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Morning Briefing Strap Line
Wed 21st Mar 2012 - Starbucks, Antic and Ever So Sensible

Story of the day:

Multiple operators look for a freehouse after Greene King fall-out: Highly rated pub operators Dominic McCartan and Tony Leonard are looking for a second freehouse after handing back the keys to their two Greene King pubs in Brighton. The pair ran the award-winning Spotted Dog (formerly the Hop Poles) and the Eagle in Brighton for 12 and 11 years respectively. The businessmen accepted a surrender offer from Greene King after a long-running dispute over rent – the rent at the Hope Poles/Spotted Dog rose from £25,012 per annum when they first arrived to £79,000 plus ten per cent of turnover after they went free-of-tie. Leonard told Morning Briefing: “In 2009, David Elliott who was in charge of the tenanted division, apologised to us for the treatment we received and said he would ensure no Greene King tenant would receive similar treatment - it’s got considerably worse since then.” The businessmen also run the freehold Snowdrop in Lewes and are “on the look-out for a decent freehouse”. McCartan and Leonard were turning over £1m a year at The Hop Poles, a failed managed pub, at one stage – it was the highest take-per-square-foot pub in the estate. The turnover dropped to around circa £600,000 per annum at the Hope Poles soon after the smoking ban – and the two businessmen lost £35,000 and £60,000 in successive years. One observer told Morning Briefing: “As a Greene King shareholder I’m sad Dominic and Tony have left Greene King – they are among the finest licensees in the UK.” Turnover at the Snowdrop, a backstreet pub acquired from the Punch disposal estate, has climbed to £14,000 per week net of VAT since the pair took it over. A source familiar with the Brighton property scene told Morning Briefing: “Sadly the over rented premises, The Spotted Dog and The Eagle, have been used throughout the city as comparables and has caused other lessees to suffer in their wake and that will take a long time to re-balance.” Gavin George, chief executive of fellow Brighton operator Innbrighton, said: “It is a shame that Greene King and McCartan and Leonard were not able to sort out their differences because they seemed to be a good team when things were working well.” A spokesman for Greene King said: “We have had a long relationship with Dominic and Tony, which included joint investments at both their leased sites. Unfortunately this has now run its course and we have parted company. We won’t provide detail on individual agreements in relation to these pubs. However we always try to agree fair and sustainable rents for every agreement that a licensee signs with us. The two pubs have now been taken over by first rate entrepreneurs.” Propel understands that the Eagle has been let to Indigo Pub Company and The Spotted Dog has been let to Craft Beer Company.

Industry news:

Burger King close to completing Freestyle roll-out: Burger King in the US is close to completing the roll-out of Coca Cola’s revolutionary Freestyle dispenser to 850 sites, with franchisees encouraged to follow suit. The Freestyle, first tested in 2009, has been designed by Italian automative design firm Pininfarina and can dispense 126 kinds of carbonated and non-carbonated beverages from one free-standing unit. It avoids the traditional use of syrup boxes by using micro-dispensing technology originally developed to deliver extremely precise doses of drugs. The Freestyle machine allows customers to select products that are hard to find – Raspberry Diet Coke, Coke Zero Raspberry and Fanta Strawberry. A number of chains in the US have reported large sales increases after installing the machines. It has real-time data collection and has discovered, for example, a spike in non-caffeine drinks after 3pm.

Propel Opinion: Propel came across Coca Cola Freestyle at a Five Guys restaurant in Chicago last year. The unit looks stunning and provides the customers with a vast range of self-serve options. It is, without doubt, a big leap by Coca Cola, providing customers with much more choice via touch-screen technology. It is well-suited to fast-casual environments, but would also work well in lots of pubs.

CPI falls to 3.4 per cent: The consumer prices index (CPI) measure of inflation fell to 3.4 per cent last month from 3.6 per cent in January. However, other Office of National Statistics figures show the average pay rise fell from 1.9 per cent in December to 1.4 per cent in January, which means the average worker’s pay rise is less than half the increase in the cost of living. 

Times columnist sets out alcohol realities: Times columnist Michael Blastland has argued that the realities of alcohol consumption are completely at odds with newspaper headlines. He said: “The overwhelming evidence is that the majority of us are on a sobriety binge. Has so much opinion ever been so at odds with such easily obtained data? Firstly, the average quantity of alcohol that we say we drink has fallen 20 per cent in five years. That is a big number, the more surprising because so many give the impression that it’s going the other way, the Prime Minister included.”

Guinness sales boom in the US: Guinness sales are booming in the US with a 244 per cent increase in consumption in January and February this year compared to the year before. Some 300 new pub accounts were added by Diageo in New York alone in the year since St Patrick’s Day 2011. Shaun Clancey, owner of Foley’s Bar in New York’s Midtown, reports Guinness makes up 15 per cent of his sales even though he sells 100 beers.
Cardiff pubs, restaurants and hotels saw £10m boost from Wales Grand Slam: Licensees in Cardiff are thought to have enjoyed a £10m boost to takings at the weekend thanks to Wales’s successful completion of the Grand Slam. Pubs reported being full from 10am as the city centre saw 250,000 visitors. One licensee, Mike Peters, shift manager at the Gatekeeper pub, said: “Before Saturday we probably had about 800-900 gallons of beer – now we’ve only got 44 left.”
CPL Training captures record market share: CPL Training, the leading hospitality sector training company, has reported a dramatic rise in its market share for training people in the national qualification that allows a Personal Licence to be obtained. The company trained one in four of all people seeking the Level 2 Award for Personal Licence Holders (APLH) in the third quarter of 2011, the most recent quarter for which figures are available. This is a 25 per cent rise on the quarter before. Daniel Davies, chief executive of CPL Training, said: “The third quarter of 2011 share represents a 31.5 per cent like-for-like increase compared to the same quarter in 2010.”
Starbucks opens first Evolution Fresh site: Coffee giant Starbucks has opened its first Evolution Fresh site, an attempt to grab part of the $3.4 billion juice market. The site, in Bellevue, Washington State, offers a “premium juice and food experience”. The menu includes wraps, salads, soups, vegan and vegetarian options, with Evolution cold pressed “hand-crafted” juices in bottles and on tap. Starbucks acquired the Evolution juice brand in November last year.
Coming on Friday: Propel’s verdict on the Starbucks concept store in Amsterdam.

Company News:

M&B appoints non-executive director: Mitchells & Butlers (M&B) has unveiled another non-executive director for its board. Edward Irwin is a representative of Elpida, the investment vehicle of JP McManus and John Magnier, who, until now, have had no representation on the board. Irwin is finance director of Coolmore, a leading thoroughbred bloodstock breeder with operations in Ireland, the USA and Australia. M&B executive chairman Bob Ivell said: “I am pleased to welcome Mr Irwin to the board and we look forward to working with him to continue to drive the performance of the business forward. Elpida is a supportive shareholder and we are confident that having Mr Irwin on the board will be both positive and constructive. Our search for both a new chief executive and for independent non-executive directors is progressing well.”

Bubba Gump to come to London: Bubba Gump Shrimp Company, the US fish restaurant chain based on the Forrest Gump film, is to open its first UK site close to Leicester Square, according to the London Evening Standard. The restaurant is taking a 12,000 sq ft restaurant and 1200 sq ft shop at 7-14 Coventry Street opposite TGI Friday’s and in the former Planet Hollywood site at the Trocadero. The restaurant will be open from morning until midnight. Bubba Gump was set up in 1996 and has 34 outlets globally. It was created by Viacom, owner of Paramount Pictures - distributor of the 1994 movie. It is named after the film’s characters Benjamin Buford “Bubba” Blue and Forrest Gump. The chain was bought by restaurant group Landry, led by entrepreneur Tilman Fertitta, in 2010.

Wetherspoon's Martin claims it's been an odd six months: JDW founder Tim Martin has told Bloomberg TV that consumer fears over issues such as the Euro area debt crisis have created an “odd six months” of trading for the company. He said: “It’s been an odd six months. A very good Christmas, pretty reasonable first-half overall. Things got tough in January. This year people will have a little more money but they are worried by things they see on the news about the Euro. This all gets through to people.”

Betty Blythe founder closes in on second pub: The entrepreneur behind the highly regarded Betty Blythe Fine Food Pantry concept in London’s Brook Green is eyeing a second Punch pub after making a success of Punch Taverns’ Pear Tree in Hammersmith. Daren Seager is an interior designer who launched Betty Blythe’s, a 1920s tea shop concept named after the eponymous Hollywood sex symbol. The tea shop featured in celebrity chef Heston Blumenthal’s last book and has appeared in the pages of fashion bible Vogue. The businessman and his partner Lulu Gwynne decided to apply their skills to their first pub, The Pear Tree in Margravine Road, which is located behind Charing Cross Hospital. Daren has lined up a second pub – in the past he has talked about how he would like to fuse a pub with a top-notch breakfast and tea shop offer imported from Betty Blythe’s.
Antic opens twenty-first pub: Antic, the highly-rated London multiple operator led by Antony Thomas, has opened its latest pub, Pratts and Payne on Streatham High Road. It's named after the former department store Pratts and Luncheon Voucher madam Cynthia Payne, who ran a brothel in nearby Ambleside Avenue during the 1970s and 1980s. Other Antic openings lined up this year are: The Clapton Hart, in Lower Clapton Road, The Sylvan Post on Dartmouth Road, Catford Bridge, in Catford Bridge and Knowles of Norwood, in London’s Knights Hill area.
Ever So Sensible lines up second Everards site: Ever So Sensible Group, the Midlands pub and restaurant operator led by former Mitchells & Butlers executive Chris Bulaitis, has lined up its second Everards site – The Globe in the centre of Leicester. The venue follows on from the opening of The Marquis Wellington on Leicester’s London Road two years ago. Barrelage at the first Everards site has trebled thanks to a refurbishment that reinstated the right “colours, lights and furniture”. The Globe is the oldest pub in Leicester town centre and is gas-lit. Bulaitis told Morning Briefing: “The good thing about Everards is that the company isn’t interested in the short-term – it’s all about the long-term. The Globe is a beautiful old building – and we’ll introduce a good quality food business and ensure the conditions of Everads ales is right.” The second Everards site will be the twelfth Ever So Sensible venue.  In 2009, Bulaitis set up a parallel company Ever So Sensible Restaurants to balance his business out. He opened four Le Mistral Bistros to operate alongside his wet-led venues, such as two Dogma wet-led sites. Now at 11 sites, food accounts for 40 per cent of total turnover at Ever So Sensible Group - and 50 per cent if you exclude the two original Dogma venues.
Orchid launches key events footfall driver: Managed pub company Orchid has launched a scheme called ‘The Magnificent Seven’ aimed at uniting pubs around the biggest dates of the year and motivating them to do better than ever. By utilising the major dates on the calendar, and helping everyone share best practice, Orchid is aiming to make sure that promotions, offers and events tie-in with special occasions, encouraging more customers to come through the door and spend. Digital media is being used to create an interactive community among employees, so a dedicated website ( backs-up the initiative. Each event has a dedicated page with ideas and inspiration and a gallery where staff and customer photos are posted - with prizes for the best efforts. A blog also gives staff members the chance to write about what they are doing. Last weekend saw the first two Magnificent Seven events with St Patrick’s Day and Mother’s Day. Mother’s Day remained the biggest day in Orchid’s year with more than 28 per cent year-on-year growth. Its Carvery sites saw more than 30 per cent year-on-year growth, Dragon venues witnessed “enormous” 62 per cent year-on-year growth. The Moby Dick in Romford was the highest taking pub turning over £15,000 on Mothering Sunday.
Host of pub and restaurant companies lined up for Halifax’s Broad Street Plaza: The new £50m Broad Street Plaza, due to be centred on a multi-screen Vue Cinema, will see a large number of new pub and restaurant openings. The site will host new venues for Havester, JD Wetherspoon, TGI Friday’s, Nandos, Pizza Express, Whitbread’s Table Table and Frankie and Benny.
Analyst - Whitbread should de-merge Costa or sell property: Morgan Stanley leisure analyst Jamie Rollo has argued that Whitbread should de-merge Costa Coffee or sell and leaseback some of its hotel freeholds. He said: “Whitbread could increase shareholder value if it sold £250m of property per annum to pay for its large capital expenditure bill, upped its dividend 50 per cent, and demerged Costa. “Whitbread has been a good custodian, but we think Costa is now self- funding, large enough to be separately listed.” The Morgan Stanley “bull case” is that Whitbread shares are worth £30 each compared to current share price of £17.14.
Prezzo opens first railway station site: Italian restaurant group Prezzo has opened its first outlet at a railway station - the new-look Kings Cross railway station in London. The restaurant, which cost £600,000 to develop, will be the first in the group to operate a grab “n” go area in addition to its regular menu. Customers will be able to choose from a range of take away dishes, including flatbread pizzas, pasta dishes and freshly made salads.
Licensees take on second pub: Father-and-son licensees Ian and Scott Birch have taken on their second pub, the 14th Century Rhydspence Inn, just inside the Welsh border near Hay-on-Wye. Previous owner had Peter Glove had struggled to sell the pub and thought about turning it into a house. The Birch family already owns The Castlefields pub in Clifford on the opposite side of the River Wye.

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