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Mon 27th Jan 2014 - Propel Monday News Briefing

Story of the Day:

Horizons – eating our frequency back in line with 2010 levels: The QuickBite survey of consumers by insights firm Horizons has found that Britain’s eating out market is recovering in terms of frequency, with the percentage of people eating out on the increase, and currently at the same level as it was in 2010. Over two-thirds (69%) of respondents had eaten out in the previous two weeks with those that had eaten out doing so an average of 1.8 times. The number of people eating out has risen from 68% to 69% year-on-year. “This is good news for the UK’s foodservice sector,” said Horizons’ director of services Nicola Knight. “We should now start to see an increase in the frequency with which consumers are eating out as the economy picks up, along with a gradual increase in average spend. Real growth will be slow, but is likely to be steady over the next 18 months.” Pub restaurants continue to be the type of establishment visited by most respondents, with 22% of those who had eaten out in the previous two weeks eating in a pub restaurant most recently, an increase of 2% year-on-year. While the use of takeaways and delivery outlets remains relatively static, pizza and pasta outlets have fallen back slightly year-on-year (9% versus 10%) as have eat-in fast food outlets (5% versus 8%). Cafes (including coffee shops) have grown in popularity as eating out destinations, with 6% of respondents eating out in a cafe or coffee shop, compared with 4% in December 2012. Average spend across all outlets (including drinks) now stands at £14.41, up from £13.30 in July 2013. The survey, conducted online by YouGov, has shown that signs of recovery in Britain’s eating out market are being accompanied by concerns over food quality, the sourcing and provenance of ingredients and health and lifestyle factors. These issues are influencing where consumers choose to eat out. When asked about their choice of venue or choice of menu item, 41% of respondents to the biannual QuickBite survey said they were influenced by at least one of the health eating factors listed such as the availability of vegetarian options (15%), calorie information (14%), reduced fat choices (9%) and the availability of low-carb dishes (4%). The 35-44 year olds and 18-24 year olds were the most likely to seek these lifestyle choices (44%), with women (47%) more concerned with health and lifestyle factors than men (43%). Knowing the origin and provenance of main ingredients was found to be important to 56% of respondents, compared with 42% who didn’t think food provenance was important.

Industry News:

Karen Forrester to present at the first Propel Multi Club Conference of 2014: The first Propel Multi Club Conference of 2014, to be held on Thursday 13 March at the Lancaster London Hotel, Lancaster Gate, central London, is now open for bookings. Karen Forrester, chief executive of TGI Friday’s, will examine the importance of staff recognition as a motivational force in her business. Multi site pub, restaurant and foodservice companies can claim up to two free places each. E-mail jo.charity@propelinfo.com to reserve places.

EIS investment in sector soars: Enterprise Investment Scheme (EIS) investments in the sector have increased by 61% over the past year with companies raising £114m from individual investors, The Times reports. Gary Robins, a partner at Chancery Investment Partners, said: “With British food and British chefs international reputations improving dramatically in recent years, coupled with the rise of successful midmarket chains, investment in restaurants is now seen as more rewarding.” Investors regard sector investments as an interesting play on economic recovery and rising consumer spending, he added. 

Crowdcube makes strong start to 2014: Crowd-funding website Crowdcube has reported a strong start to 2014. Founder Luke Lang said: “We’ve had seven businesses funded so far this year. In the last week we’ve had £506,150 invested and we’ve now raised a total of £17,716,540 for 93 businesses with two pitches currently overfunding their original targets.” 

Off Licence News – Greene King drove off-trade ale growth over Christmas: Off Licence News (OLN) has reported that the ale category outperformed the total beer category over Christmas, with sales growth of over £6 million in the 12 weeks to 4 January. Ale now accounts for 15% of total beer sales, but made up almost 30% of the market’s £21m growth over the period. Greene King accounted for 63% of the growth. Neil Jardine, retail sales director at Greene King, told OLN: “It feels like ale has come of age – again – and is coming back in terms of importance to the beer category to the levels we saw 20-30 years ago, when ale dominated the beer market. We are coming from a lower base but its importance to beer has increased significantly.” Ale saw strong volume and value growth – a continuation of a trend that began in 2010.

Campaigners seek “asset of community value” status for under-threat Hampstead pub: Campaigners are seeking to keep open The Old White Bear in Hampstead, sold by Punch Taverns to Braaid Ventures for £1,575,000 before Christmas, by having it listed as an “asset of community value”. The Old White Bear has attracted the support of nearly 4,000 people, with about 3,700 signing two petitions to keep it as a pub and 200 more writing to Camden Council. Braaid Ventures wants to turn the building into a luxury six-bedroom house.

Peer suggests Lords restaurant chefs should train at high street restaurant brands: An unnamed but disgruntled peer has e-mailed catering bosses at the House of Lords to complain about the quality of food in the Barry Room, one of the restaurants subsidised by taxpayer to the tune of £7m a year. In his e-mail, published in The Daily Express, he suggested the chefs visit the high street chains for some cookery lessons. He said: “I had the mushroom ‘roll’. It was not a good idea. I do suggest the chef is sent to PizzaExpress, or ASK, or Prezzo, or Zizzi and Café Rouge. They serve mushrooms in a creamy sauce on a bread or pizza base 100 times better than the Barry Room fayre.”

Premier League seeks to close pub sports loophole: The Premier League is trying to close a loophole that allows pubs and clubs to show live matches via foreign satellite broadcasts. The Premier League wants an amendment to the Intellectual Property Act, currently making its way through Parliament, that would scrap a section of the Copyright, Designs and Patents Act that means venues that do not charge customers to enter their premises can show broadcasts of video recordings without a licence from the copyright holder.

Company News:

InnBrighton acquires seventh London site – the original Jongleurs venue in Battersea: InnBrighton, the regional pub operator lead by Gary Pettet and Gavin George and backed by Graphite Capital, has acquired the leasehold of a pub in South London previously known as The Battersea Mess and Music Hall. This adds a seventh London site to the 45-strong estate of pubs that the company operates in the Brighton and London areas. Chairman Gary Pettet, who negotiated the acquisition on behalf of InnBrighton, said: “This is a prestige site in a great location so we are very pleased to have been able to negotiate a new agreement on good commercial terms. I believe the strength of our covenant and the investment we have made in our London estate have been helpful in securing this and other recent acquisitions.” Chief executive Gavin George added: “The possibilities for the development of this site are very exciting, given its size and layout. The area known as the Music Hall was the original home of Jongleurs in the 1980s so deserves a scheme with the creativity and originality necessary to bring back an operation with a similar cultural impact.” InnBrighton recently acquired and renovated the former Redback Tavern in Acton, re-launching it as The Aeronaut, complete with a circus tent, brewery and carnivalesque garden. Michael Penfold, of agent AG&G, which acted for the landlord, said: “Battersea Mess and Music Hall is a sizeable property located in an area where InnBrighton’s target demographic is prevalent. The landlord was impressed with the company’s vision for the site and with its understanding of the local market.”

Starbucks is to boost its mobile offer in 2014: Starbucks is to ramp up its mobile offering in 2014 to combat the “seismic shift” affecting the industry through ecommerce. It is increasing investment across its “My Starbucks Rewards” scheme and adding mobile and social marketing initiatives. The business experimented with personalised promotions over the holiday period that included geo-targeted offers. Howard Schultz, chief executive of Starbucks, said: “We have a full pipeline of new technological innovations to be introduced in the quarters ahead that will fully leverage (our) assets and provide us with even greater benefits into the future. We are just beginning to appreciate the full magnitude and possibilities of the Starbucks mobile payment platform opportunity. Holiday 2013 was the first in which many traditional bricks and mortar retailers experienced in-store foot traffic give way to online shopping in a major way. Customers researched, compared prices and then bought the brands and items they wanted online, frequently using a mobile device to do so.”

Novus reviews future of Aberdeen Tiger Tiger: London-based bar and restaurant operator Novus Leisure is reviewing the future of its Tiger Tiger site in Aberdeen, which opened around a decade ago. A spokesman said they were consulting with staff and “looking into the future viability of the venue”. A spokesman said: “We are undertaking a consultation to assess the future of our venue in Aberdeen.”

Knife & Fork Food takes fourth pub – Enterprise Inns site: Cardiff-based Knife & Food Fork has taken its fourth pub – a six-week £175,000 refurbishment of The Discovery pub in Cyncoed is underway and due to complete by early March. The pub will create 20 jobs when it opens its doors. Sean Murphy, managing director of Knife & Fork Food, said: “As a brand we have ambitious expansion plans and we aim to open at least one new venue every year for the next five years.” The company currently employs 75 people at venues in Cardiff Bay, Llantwit Major and Penarth alongside an outside catering arm.

Tragus in talks to restructure debt: Café Rouge operator Tragus is in discussions to restructure its debt less than two years after the last restructure, The Times has reported. Private equity group Blackstone, which acquired Tragus in 2006, is in talks over a deal that would give Apollo Global Management a significant equity stake in the business. In the last refinance, its syndicate of lenders, led by Barclays, agreed to cut its bank debt from £240m to £219m while Blackstone converted £14m of second lien debt into equity.

Wagamama to open in former Slug & Lettuce site in Aylesbury next month: Wagamama is to open a new site in Aylesbury on 12 February, converting at former Slug & Lettuce site by the Odeon cinema. It will neighbour chicken restaurant Nando’s, which is also expected to open in February. Meanwhile, new tenants are being sought for the site of Bandidos restaurant in Kingsbury after landlord Stan James repossessed the unit. Ian Blackburn, a Stan James director, said Bandidos, which opened in 2011, had not been paying its rent.

Costa Coffee opens first site in Kerala, India: Costa Coffee has opened its first site in the Kerala area of India – and its 119th in the country. Chief executive Costa Coffee India, Santosh Unni, said the brand is looking at opening 300 outlets in India by 2015-16. The company was the first international coffee chain to set up business in India in September 2005 partnering with Devyani International Ltd (DIL), which has a large footprint in the retail food and beverage in the country. “We are just scratching the surface, the opportunity in India is huge,” said Judd Williams, director, Middle East, India and South East Asia, Costa Coffee.

Orchid sells Master Locksmith: Orchid Pub Company has sold The Master Locksmith, at the Meteor Retail Park in Derby. Paul Kotrys, the firm’s property director, said: “The Master Locksmith was not viable as a pub business hence Orchid’s decision to sell it. The new owners took over on 17 January.” Orchid said that due to “contractual obligations” it was not able to disclose who the new owners were or their plans for the site. The pub was one of 290 bought by Orchid in 2006 from Punch Taverns for £571 million.

McDonald’s – we need better marketing and menu relevance: McDonald’s chief executive Don Thompson said that the fast-food chain has lost relevance with some customers and needs to improve its menu offerings and provide better value. On Thursday, McDonald’s reported flat sales and earnings for its fourth quarter. Like-for-like sales slipped 0.1% – marking a second quarterly decline in 2013 – weighed down in part by a steeper-than-expected 3.8% drop during December in the US. Franchisees and executives have suggested previously that the company’s more complicated menu – after years of adding items to suit broader tastes – has slowed service and turned off customers, while failing to attract lots of new business. Thompson said 2013 was a challenging year and that while he expects improvement in 2014, January is shaping up as another sluggish month, with like-for-like sales likely to be flat. “The key is going to really be to re-establish the trust of customers,” Thompson told investors on a conference call. “That means basic execution at a restaurant level, marketing engagement at a much stronger level and also to make sure that our menu is relevant.”

Smashburger considers strategic options: Better burger brand Smashburger, which is looking to expand to the UK, is exploring strategic options, including a possible sale or initial public offering, as it continues its quest to become a national US fast-casual player, said new chief executive Scott Crane, who was formerly president of Smashburger and became chief executive in November after his predecessor Dave Prokupek departed without explanation. Crane joined the company six and a half years ago when Smashburger opened its second location and has a background in operations.

Greene King’s Hungry Horse brand turns 20: Greene King’s Hungry Horse brand, which operates more than 200 sites, turns 20 this week – and is offering customers a free drink. The company’s website states: “We’re turning 20 this month and we’d love you to come and celebrate with us to wash away those winter blues. Join us between Friday 31 January and Sunday 2 February for a free drink and raise a glass to all the great times we’ve shared!” 

Rekorderlig agency secures ‘substantial’ working capital facility to support growth: Chilli Marketing, the fast-growing Manchester-based drinks agency with the exclusive contract to distribute Rekorderlig cider, has secured a ‘substantial’ working capital facility from Barclays to support its growth plans. It was founded in 2004 and has seen dramatic recent growth, with turnover rising from £3m in 2011 and set to top £100m this year. Chilli Marketing has the exclusive distribution rights for the Swedish cider brand Rekorderlig globally and also manages other brands in the UK including Abro Lager, Cusquena lager and Saint lager. The company operates in the UK, Spain, Switzerland, Australia, New Zealand, the United States, Canada, South America, South Africa and China. The enhanced facility, for an undisclosed amount, was arranged by the North West corporate banking team at Barclays. Gareth Whittle, joint owner at Chilli Marketing, said: “Chilli Marketing has grown significantly over the last few years. The team at Barclays shares our enthusiasm, understands our business and is keen to support our future growth plans as we expand into more territories overseas.”

Pub freehold has asking prices slashed by £100,000: The freehold of the White Hart, Catsfield, East Sussex, on the market through Christie + Co, has been reduced in price from £595,000 to £495,000 for a quick sale. The agent stated: “This very attractive pub is located on the main road through the centre of the village of Catsfield, just 2.5 miles from the historic village of Battle. It has a 50 cover restaurant, bar, generous beer garden (circa 80+), owners’ accommodation, plus two rooms that are currently used for letting and a detached holiday cottage. It has got to be sold quickly.”

Bianco43 to open fourth site: Bianco43, the Italian restaurant group offering authentic speciality pizzas and regional dishes inspired by the “flavours, colour and cultural diversity of the Neapolitan region of Italy”, is to launch its fourth London location, close to Trafalgar Square. Bianco43 sources selected ingredients directly from specific regions of their homeland – co-owners are Massimo Parodi and Fabrizio Margarita.

Plymouth restaurant family acquire prime site: A new restaurant is to be opened in Plymouth’s £4 million King Point Marina by well-known local multi-site restaurateurs, the Hajiyianni family. Sutton Harbour Holdings has let the first floor space at the Millbay docks building, which was opened last October, on a 15-year, £30,000 per annum, lease to the family who already have numerous sites in Plymouth. The business dynasty, started by the late Steve Hajiyianni and his wife Persefoni, is now into its third generation. Among city businesses the family run are the Mission Bar and Restaurant, Morgans Italian restaurant and the New Continental Hotel. The 2,012 sq ft restaurant marina restaurant is due to open in early spring 2014, following a ten-week fit out to transform the space into a modern 90-cover, bistro-style diner. A spokesman for the Hajiyianni family said: “We are delighted to have acquired such a unique position at King Point Marina.”

Admiral Taverns pub to be auctioned this evening with £100,000 guide price: An Admiral Taverns site, The Newtown Hotel in Fenton, Staffordshire, will go under the hammer tonight with a starting price of £100,000. The City Road property closed in September last year but the property is expected to attract developers, with auctioneers suggesting it could be transformed into a restaurant, flats or even student accommodation, given its close proximity to Staffordshire University. The auction, run by Butters John Bee, will be held tonight from 6.30pm at The Moathouse Hotel.

Elliotts picks up three PR contracts: Hospitality marketing and communications company Elliotts have started 2014 by securing three new PR account wins, including the contract for Bedfordshire’s only Michelin-starred restaurant, Paris House. Elliotts also won pitches for Call Systems Technology, as well as Lincolnshire-based brewery Batemans. The news follows a successful 12 months for Elliotts, in which the agency has been appointed by motorway service area giant Welcome Break, Virgin Wines, SSP, Mitchells and Butlers and the Michelin-starred Smiths of Smithfield.

Eamonn Holmes clashes with Wetherspoon’s Eddie Gershon over motorway pub: Sky News presenter Eamonn Holmes called JD Wetherspoon’s spokesman Edward Gershon the ‘devil in disguise’ in an interview on the opening of the company’s M40 pub at Beaconsfield last week. Disputing Gershon’s claims that most of the pub’s customers will come in for food, Holmes said that a pub would change a ‘perfectly nice’ motorway services into something not very welcoming. When Gershon said there was no problem for people travelling in coaches to come in for a drink, Holmes said the reality was that the majority of coaches would be full of revellers from stag or hen parties, or football supporters. “One coach will pull in with a load of football fans, then a second coach will pull in with rival fans. What will happen then? You’re putting temptation in people’s way. You’re the devil in disguise – aren’t you? You’re offering a scenario of hell – are you not?” he said.

Alcohol free bar and restaurant opens in Nottingham: The East Midlands’ first alcohol-free bar and restaurant has been launched in Nottingham. Located on Friar Lane in the city centre, Sobar will open its doors to the public today (Monday 27 January) Sobar will be open for breakfast, lunch and dinner as well as providing a full calendar of evening entertainment showcasing local artists and musicians. Serving locally supplied coffee, artisan pizzas and a wide range of soft drinks including fruit juices, vintage cordials and non-alcoholic mocktails, the bar will provide a safe, vibrant family atmosphere. The project is the work of Double Impact, the Nottingham-based drug and alcohol charity, after it received a grant of £340,419 from the Big Lottery fund.

Soho nightclub stripped of its licence: A Soho nightclub where a man was fatally shot in the early hours of Boxing Day has been stripped of its licence. Westminster Council said they made the decision to revoke the Avalon Club’s licence after police provided evidence of “numerous and far-reaching failures” on the night Hassan Isman Omer, 31, was murdered. Councillor Audrey Lewis, Westminster’s licensing chief, said: “The police investigation into what happened on the night makes clear that there were numerous and far-reaching failures by the management in upholding the conditions of their licence.” She said the club, next door to the Queen’s Theatre, which has hosted Les Misérables since 2004, “should not even have been open” at the time of the shooting.

Greene King sells ‘large’ community pub in Bury St Edmunds pub: Greene King has sold The Priors Inn community pub in Bury St Edmunds. The pub has been sold to Havebury Housing Partnership, whose chief executive Karen Mayhew, said: “I can confirm that we have purchased The Priors Inn from Greene King and we understand that the neighbourhood will be upset by its loss. Havebury is committed to providing homes to meet the needs of the community and our discussions about how best to redevelop the site are still in the very early stages. Once we have something drawn up we will share our plans with local residents.” Resident Kevin Gaught said: “I think that anyone in the cold light of day could see that The Priors Inn (sited on one of the largest plots of land of any public house in Bury) was clearly too large for the regular trade it enjoyed (a regular trade that many of the other pubs in the town envied) and was ripe for development.”

Nando’s to open in Taunton: Nando’s will open a site in Taunton on 5 February. Graham Love, Taunton town centre manager, said: “We are a county town and we need both strong independents and national brands. Nando’s brand is very popular with young people as well as older people too and the firm has shown great confidence to take out a 20-year lease in the heart of the town centre which is really good news.”

David Doctorow departs Whole Foods Market UK: Whole Food Market’s second most senior executive David Doctorow has stepped down from the board. Doctorow, VP of purchasing and distribution, joined the UK business, which currently has eight sites, in 2007. Executive co-ordinator of purchasing and distribution Michael Weber has replaced him as a director. 

Pubs to receive Official Charts Company jukeboxes: 250 Official Charts Company branded jukeboxes will be shipped into pubs and bars across the UK over the next 12 months. They will all come loaded with Top 40 singles and all tracks on Top ten albums – and be emblazoned with the chart company’s livery. The jukeboxes are being manufactured by Soundnet/Sound Leisure and distributed and operated by Gamestec. The three companies announced the tie-up during an event at the 02. The deal represents Soundnet’s single largest order for ten years.

Marston’s, McDonald’s and Costa lined up for Monmouth site: Monmouth Town Council has received a planning application that would see a Marston’s pub, a McDonald’s restaurant and a Costa coffee shop, plus a Pets At Home store, built on land at one of the main entrances to the town. A report by planners DPP UK on behalf of the developer Avenbury Ventures said the proposal to regenerate a long-standing vacant site between New Dixton Road and the A40 “represents a major opportunity for a sensitively-designed commercial scheme which will provide much-needed employment opportunities for local people.” In addition, it said, the scheme will “assist in remedying an existing deficiency by meeting the refreshment needs of passing motorists.” The proposal, which would create 142 jobs, has split the town, with rival Facebook pages attracting more than 1,200 people who support the scheme, with almost 900 saying they were against it. Opponents to the scheme have now created a campaign called the Gateway to Wales Action Group.

Luxury hotel company sets up division to develop restaurant brands: Dubai-based luxury hotelier Jumeirah Group, operator of the luxury Burj al Arab hotel, has launched a new division to develop new restaurant and bar brands which it claimed will be “highly innovative, desirable, market-driven” restaurants and bars. The new division will be called Jumeirah RnB and plans to develop restaurant brands that may be operated within its hotels in the UAE and globally, but which can also operate as standalone outlets or as outlets in hotels managed by other operators.

Prestbury sells 102 Spirit pubs to Cerberus for £170m: Property firm Prestbury Holdings, led by Nick Leslau, has sold 102 Spirit freeholds to Cerberus Capital Management for £170m. It’s the second major pub acquisition for Cerberus, which acquired the Lloyds bank stake in Admiral Taverns at the start of 2013. The acquisition takes the total number of pubs owned by Cerberus to around 1,300 – it bought the 1,200-strong Admiral Taverns estate for a reported £200m. Property Week has reported that Blackstone and Patron Capital were among those that showed an interest for the portfolio. The group of Spirit pubs were originally sold on a sale-and-leaseback in 2004 when Spirit was owned by private equity and led by Karen Jones. It is thought that Spirit occupies the pubs on 30-year leases, which revert to open market rents at Year 15. According to Property Week, Cerberus will earn a yield of around 10% on the investment. The price per pub of around £1.7m compares with the £2.67m that British Land paid per pub for 65 Spirit freeholds in 2004, delivering a yield of 6.1% for British Land. CBRE acted for the vendors.

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