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Morning Briefing Strap Line
Fri 8th Nov 2013 - Orchid, Just Falafel, London restaurants, McDonald's, TGI Friday's

Story of the Day:

Orchid - Pizza Kitchen & Bar could be expanded to 800 sites; we’re staying independent: Orchid Pub Company’s Pizza Kitchen Bar concept, which has been described as a “genre-buster” for the way it combines a high quality pizza offer and sports bar, could be expanded to 800 sites, chief executive Rufus Hall told the Propel Multi Club Conference yesterday. The Pizza Kitchen & Bar (PKB) concept has added theatre and new customers to wet-led venues, according to Hall. “We promote the fact we use 100% fresh dough pizza and this appeals to women and families in particular,” he said. He explained that pizza is “high-margin peasant food, essentially it is just flour and water. It is simple, it goes with sport and it’s a concept that really works”. PKB works in a range of locations with differing demographics, he said. PKB sites have seen an average investment of £160,000 with average sales increasing by 33% year-on-year with a 29% Return on Investment. A further 19 sites are scheduled for conversion to the brand in 2014. Orchid is also investing in its All Inns family dining concept, with 11 completed schemes leading to an average 23% year-on-year sales increase and Return on Investment of 35%. Next year it will invest in 21 further sites. Hall also told the conference he had a message for readers of The Sunday Times: “We’re not going to be part of the Spirit Group - we’re going to remain proudly independent.” 

Industry News:

Top chefs moving out of West End, says Harden’s: The West End is rapidly losing its status as the heart of London’s restaurant world, with increasing numbers of top chefs choosing to open their restaurants away from the W1 postcode, according to the latest edition of Harden’s London Restaurants. Only one of the year’s top ten “most significant” openings listed in the guide, published yesterday, was in the capital’s traditional fine dining centre, down from seven last year. The others were still in central London, but in lesser areas such as Kings Cross, Bayswater and London Bridge. Richard Harden, the guide’s co-editor, said the trend was driven by multi-billion-pound regeneration schemes bringing new economic life to previously run down areas that would previously struggle to support top restaurants. He said: “As large developments spring up all around London’s historical centre, and the city develops many economic centres, in the manner of Tokyo or Shanghai, the quality restaurant scene is becoming much more geographically extensive and diffuse than ever before.” The guide lists 125 openings in the past 12 months slightly down on the previous year. There were only 56 closures, the lowest number since 2000, making net openings of 69, just below the all-time high of 75 recorded in 2006. But Harden said the quality of openings was as high as it has ever been. Michel Roux Jr’s Le Gavroche in Mayfair was nominated for “Best Meal of the Year” more times than any other restaurant by the survey’s 9,000 contributors, the first time it has won the accolade. Gordon Ramsay’s flagship restaurant in Royal Hospital Road fell out of the top ten for the first time since 1997, appearing instead at number three for “most disappointing cooking”. Chez Bruce in Wandsworth was named “London’s Favourite Restaurant” for the ninth year in succession, while the Oxo Tower Restaurant was nominated most for “most disappointing” cooking.

Better Rates for Pubs campaign seeks MPs’ backing: Campaigners for better rates for pubs has written to MPs asking them to sign the Early Day Motion 599 from the Conservative Party MP Charlotte Leslie. The EDM calls on the government to support the British Beer and Pub Association and Camra’s Better Rates for Pubs campaign to extend small business rate relief for pubs beyond April 2014, to promote the take-up of rural rate relief for pubs and to review the revaluation process for pub business rates to ensure that the valuation accurately reflects the pub’s actual turnover. Brigid Simmonds, chief executive of the BBPA, said: “In last year’s budget campaign we united, we sought the support of MPs and then we delivered a real benefit for the industry. We can do this again for Business Rates and this is the next step in efforts to campaign for Better Rates for Pubs. I encourage local publicans to contact their MP, urging them to show their support by signing EDM 599. This can done with help from the BBPA website,”

Finance opportunities ‘plentiful’ in US: Financing opportunities have become plentiful in the US food service sector, as the numbers of lenders interested in working with restaurants, including regional banks, subsidiaries of foreign banks and institutional investors, has increased dramatically, according to speakers at the 24th annual Restaurant Finance and Development Conference in Las Vegas this week. Bob Bielinski, managing director of the financial management and investment banking firm CIT Group, based in Chicago, said: “Lenders have a lot of money to put to work.” The conference also heard that the restaurant industry has shifted from a three-daypart operation to six, with mid-morning and mid-afternoon snack as well as late night rounding out the traditional breakfast, lunch and dinner peaks. As a result, Starbucks and Dunkin Donuts represented about 1% of industry market share ten years ago, but now they capture about 5% to 6%, in part because their success with blurring dayparts.

Company News:

Karen Forrester – Brighton opening of TGI Friday’s will let us push the boundaries further: TGI Friday’s chief executive Karen Forrester has told Propel that a planned TGI Friday’s in Brighton’s Laines area next year, in a former Post Office building, will allow the company to push the boundaries with the brand. She said: “By nature of its location it gives us a chance to push the boundaries even further – it will be a bit more sophisticated, a bit more bohemian, a bit more eclectic. We are going to develop the social sharing platform further, more tapas, more sharing food, even more sophisticated cocktails and grills.” Forrester revealed that open kitchens are now a standard feature of new TGI Friday’s openings. However, the most recent opening in Norwich featured a fully open kitchen. She said: “It’s literally fully open on four sides, where the chefs can actually hand food out to our guests. The front window actually looks into the kitchen, so as guests are walking into our restaurants they can stop and look at chefs preparing their food.” TGI Friday’s will open a total of eight sites in 2014 and six or seven the following year.

Blackpool Walkabout takes £70,000 net in three days after re-opening: The new Walkabout in Blackpool took £70,000 net in the first three days after it re-opened last week following a major fire, Intertain chief executive John Leslie told yesterday’s Propel Multi Club Conference. Refurbished sites performed better in the late-night day-part but a new and better quality menu had added up to a £7,000 week to takings. Leslie also revealed the company has received £5.5m from the sale of the Shepherd’s Bush walkabout recently.

Geof Collyer – Wetherspoon results were the latest chapter in the saga of continually variable margin: Deutsche Bank leisure analyst Geof Collyer has described this week’s Wetherspoon First Quarter results as another chapter in a saga of continually variable margin. He said: “Following the mid September commentary that margins should stabilise, JDW has stated that margins are likely to be circa 35bps lower in financial year 2014 (and maybe FY’15E). That could it make six years in a row of declining margins after the relative stability of 2006-2010. Whatever the reasons for the drop, this could be a structural lowering since most of the additional cost is related to food, which has lower gross and net margins. We do expect sales and profits to flow through from the later food serving initiative (up to 11pm like restaurants), but the margins could be permanently rebased downwards. The trouble with JDW is that you just never know. The bulls will likely point to any sales growth however achieved as being good, whilst to us, JDW is yet again chasing sales at the expense of margin, with little if any underlying profit growth. Following today’s downgrade, JDW is expensive relative to its retail peers. We believe there is better value in Greene King (Buy, 827p); we also prefer M&B (Hold, 400.2p).”

Tea 42 ‘to be chain of 20’: Blue Rainbow Aparthotels has announced that it wants its new Tea 42 “alternative tearoom experience” outlet in Manchester city centre, due to open this month, to be the first of a chain of 20. Blue Rainbow, which runs four and five-star serviced aparthotels in Manchester and Edinburgh, has appointed Martin Small to the role of head chef after four years as head chef at the National Trust’s Lyme Park in Disley, while John Russell has been appointed general manager. Will Hannah, managing director at Blue Rainbow Aparthotels and Tea 42, said: “We’ve created something really special with Tea 42 and we’re looking for employees who reflect the brand’s ethos and personality. We welcome Martin and John to the Tea 42 team, both of whom have extensive experience within the hospitality industry, and will play a vital role in spearheading the success of our first Tea 42 site.”

Just Falafel to open flagship site in Fulham: Just Falafel, the largest falafel restaurant chain in the world, is opening its first full company-owned site on Fulham Broadway in West London next month. The new flagship branch will be the sixth site to open in the London this year, after openings in Monmouth Street, Covent Garden; Baker Street, Marylebone; Hammersmith; Charing Cross; and East Croydon. The 1,600 sq ft, 36-seat restaurant, will be directly next to a branch of the organic foods supermarket chain Whole Foods Market which is due to open in spring 2014. Michael Biggins, chief executive of Just Falafel UK and Ireland, said: “Because this site is company-owned, it will give us the flexibility to experiment with the menu and overall offering. We’re confident that customers will love the new look and we look forward to welcoming them over the next few months.” The Fulham Broadway branch will offer falafel wraps, sides, soups, salads and drinks, plus a new breakfast range which is currently rolling out to all restaurants. Just Falafel opened its first store in Abu Dhabi, in the UAE, in 2007, and now has 36 operating stores, 50 locations under development and 1,200 franchises sold in 19 countries. It plans to roll out 200 outlets in the UK over the next five years.

BrewDog raised crowdfunding limit to maximum: Scottish brewer and bar owner BrewDog has increased the limit set for its crowdfunding scheme, Equity for Punks, to “keep up with demand for shares”. The brewery, which originally set out to raise £4m in six months, is now looking to raise a further £250,000 from selling another 2,600 shares at £95 each. The £4.25m it is now looking to raise is the maximum value of equity allowed to be sold through a scheme like this. James Watt, the company’s co-founder, said: “Equity for Punks has smashed all our expectations already. We now have over 12,000 shareholders, with more joining the ranks every day. We’ve already broken every equity crowdfunding record and with this extension we are pushing things right up to the limit. The extra funds mean we can create more insane beers, open more epic bars and spread the craft beer revolution even further in 2014 and beyond.” BrewDog has so far raised almost £7m through what it calls “fanvestors” buying shares in the business during three rounds of its “Equity for Punks” fundraising. The extra funds raised will help boost the expansion of BrewDog’s bar division in the UK and abroad, as well as pay for the setting-up of a series of bottle shops across the UK. BrewDog has achieved average annual growth of 167% over the past five years and is already valued at over three times the value it was given during the last Equity for Punks scheme in 2011.

McDonald’s ponders 3D printing Happy Meal toys: McDonald’s IT services director has told an audience in Germany that the company could consider bringing 3D printing to its restaurants to produce Happy Meal toys on the spot. Mark Fabes, speaking at the Fujitsu Forum in Germany, said: “As we know, you don’t always get every toy in a set. So how about as part of a value exchange or as a reward to give the ability to reprint a toy in the restaurant?” Fabes added that this was “just a thought” at the moment. But he did reveal that McDonald’s was testing in-restaurant use of tablet devices as well as touchscreen food-ordering kiosks. However, he said: “We’ve got to make sure they’re always available. If a customer comes in to use one for the first time and it doesn’t work, they don’t bother again. It’s incredibly important we get our infrastructure right.” Fabes also said that “Big Data analytics” was still posing problems for McDonald’s. While it was easily able to track sales of individual items around the world in real time, gaining customer insight has proven to be more difficult because many customers still used cash, therefore leaving no trail of information as to their buying habits. Fabes told the forum that McDonald’s was also looking at technologies such as machine-to-machine (M2M) communication and the Internet of Things; kitchen equipment such as fryers and fridges could eventually become part of what he called the “integrated restaurant”, communicating with one another in order to balance power consumption when one appliance is using a lot of energy.

Derelict Little Chef site to become ‘gateway to Snowdonia’: The site of a former Little Chef restaurant that closed six years ago is to be turned into a cafe, farm shop and tourism information centre that developers hope will be a “gateway to Snowdonia”. The Little Chef near Puffin roundabout on the A55 in Penmaenmawr, Conwy, North Wales, closed in January 2007, and has been an eyesore with metal shutters over the windows. It will be transformed in a £225,000 project run by the owners of the Glasfryn Parc activity and adventure centre near Pwllheli, who hope to have the site open by next spring. They have been backed with £75,000 from the Welsh Government’s Economic Growth Fund. Glasfryn Park’s owner, Jonathan Williams-Ellis, said: “We see this site as an entrance point to Snowdonia. We will bring a farm shop and cafe and also a tourism centre where people can get information about the area. This is the last stop directly on the A55 before Holyhead and we think it will be popular. We think it is win-win for the area, it will create jobs and we also hope to use local produce where we can so it offers another place for suppliers to sell from.”

Star Pub & Bars invests £3m in living accommodation and key repairs: Star Pubs & Bars is investing £3 million in the living accommodation and key repairs at 110 pubs being taken on by new lessees during 2013. On average £27,000 is being invested at each pub, of which £20,000 is typically being spent on ensuring the lessee’s private accommodation is in good condition, including installing new kitchens and bathrooms where necessary. Said Star Pubs & Bars property and strategy director Chris Moore: “We understand that taking on a pub is a big commitment and there is a lot to do in the first few weeks to establish the business from getting the offer right and organising marketing to recruiting and training staff. We want to ensure our lessees can focus their energies on these critical business areas rather than spending time worrying about pub repairs or getting their living accommodation into order and we are prioritising investment to this end.”

Premier Inn hotel to replace Staffordshire pub: Whitbread is converting the former Talbot Inn in Leek into a £4.5 million, 60-bedroom Premier Inn hotel and restaurant, which is due to open in March. The new hotel is being delivered via a partnership of Staffordshire Moorland District Council, Staffordshire County Council and Whitbread. The hotel will create 30 new jobs, and Whitbread has a corporate target for 50% of the new roles at hotel and restaurant sites to be taken by those in long-term unemployment or not in employment, education or training (NEETs).

Second upgrade in two years for Yorkshire brewer: Ilkley Brewery, which was founded in 2009, has increased its capacity for the second time in two years with the installation of a new 50-barrel (80 hectolitre) fermenting vessel at its home in West Yorkshire. The new plant will enable the brewery to increase capacity by a third, to 9,000 barrels a year. The latest investment comes after UK sales rose 20% on this time last year. Next month the brewery will send its second shipment of beer to the United States, and it is also exporting its Holy Cow, a cranberry milk stout, to Sweden.

New-look Harry Ramsden’s in line for awards: The refurbished Harry Ramsden’s restaurant in Bournemouth, which became the world’s largest fish and chip restaurant after a £1m refurbishment increased its capacity from 235 to 417, is in the running for two awards locally. It is a finalist in the Restaurant of the Year category at the annual Bournemouth Tourism Awards, and has also been shortlisted for the title of Bournemouth’s Favourite Business. The award winners will be announced at a ceremony in the town’s O2 Academy on 21 November. Joe Teixeira, Harry Ramsden’s chief executive, said: “We are delighted to be finalists in this year’s awards and this underpins our belief that our restaurant in Bournemouth is a true showcase for Harry Ramsden’s as we move the brand forward.”

Doctor and lawyer open African-themed grillhouse: A GP and a former trainee lawyer are opening an African-themed coffee and grill house in High Wycombe, Buckinghamshire. Umar Mirza and Dr Adnan Ali, his partner in the new outlet, G’rillers in White Hart Street, said the restaurant takes its inspiration from African, with specially sourced African coffee beans, spices and ingredients to flavour drinks, steaks and burgers. Mirza, 26, said: “I was actually training to be a lawyer but we always wanted to do something with food, so we decided to try and come up with something exciting and fresh to the town centre. It’s all African-inspired. Africa is the birthplace of coffee so we’ve searched high and low for the best beans and we are aiming to make the best coffee in Wycombe. The food comes from all over Africa, so we have soup dishes from the west, salads with couscous from the north and the grill is from the south. We decided on White Hart Street because this used to be the main avenue through Wycombe and we want to bring that back, and liven up the place again. We hope others will follow our lead.”

Pret opens sixth Manchester outlet: Pret a Manger is opening its sixth shop in Manchester today (November 8), on Oxford Street in the city centre. Meanwhile, the Pret Christmas menu arrives in shops on 12 November, including Pret’s Christmas Lunch Sandwich and Pret’s Nut Roast Sandwich. New additions also include as Pret Turkey & Celeriac Salad.

Restaurants, bars and cafes feature in £60m Wigan masterplan: A £60m masterplan for Wigan town centre involving the remodelling of The Galleries shopping centre and the creation of a new leisure hub with a multi-screen cinema, gym, restaurants, bars and cafes has been unveiled. The development, which has the proposed name of the Makinson Quarter, will be privately funded and would take five years to complete. Adrian Oliver of the developer Vale Retail said: “This development will make Wigan a great place to shop thereby widening the town’s catchment, keeping shoppers shopping here rather than migrating to out of town retail parks and the internet. The leisure hub, incorporating a multi-screen cinema, gym, restaurants, bars and cafes will attract more people into the town centre and help build a night-time economy.” David Molyneux, deputy leader of Wigan Council, said: “This is a tremendous vote of confidence in Wigan Borough. Here we have a private company wanting to invest a huge sum of money in our town during a challenging time for the economy. It’s fantastic news and demonstrates again the massive potential of this area. At the moment, the town centre is coping comparatively well with the tough economic climate and changing retail habits. But we’ve got to move forward. I think if this scheme goes ahead, Wigan would be the best retail destination in the north west outside of the major cities.” A planning application is expected to be submitted in December.

“Fashionably British” brasserie set for Selfridges Birmingham: Searcys, the restaurant and bar operator, is opening a “fashionably British” bar and brasserie on the fourth floor of the Selfridges store in Birmingham. The new eaterie, to be called The Balcony, is billed as serving food and drinks with a “playful twist” in a “stylish and contemporary environment”. Service is due to start on November 23, and The Balcony will be open every day from 10am through to 10pm serving dishes including fish and chips, chorizo hash browns and chicken and waffles. The brasserie will also offer an extensive Champagne list, “skinny cocktails”, afternoon tea and seasonal treats including plant pot cakes, edible flower cocktails, and Brussels sprout tapas. The menu has been devised by Arnaud Stevens, the executive chef for Searcys, who grew up in Birmingham. Stevens said: “We are so pleased to become a part of what is one of the most iconic buildings in the country. Selfridges is known for its cutting-edge, bold and stylish personality, and The Balcony will very much aim to reflect this.” Earlier this year, Searcys was appointed to manage Birmingham’s new Rep Bar. Its other outlets include the St Pancras Grand Brasserie and a private members club at the top of the Gherkin, the skyscraper in St Mary Axe, in the City of London.

White Rose food court trebles in size: A £7m expansion of the food court at the White Rose Shopping Centre in Leeds that will see it treble in size to 21,000 sq ft is bringing in Frankie & Benny’s, Prezzo, Wok ’n’ Go and the Handmade Burger Co. They will join Nando’s, McDonald’s, Costa Coffee and Bagel Nash in the centre’s upper level food court. Harlan Pollitt, portfolio manager for the shopping centre’s landlord, Land Securities, said: “Customer feedback indicated the need to improve our food and beverage offer and we believe the customer journey and experience will be enhanced with this expansion. The food court redevelopment will add momentum to the high calibre of retailers that are launching with in the scheme and it will cement White Rose’s position as a fashion and leisure destination. In no time at all we’re going to be the proud owners of a larger food court which I know all our shoppers will enjoy and appreciate.” Work is set to be completed by early spring 2014 and is being headed by Morgan Sindall. Recently Land Securities submitted a planning application to Leeds Council for a multi-screen cinema, four additional new catering outlets and additional retail space at the centre, including extensions to the existing Debenhams and Primark stores. A planning decision is expected by the end of the year.

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