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Morning Briefing for pub, restaurant and food wervice operators

Wed 16th Oct 2013 - September trading, Brewdog, Tesco's Decks and Vince Cable

Story of the day:

Coffer Peach – pub and restaurant like-for-likes sales up 0.4% in September: Britain’s pub and restaurant groups saw sales growth slow in September after a summer of solid trading. Collective like-for-like sales grew just 0.4% compared to the same month last year, according to latest figures from the Coffer Peach Business Tracker. “The good summer weather has been generally good for the eating and drinking market – but September seems to have delivered something of a hangover for the sector. Sales growth last month was the lowest since April,” 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. “Sales particularly suffered during the first two weeks of the month, but saw a recovery in the second half,” he said. Total sales across the 27 companies contributing to the Tracker grew 3.1% during September, reflecting the continued roll-out of new sites, particularly from casual dining chains outside of London. “Nevertheless, branded restaurant chains collectively had the worst of the sales slowdown, with like-for-likes nationally down 1.0% on last September,” added Martin. “The best performance for the month came from London managed pubs, which were up an impressive 3.4% on last year – and which helped the capital overall marginally outperform the rest of the country. The combination of drink and food appears a compelling mix for consumers inside the M25,” he observed. The longer-term trend shows that the market remains just positive, with year-on-year like-for-likes for the 12 months up to the end of September running at just 0.7% up on the previous 12 months. Total sales growth is running at 4.1% up. Mark Sheehan, managing director of Coffer Corporate Leisure, said: “While like-for-like sales in September were only marginally up, this followed a summer of excellent weather and great growth for the eating and drinking out sector. It is also important to note that September 2012 saw relatively strong trading after the Olympic summer and thus was a pretty robust comparable. The outlook remains excellent and we have been experiencing our strongest level of transactions since 2008.”

Industry News:

Vince Cable – the tied model is not the main source of pub closures: Business Secretary Vince Cable has argued that the tied pub model is not the main source of pub closures. Speaking at the end of an adjournment debate called by the MP and pubco critic Greg Mulholland, Cable said: “I should stress that the tied business model, as opposed to abuses of it in recent years, is probably not the main source of the problems in the industry. I am not sure how far (Mulholland) agrees with that, but the number of pubs has been declining for three decades at least – there were 70,000 in 1980 and there are 50,000 today. Neither the 1989 beer orders nor the pub company consolidation, which is the source of the problems he describes, brought about a major change in the rate of decline. There have been bigger and deeper problems in the commercial property market, in which over-leverage was a common feature.”

Luke Johnson – my new think tank will stand up for entrepreneurs: Sector investor Luke Johnson has launched the Centre for Entrepreneurs, a new think tank that will stand up for entrepreneurs. He said: “Entrepreneurship drives sustainable economic growth. And it represents a basket of positive values including thrift, honesty, determination, resilience, collaboration, appreciation of risk, and the reward of endeavour. Yet government, the media and big business, despite all claiming to support entrepreneurs, can undermine entrepreneurship through unhelpful legislation, image stereotyping and monopolistic behaviour. We believe this is partly due to under-representation of entrepreneurs in the public eye, which the centre aims to address. Our goals are to both defend entrepreneurs from such attacks, and to positively promote entrepreneurship to government, media, the private sector, including big businesses, and the general public.” The think-tank will engage in advocacy; promoting entrepreneurship in the media and with government; research and campaigns, especially initiatives that improve the public perception of entrepreneurs as well as encouraging more people to become entrepreneurs; thought-leadership; generating white papers, pamphlets, events and articles aimed at the defence and promotion of entrepreneurs; and providing guidance and support for entrepreneurs. 

Heston Blumenthal – London has overtaken New York: Chef Heston Blumenthal has argued that London has overtaken New York as the most exciting city for dining. He told Bloomberg: “London has just exploded. The New York scene started to grow first, in the 1970s. It was more cosmopolitan. We were more old-fashioned, with pomp and ladies’ menus without prices, things like that. People couldn’t relax. Things got going in London in the 1980s, with the Roux brothers and chefs like Pierre Koffmann, Nico Ladenis and Marco Pierre White, but it was all very French. Because London had the later start, now we have the momentum, and geographically we are connected to more countries. Things have changed massively. London has pipped New York.”

Sbarro to trial new pizza concept with artisanal products: Sbarro is to trial a new restaurant concept this month in Columbus, Ohio, this month showcasing a variety of thin-crust Neapolitan pizzas. Sbarro, a chain of quick-service Italian eateries located primarily in shopping malls and airports, has revamped its recipes in the past year as it moves into the fast-casual segment. Sbarro began overhauling its 1,000 restaurants in the US and around the world after emerging from bankruptcy in November 2011. The new concept, Pizza Cucinova, offers nine speciality pizzas as well as the option for customers to select their own ingredients, such as roast sirloin, sopressata, fresh mozzarella and shiitake mushrooms, all sourced locally or imported from Italy. The menu also features upmarket salads, with ingredients such as roasted red and yellow beets, prosciutto and crusty bread.

Manchester nightclub will test the quality of drugs seized on site: A nightclub in Greater Manchester is beginning a project to examine the quality of seized drugs. The Warehouse Project in Trafford (TWP) said confiscated drugs would be tested within minutes at a laboratory on site. The aim of the project, which TWP says has Home Office backing, is to check for tainted drugs and then warn clubbers via Twitter if any are found. A 30-year-old man died last month after falling ill at the club. Fifteen others needed hospital treatment.

Eating out market to benefit from ageing UK population: The ageing UK population will have a positive impact on the eating out market, a report by the Foodservice Consultants Society International and Allegra Strategies has found. The report, called Taste of the Future 2020, which surveyed more than 100 UK foodservice consultants, predicted that the frequency of eating out would be significantly higher by 2020. However, consumer quality expectations will rise and new areas of demand and growth are expected to open up as niche cuisines and unique dining experiences become more popular.

More than a million customers Starbucks sign “come together” petition in first day: More than a million Starbucks customers and employees signed petitions in the coffeehouse operator’s first day of an effort to pressure the nation’s lawmakers to end the two-week government shutdown and debt-ceiling impasse, the company said. Starbucks founder last week and invited customers and employees to sign a petition at Starbucks’ 11,000 US locations and online. The company has dubbed the effort “Come Together”.

Domino’s Pizza reports strong global sales growth: Domino’s Pizza yesterday reported US like-for-like sales growth of 5.4% in its third quarter. The international division also saw like-for-like growth of 5.0% during the quarter, marking the 79th consecutive quarter of international like-for-like sales growth. The company had global net store growth of 126 stores in the third quarter of 2013. Chief executive J. Patrick Doyle said: “Domino’s Pizza is connecting with customers everywhere through technology, quality, convenience and value. We continue to hold a leading presence in the restaurant category as a brand with solid momentum both in the US and around the world, with dedicated franchisees who are focused on great pizzas, strong customer service and consistent operations.”

Company News: 

Tesco’s Decks launches to mixed reviews on TripAdvisor: The first Tesco’s Decks carvery restaurant in Coventry has received decidedly mixed reviews on TripAdvisor since launching, with 17 reviews average a 2.5 score. The venue has three “excellent” score and seven “terrible” ratings. One reviewer, headlining a review, “chaotic, no system”, wrote: “My family decided to try Decks rather than our usual Sunday carvery restaurant. What a mistake. We arrived and stood in a queue than only moved because people left or wandered off looking for service. After finally getting to the front, we flagged down a waitress and asked what should we do. We were told she’s just cleaning tables, once they’re done we can take a seat. We decided to walk over and sit down. After another ten minutes of being ignored we flagged the waitress down again and she said she’d be back. After five minutes we decided to walk. Upon getting up another waitress came over and asked us if we’d like to order drinks. I explained we’ve waited nearly 30 minutes – we’ve had enough and left. I really feel sorry for the older people there who were clearly too sensitive to chase the waitresses and sat or stood for ages not knowing what to do.” The restaurant, which is open for breakfast at 7am and serves food until 10pm, offers a breakfast deck, a carvery deck and a pastry deck. The restaurant promotes itself as offering “real” and “wholesome” British food.

Wetherspoon launches “US meets UK” real ale festival: JD Wetherspoon launches a two-week beer festival today (16 October) that features 40 ales from the UK and ten guest brews from US craft ale brewers. The company said: “Each of the 50 ales brewed for the festival will demonstrate the quality of brewing and diversity of tastes which ale can offer. The ten visiting craft brewers from the USA are sure to attract a lot of attention, but, equally, the core of the festival remains the best of British, with regional brewers from all over the country.” Beers are available to try in one-third pint glasses. A 40-page magazine has been produced that contains tasting notes.

Harvester introduces £9.99 meal deal: Mitchells & Butlers’ Harvester brand, which serves just under 30 million meals a year, has introduced a £9.99 meal deal that includes a choice of six main meals, unlimited salad, an ice cream sundae and a limitless self-fill soft drink. A children’s’ version is priced at £6. Promotional materials tell customers they can “feed a family of four for under £32”.

East Grinstead nightclub owner applies for second site: Nalbant Leisure, headed by Hassan Hassan, has applied to open a second nightclub in East Grinstead, Sussex. An application for a premises licence to include alcohol and entertainment at 6 Whitehall Parade in the town centre was granted, despite strong objections from the town council and local residents. Nalbant Leisure also owns the town’s other nightclub – Poison IV – and The Crow’s Nest pub, both in Little King Street.

Basilico bids for ninth outlet: Basilico, the high-end pizza takeaway operator with eight outlets in London, including Lavender Hill, Crouch End, Fulham Road, Canary Wharf, Islington, and Tower Hill, has applied to open a takeaway in Central Parade, Surbiton, South West London. The venue is only yards from a PizzaExpress restaurant. A previous planning application was turned down in March because of concerns about the design of the proposed shopfront, and of a vent for smoke from the wood-burning pizza oven. At the time, Kingston Council officers said: “Subject to a condition to prevent fan noise and odour it is noted that there would be no adverse impact to surrounding neighbours.”

Tokyo Industries sells Lincoln site to local operator: Tokyo Industries, the 23-strong nightclub operator led by Aaron Mellor, has sold its Lincoln site to a local operator, Darren Smith. Contractual obligations require the nightclub to be branded as Tokyo for 12 months but the new owners have indicated this will change at the end of this period.

Brewdog to hold collab-fest beer festival this weekend: Scottish brewer and retailer Brewdog will “the biggest collaborative beer festival the world has ever seen” this weekend. The company said: “On 19 October all of our bars will be tapping 12 new never-before-seen beers. All 12 of these beers are the result of our awesome bar teams buddying up with one of their local breweries. Each bar will also be hosting a meet-the-brewer event on the 19th with their Collab-Fest partner brewery. Over 130 taps across 11 venues will showcase 12 brand new beers.”

Dunkin’ Donuts hires marketing agency ahead of second attempt to crack UK market: Dunkin’ Donuts has appointed Nexus/H as its lead marketing and creative agency ahead of its second attempt to break into the UK market. The US doughnut and coffee chain unveiled a deal last month to open 150 restaurants in the UK over the next five years in an attempt to take on competitors such as Krispy Kreme. The company pulled out of the UK in the mid-1990s. Nexus/H will lead Dunkin’ Donuts’ marketing in the UK, with an emphasis on digital, social and in-store activity. The brand’s first integrated campaign will launch in November.

Coast to Coast to make London debut next month: Coast to Coast, the Restaurant Group growth brand, will make its London debut next month when it opens at the London Wembley Designer Outlet. The brand opened its seventh site in the Riverside Leisure Park in Norwich last month and will open in Bolton later this month. The original site in Brighton Marina averages four out of five on TripAdvisor with 156 of 298 reviews rating it as excellent, with a mark of five. 

Funding gap filled for expanding brewery: Jarrow Brewery has been handed an £80,000 funding line by the Yorkshire-based lender Reward Capital to help out after it opened a £500,000 new brewery. The 40-barrel new plant, which expands capacity fivefold, makes Jarrow, which was founded in 2002, the largest independent brewer on Tyneside. The company had secured £140,000 through the government-backed Regional Growth Fund to expand its operations and create local jobs. Jess McConnell, who founded the brewery with his wife Alison, said Jarrow had received private investment to open the new brewery, and was looking to launch a share issue to raise further funds, but “Reward’s funding has been vital to progress the brewery as we awaited the investment funds to be approved.” The new brewery, on the Bede Industrial Estate in Jarrow, Tyne & Wear, will enable the company to launch internationally and increase its bottling operation. Jarrow currently runs four pubs of its own.

Spirit to rebuild Fayre and Square pub destroyed in fire: Spirit Pub Company is looking to rebuild one of the pubs in its Fayre and Square chain destroyed in a fire two months ago. The Hartford Mill, at Hartford Marina, near Huntingdon, was gutted after an electrical fault started a fire in the roof of the building in the early hours of the morning. Spirit said: “We are currently in the process of demolishing the remaining unsafe structure of the Hartford Mill. Dependent on planning permission, we are looking to start rebuilding the pub in the new year with the hope of having the pub reopen for the summer.” Fifty firefighters fought the blaze, using eight fire appliances, but were unable to save the pub and its adjoining restaurant. Fortunately none of the seven people in the building when the fire started was hurt.

Property agent Fleurets launches new website: Property agent Fleurets has launched a new website designed to make it easier for clients to match their property requirements and access a wide range of ‘business critical’ information. Simon Hall, director and head of pubs at Fleurets, said: “Marketing has changed so much in recent years. In 2006, we introduced the ‘Buyer Alert’ system, which triggers an email to inform the user that a new property matching their requirements had come to market. In 2007, 322,000 email alerts were sent to applicants. This system has proven to be so successful that in 2012 over 6 million buyer alerts were sent. As recently as 2011, 8% of purchasers opened our Buyer Alerts on a mobile or tablet. Now in 2013 this has increased to 40% and is still rising – hence the need for this investment in our technology. We’re confident that this new site will facilitate greater user numbers. It will improve the level of information we can offer our customers and the ease by which they can access it.”

O’Neill’s chain launches loyalty scheme with Commitments show prize: Mitchells & Butlers’ 49-strong O’Neill’s Irish bar brand has linked up with the new West End show The Commitments in a year-long partnership. O’Neill’s has introduced a loyalty scheme that gives customers the chance to earn tickets to an exclusive performance of the show at the Palace Theatre in London. In order to be eligible for the free pair of tickets, O’Neill’s customers must visit any O’Neill’s (excluding the pubs in Scotland) five times between 7 October and 8 December 2013 and buy a main course and a drink each time. Once all five visits have been completed the verified receipts must be sent off to claim the tickets. Every customer that sees the show can hand over their ticket post-performance in any O’Neill’s and score themselves a free drink.

Prezzo and Nando’s close to opening doors in Trowbridge: The 3,020 sq ft Nando’s unit at the St Stephen’s Place leisure park in Trowbridge, Wiltshire has been handed over for fit-out and is due to open in early November. At the same time the 4,384 sq ft Prezzo unit in the development is now being fitted out, with a planned opening date of mid-November. The complex’s Odeon cinema is due to open on 25 October, while the 80-bed Premier Inn is reaching the final stages of fit-out and should open in late November. The occupants of four more restaurants planned for St Stephen’s Place have still to be announced by the site’s developer, Legal & General Property. Savills and Alder King are the letting agents. Tim Russell, senior asset manager at Legal & General Property, said: “St Stephen’s Place Leisure Park is now beginning to be revealed in its full glory. We are excited about Odeon opening its doors on and we look forward to launching the other key elements over the following weeks.”

Revolution vodka bar operator Inventive adds non-vodka cocktails: Inventive Leisure, the leading national premium bar operator, has created a new premium cocktail menu for its Revolution bars and is now the only high street bar chain to use egg whites in its cocktails. This will be the first time the business has diversified away from vodka-based cocktails, with the new menu featuring recipes using a multitude of spirits and liqueurs. The menu includes classic and popular recipes, the use of bespoke ingredients and a strong emphasis on delivering on flavour. It has been greatly extended from an original offering of 18 to 33. It forms part of the company’s Evolution scheme, a ten-month project focused on creating one of the most premium service environments in the UK bar industry. The cocktail menu was developed by Revolution’s dedicated in-house development team, which constantly monitors market trends, brands and products to create drinks specifically crafted to appeal to its up-market customer base. Customers will be treated to cocktails that use beer and cider as a base, together with unique ingredients created exclusively for Revolution, such as a raspberry and basil syrup. Chief executive Mark McQuater said: “Revolution has long been renowned for its vodka cocktails. We wanted to build on this heritage, by utilising our cocktail skills to produce an enhanced new menu that features old favourites, popular classics, but also exciting, innovative new recipe ideas, without losing the essence of what Revolution is famed for. The quality of these cocktails has greatly improved across the entire menu. We’ve used premium ingredients, many of which have been created exclusively for us, and also invested heavily in staff training and equipment to ensure the serve and appearance of the drinks is the very best it can be for our customers. It’s an exciting progression of our previous offering and really sets us apart from our competitors.”

Le Pain Quotidien ramps up Wi-Fi offer: Le Pain Quotidien is installing a new Wi-Fi service in its 69 bakery-cafes in the US, after growing dissatisfaction with its previous Wi-Fi set-up. Cezary Moroz, IT director for Le Pain Quotidien in the US, said: “We understand how our customers work, live and play as well as the role that wireless technology has in their lives. As a result, we have found that providing fast and reliable Wi-Fi has both a direct and indirect impact in increasing revenue.” The Wi-Fi system the chain was using was unstable, often requiring staff to reset the system as more users tried to connect, and could not be centrally managed. In addition, “interference, coverage and reliable connectivity were also becoming real issues for us,” Moroz said. The chain is now installing a Wi-Fi system from Ruckus Wireless of California which will support its in-store epos systems as well as provide customers with Wi-Fi and enable LPQ to run analytics on Wi-Fi usage. Moroz said: “Given the unprecedented use of smart mobile devices within nearly every facet of our society, we view Wi-Fi not only as a competitive necessity but more importantly as a strategic utility that can be used in a myriad of ways to improve the operation of our business.” LPQ runs 185 bakery-cafes in 17 countries, including the UK.

McDonald’s wins award for compassion towards pigs: McDonald’s is to receive a Compassion in World Farming (CiWF) Good Sow Commendation for its support of the welfare needs of sows in its supply chain, after the company adopted the RSPCA’s Freedom Food standards for pork. The move meant McDonald’s met Compassion in World Farming’s Good Sow Commendation criteria for breeding pigs. The award will be presented at the charity’s Good Farm Animal Welfare Awards, hosted by BBC Radio 4 food journalist Sheila Dillon, on 30 October in Paris. Joy Clachan from McDonald’s said: “This is just the latest step by McDonald’s to provide our customers with responsibly sourced food while demonstrating continuous improvement in farm animal welfare across our entire supply chain. It is fantastic that Compassion is awarding us a Good Sow Commendation in recognition of our commitment to improve the welfare of breeding sows.” Tracey Jones, director of food business at CiWF, said: “By bringing higher-welfare eggs and pork onto the high street at an affordable price, McDonald’s are leading the way, aligning the quality and sourcing of its ingredients with consumers’ changing preferences and expectations.” Such activity, Dr Jones said, can build a company’s reputation, increases brand loyalty and demonstrates transparency. 

Five restaurants planned for Oldham Town Hall: A contract has been awarded for the transformation of the Old Town Hall in Oldham into a six-screen cinema with five restaurants, cafes and other leisure outlets. Construction company Morgan Sindall won the contract from a shortlist of six. Initial pre-construction and enabling work to the shell and core of the building has already begun, with the main work starting in the spring. Oldham Council leader Jim McMahon told the Oldham Evening Chronicle: “Today marks the start of the physical work that will see this amazing building returned to use. The Old Town Hall is a fantastic regeneration project – rescuing an important and historic building that was at risk of being lost forever and using it to spark economic growth and provide the amenities we need. Our vision was backed by English Heritage and the public, whose consultation responses showed they share our passion to make this happen. The work starting from today will restore the Old Town Hall as a symbol of civic pride and give Oldham the cinema and family entertainment venue it deserves.” Barry Roberts, area director for Morgan Sindall, said: “This is an exciting and ambitious project to be a part of and we’re looking forward to getting started. It’s encouraging to see the Old Town Hall being brought back into use through this inventive, resourceful scheme.” The town hall was built in 1841 but has been closed since the mid-1990s.

Brakspear to sell The Crown at Nuffield: The pub company Brakspear is to sell the Crown at Nuffield in Oxfordshire. Its licensees, Richard Grant and Sam Murray have taken the keys to the Reformation in nearby Gallowstree Common. Brakspear chief executive Tom Davies said, “Richard and Sam did a great job at the Crown and it’s sadly a sign of the times that the pub was still unable to provide sufficient returns. Closing a pub is always a last resort for us, but that’s our only option with the Crown, which is now for sale. We’re delighted that we were able to relocate Richard and Sam to the Reformation and wish them every success there. We will be offering them as much support as they need to turn it into a thriving business.”

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