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Morning Briefing for pub, restaurant and food wervice operators

Mon 26th Mar 2012 - Wetherspoon, Fuller’s & Jimmy’s World Grill

Story of the day:

Glendola Leisure seeks Waxy’s site in Edinburgh: Glendola Leisure, the bar, club and restaurant operator headed by Alex Salussolia, is searching for an Edinburgh site to house its Waxy O’Connor brand. The company acquired the leases of two Frankenstein pubs in Glasgow and Edinburgh last year. It had intended to convert the Edinburgh site into a Waxy O’ Connor but trading has been so strong at the venue since it took over that the plan has been scrapped. Sulussolia said: “We fixed the things that needed fixing and we’ve been growing sales every week- we’re now looking for another site in Edinburgh for Waxy.” The company has revealed that sales overall grew by 8.9 per cent in December, January and February. It saw five per cent growth in January and a 2.5 per cent drop in February but declined to give a precise figure for December – but the overall growth figure suggests 20 per cent plus growth in December. “We sense a slight slowdown in February and March,” said Salussolia. “Central London (trading) is fantastic but you have to work hard for it.” St Patrick’s Day produced some “record numbers” even though the flagship Waxy site off Leicester Square suffered a four-hour power failure. Meanwhile, Glendola has received notice on the City Pride pub from solicitors acting on behalf of developers. The pub, run by Glendola since 1985, is expected to be bulldozed to allow an office block to be built on the site. The venue is regarded as a piece of Isle of Dogs history but is set to close two weeks before the London Marathon. BBC television were due to film at the premises for the second year running – it provides great views of marathon runners who pass the pub on both sides as they make their way around the Isle of Dogs. Salussolia told Morning Briefing: “Scottish & Newcastle sold the freehold of the pub several years ago and we spent a couple of years negotiating the surrender of the lease – and were handsomely rewarded. Then the credit crunch hit and nobody had the money to develop the site. It’s the end of a quarter century at the site. It’s one of the last traditional pubs in the Docklands so it’s slightly sad but that’s progress.”  

Weekend catch-up:

Minimum pricing could be illegal: Former Health Secretary Alan Johnson has revealed that he considered introducing minimum pricing when in government but was repeatedly told by government legal advisors that it was illegal. Public health minister Anne Milton also recently told MPs that minimum pricing was illegal. The Attorney General is also believed to have told colleagues that it may breach European rules. In 1978, the European Court of Justice ruled that Dutch legislation setting out minimum prices for certain spirits was illegal. But Downing Street sources insisted the government is confident the policy is legal. A spokesman said: “There has been a big misunderstanding. If we were setting a market price to protect our domestic industry then that would be illegal, but that’s not what we are doing.” (See Opinion Extra at the bottom of the Newsletter)

Minimum pricing – distraction politics: The Labour Party has accused the government of unveiling minimum pricing for alcohol as a way of deflecting attention from the Budget. The announcement was made to a half-empty House of Commons by Home Secretary Teresa May on Friday. It is only the fourth time in ten years that a minister has made an announcement to the house on a Friday. The other three announcements covered more urgent topics such as Libya, swine flu and the Iraq war.

Groupon seeks compliance director: Groupon, the discount voucher company, is looking to recruit a compliance director in the wake of a critical investigation of its business practices by the Office of Fair Trading. The new compliance director position, advertised in the Sunday Times, will make sure “Groupon has a clear understanding of its regulatory compliance risk profile and is organisationally conforming to its on-going responsibilities”. Groupon is looking for someone who can make “an immediate start”.

Popular smoothies and juices contain mostly apple juice: A survey by Which? has shown a range of smoothies and juices – marketed with speciality fruits such as mango, blackberry and passion fruit – contain mostly apple juice. The consumer watchdog found leading manufacturers, including Tropicana and Innocent, use large amounts of apple juice in products that bear the name of exotic and speciality fruit can make up just ten per cent of the drink.

Independent columnist – pubs deserve a break: Simon English, an Independent columnist, has argued that pubs are “over-taxed, over-regulated and under-appreciated”. He added: “Supermarkets pay almost no VAT on food, but pubs fork out 20 per cent, allowing Tesco et al to subsidise alcohol sales in ways that drive people away from businesses.”

Which? reports supermarkets are shrinking products: Consumer watchdog Which? has found supermarkets are shrinking products rather that raise prices. Jars of Loyd Grossman balti curry sauce have shrunk from 425g to 350g and tubs of Dairylea cheese spread are now 40g lighter. A Which? Spokesman said: “If the carrier bags full of your weekly shopping feel lighter, but the total on the receipt seems as high as ever, it’s not your imagination.” 

Pop-up restaurants are proving their worth: The Wall Street Journal as argued that pop-up restaurants have become a multipurpose tool that are being used by different strata of the restaurant industry to test concepts, market new brands, engage with a younger audience, or prove to landlords, lenders and investors that they are worth the risk. A planned Jewish delicatessen business proved there was a market for Jewish food in San Francisco by operating a pop-up restaurant.  The Wise Sons pop-up soon began gathering crowds and winning attention in the local press. In late February, just over a year since starting the pop-up, which still operates once a week, the partners opened a fixed location in the city’s Mission District.

Anti-obesity drive leaves out McDonald’s and KFC: A deal with government to cut five billion calories a day from the national diet has been criticised for leaving out fast food companies such as Burger King, McDonald’s and KFC. The deal, signed by Asda, Coca-Cola, Mars, Morrisons and Premier Foods – was described by Shadow Public Health Minister Diane Abbott as “wholly worthless”. She added: “Some of the country’s biggest firms simply can’t be bothered with it.”

Company news:

JD Wetherspoon drops price of a cup of tea to 99p after customer complaint: Managed operator JD Wetherspoon is to drop the price of a cup of tea to 99p after a customer complained that £1.19 was too high. The customer wrote to founder Tim Martin to point out that tea was cheaper in Burger King and McDonald’s – as well as several major supermarkets. The customer stated: “Burger King and McDonald’s do it for under a pound while Asda, Morrisons, Sainsbury’s and Tesco do a pot of tea, which makes nearly two cups, for 89p. I know that VAT is 20 per cent, so twenty odd pence goes on VAT, but maybe the price is still a bit steep.” Martin, writing in the Wetherspoon News customer magazine, said: “Okay – fair comment. We’ll reduce it to 99p although it may be a bit more in central London and at airports.” Wetherspoon produces its new menu this Wednesday (28 March). The major innovation is that it will start to serve eggs Benedict with a small coffee, tea or fruit juice for £3.99.

Young’s targets central London: London pub company Young’s is targeting acquisitions in the West End and City of London, chief executive Stephen Goodyear has told the Financial Times. “We’ve got plenty of room to expand in the M25,” said chief executive Stephen Goodyear. “We’re not as strong as we would like to be in the West End and City – there is room to expand there.” Young’s acquired Geronimo Inns in late 2010, adding 26 pubs to the estate. Young’s has subsequently opened six more food-led Geronimo pubs, including one earlier this year on the ground floor of Japanese bank Nomura’s City headquarters, and it plans to open another eight by 2015.

Cambscuisine set to open fifth site: Cambscuisine, the pub and restaurant operator headed by former Scottish & Newcastle regional manager Oliver Thain and chef Richard Bradley, has secured its fifth site. The company is taking over the Tickell Arms in Whittlesford, which has been closed or two years. Bradley said: “We have been looking for a new site in south Cambridgeshire for a very long time and had heard The Tickell had closed down. It is still very well-known even after being closed for a very long time, and has bags of potential.”  The company will be serving modern European food at the venue. Cambscuisine operates two Cambridge chophouse restaurants, The Cock at Hemingford Grey and The Boathouse in Ely.

Le Pain Quotidien to open four more UK sites: Belgian café and bakery chain Le Pain Quotidien is to open four more UK sites this year to take its UK estate to 24 sites. The company, which opened just one extra site last year, saw pre-tax profit of £3.12m on turnover up 22 per cent to £26.24m in the year to 25 December 2011. Finance director Diane Wood said: “Last year, we were concentrating on improving profitability, and this year we are concentrating on more stores.”

Sarumdale sells King’s Head, Burgess Hill: Sarumdale, the south-east multiple operator headed by Mike Lloyd, has sold the freehold of The King’s Head, Burgess Hill to a development company. The venue will close on 3 April. Lloyd told the local newspaper: “It’s a source of great regret to me personally. But it has been losing a lot of money and I can’t sustain that any more.”

Fuller’s re-opens Bishop’s Waltham pub after £2m refit: London brewer and retailer Fuller’s has re-opened The Crown Inn at Bishop’s Waltham after a £2m refurbishment. The venue, which has been closed since 2010, now offers eight “boutique bedrooms” as well as an “exquisite dining experience”.  The building has its own place in history as it billeted captured French Sailors after the Battle of Trafalgar, including the Admiral of the Franco-Spanish fleet, Vice-Admiral Villeneuve.

Butcombe Brewery adds 21st site: Butcombe Brewery has acquired the Imperial Brasserie, in South Parade, Weston Super Mare, to take its retail estate to 21 sites. The Brasserie is being renamed Pub Bar and Bistro. This is the brewery’s third venue in the area - The Woolpack in Worle and The Queen’s Arms in Bleadon are its other sites. Butcombe managing director Guy Newell said: “We have known the current owners Chris and Mike Sanders for many years - they invested in revamping the interiors and furnishings when they took this fantastic building over in 2010.  We have put our own stamp on it, making the front “Imp Bar” more attractive and welcoming, with new flooring, lighting and furniture.”  Sanders said: “Imperial is one of Weston’s high quality buildings and we are pleased to have played a part in saving it - when we took it on, one of the other interested parties wanted to turn it into a lap-dancing club!”

McDonald’s in Tamworth closes its doors: McDonald’s in Tamworth town centre has closed its doors after nearly 30 years in business. Coun Steve Claymore said: “I was told the major factor in McDonald’s move was the cost of maintaining a business in the town centre, particularly rents and other property costs.”

Bristol businessmen open second site: Bristol entrepreneurs James Smailes and James Koch, who run the The Colour Inn in Clifton, have opened a bar and restaurant called The Gallimaufry on the site of the former music bar The Prom on Gloucester Road. Chef is John Watson, formerly of Michelin-starred Casamia. He said: “I want to fill people’s bellies with hearty British fare, supplying dishes that rely on the availability of local produce.”

Belgique opens ninth site: Belgique, the Belgian pattiserie and beer concept, has opened its ninth site at the former Lussmans restaurant in Bishop’s Stortford. The chain, which has sites in Epping and Ware, combines freshly baked bread with Belgian dishes, hand-made patisserie and a range of more than 100 Belgian beers as well as artisanal meats and cheese for customers to take home from its deli section. Operations manager Robert Burton said: “Markets towns, villages and residential areas are great for our business. Belgique attracts a wide audience. It is great for kids and mothers to meet in the mornings, professional people dining out or quickly grabbing lunch through to being a family destination on the weekends.”

Fleetwood Mac founder to open pub in Maui: Fleetwood Mac star Mick Fleetwood is to open a pub/restaurant called Fleetwood’s in his adopted Maui, Hawaii so he can recreate the days when he played drums along to backing tracks in his parents’ shed for kids in his neighbourhood. He said: “Selfishly, I’ve built myself a stage to play on any day of the week – I really can’t wait to open the doors.”

Jimmy’s World Grill opens in Peterborough: Jimmy’s World Grill has opened its fourth venue in the Cambridgeshire city of Peterborough. The brand offers all-you-can-eat Chinese, Mexican, Italian, Japanese and Indian food. Ten openings are planned in 2012, including a site at the 02 Centre. A spokesman said: “Jimmy”s World Grill is a complete dining experience – we pride ourselves on the quality and freshness of our food.”

Marston’s – tenanted investment where proven in managed: Marston’s, the Wolverhampton-based brewer and retailer, has reported that investments in its tenanted estate will tend to only follow evidence that an investment has worked in the managed estate. Chief financial officer Andrew Andrea told the Numis Securities leisure conference that the company recognised quality licensees need investment support but would “only invest where the case was proven in the managed estate”. One example is investing in “impact (beer) gardens”, which has been shown to work in its managed pubs and would also provide a return in tenanted pubs with large gardens.

Opinion extra:

No evidence minimum pricing will work by Paul Chase: So, it’s finally going to happen! The remorseless pressure of Medical Temperance has finally paid off, and the Coalition Government is going to introduce a minimum price for alcohol, reportedly at 40 pence per unit. The government predicts that this will significantly change the behaviour of “binge drinkers” – those who cause the most problems for hospitals and the police – by making it more expensive to get drunk. But what is the evidence for this? The Sheffield University Review predicts, on the basis of its mathematical model, that a 50p minimum price would mean that a young binge drinker will drink 0.8 units of alcohol less per week – about a third of a pint of lager or beer over a seven-day period. Or, they’d need to spend all of £1.14 per week to maintain their drinking at the same level as before. This report is the “evidence” usually cited in support of minimum pricing. Presumably a 40 pence minimum price will have an even smaller impact. And it is no surprise this Review is so widely quoted, because there is no evidence that minimum pricing, as envisaged by the government, will deliver the benefits claimed. This is because outside of government alcohol monopolies like Canada, it hasn’t been introduced anywhere in the world. Anyone who thinks that this is a magic bullet that will end the youthful carnival in city-centres is clearly deluded. But this is really all about symbolism. Now that government has become the ‘price-giver’ for the licensed trade, the image of alcohol as “no ordinary product”, but as something dangerous that we all need to be protected from, has become official policy. The Medical Temperance view of alcohol is in the ascendance. Their view chimes with government - not least because it gives them a ‘health concern’ smokescreen behind which they can introduce what is nothing more than a sin tax. An online BBC News item gave a number of examples of how a minimum price would impact. Inevitably an old Temperance favourite – super-strength cider – made an appearance in the BBC’s article: “Bulk-bought strong cider, costing 87p a can and containing four units, would double in price to at least £1.60.” Well, what a relief, we can all sleep safely in our beds then! What they neglected to mention is that cheap, strong white cider accounts for one tenth of one percent of pure alcohol consumed in this country. The introduction of minimum pricing represents the triumph of the politics of prejudice and political expedience over rational, evidence-based public policy making. It also symbolises the failure of the drinks’ industry to mount a united challenge to Medical Temperance, or to contest the medico/crime and disorder frame of reference that they have successfully established. If there is a challenge to this in the European Court of Justice, on the basis that it conflicts with European competition law, you can expect plenty of posturing from Mr Cameron “standing up to Europe” in order to throw more red meat to his anti-EU back benchers. What a complete train wreck!
Paul Chase is director and head of UK Compliance for CPL Training

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