’Neill’s, the 49-strong Irish brand owned by Mitchells & Butlers is running a four-week beer and cider Festival between tomorrow (14 September) and 13 October. The Beer and Cider Fest will feature a range of draught and packaged beers and ciders from Ireland, Germany, the UK and US. Exclusives include Smithwick’s Pale Ale from Kilkenny, O’Hara’s Irish Red from Carlow, Rebel Red Keg Ale from Cork and Hornsby’s Cider from the West Coast of the US. A range of cask ales including Hilden Brewery “Number 4” Traditional Session Bitter from Belfast and Copper Dragon Brewery “Golden Pippin” Blonde Ale will also be on tap on several days during the four-week festival in each pub. Customers can pick up a collector card to enjoy a free drink once four stamps are collected and buy a limited edition festival glass for £5 to include a free pint.

Former Paperino’s site on market: The site occupied by one of Glasgow’s best-known restaurants until it collapsed in July has gone on the market at a rent of £150,000 a year. The closure of Paperinos@78, in St Vincent Street, in the city centre, which was opened in 2009 by brothers Stefano and Sandro Giovanazzi was blamed by administrators on “depressed market conditions”, with Brian Milne of the accountancy firm French Duncan saying: “It is clear that, despite the directors’ best efforts, the restaurant has struggled in recent months due to depressed market conditions and intense competition in the local area.” Now, however, property agents are marketing the 4,290 square foot ground-floor and basement premises as part of an area “fast becoming the city centre restaurant hub”, with new leases on adjoining properties taken by Patisserie Valerie, Costa, Las Iguanas and Carluccios. Scott Grindlay, a surveyor at Shepherd Chartered Surveyors, the letting agent, said: “We anticipate keen interest in this property.”

Top takeaway restaurant invests £500,000 in new kitchen: The restaurant voted Britain’s top takeaway is investing half a million pounds on new kitchen facilities that will enable it to produce 4,000 meals a night. Mushtaqs Restaurant in Hamilton, South Lanarkshire, intends hiring up to 50 new staff for the expansion, who will include e-commerce analysts and telephone operators, as well as chefs, kitchen assistants and delivery drivers. The restaurant picked up the award for Best Delivery Restaurant/Takeaway in Britain at the eighth annual British Curry Awards in London last November for its 29-minute delivery service, described as “the clear winner”. Work on the new kitchens, currently out to tender, is expected to start this autumn.

KFC loses planning appeal for failing to meet ‘sustainable development’ rules: An appeal by developers over an application to build a KFC takeaway restaurant on a brownfield site in Essex that has been empty for 20 years has been turned down by a planning inspector for having a poor design that failed to pass rules on sustainable development. Laindon Holdings submitted plans for a 24-hour service drive-through fast-food restaurant on a former hotel site in Laindon, Basildon, at the beginning of last year. The application was twice turned down by Basildon Council because of fears over traffic, noise and litter, and went to a planning inquiry in May. Now the planning inspector has upheld the council’s decision, saying that while the scheme would utilise an area of brownfield land and provide 40 part-time and 15-full-time jobs and a restaurant/takeaway for which there was a need, and the planning framework “contains a presumption in favour of sustainable development and promotes economic growth … the framework states permission should be refused for development of poor design that fails to take opportunities for improving the character and quality of an area and the way it functions.” The inspector said the environmental aspect of sustainable development was the “over-riding factor”, and was “significantly and demonstrably not met” by the plans for a KFC outlet on the site.

TGI Friday’s close in Barbados at a cost of $9.7m: Franchisee Prestige Holdings has closed its TGI Friday’s restaurant in Barbados at a cost of $9.7m. Prestige is a Trinidad and Tobago-headquartered restaurant management company that holds the franchise for KFC, Pizza Hut, TGI Friday’s and Subway in several Caribbean territories. Chairman Christian Mouttet said: “(We) view the decision to close this restaurant positively. We do not expect the impairment provision to affect our dividend policy and payments. This change will have no impact on the other TGI Friday’s Restaurants we operate in the region.”

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