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Morning Briefing Strap Line
Wed 11th Apr 2012 - Spirit, Toby Carvery, Georgie Porgies

Story of the day:

Spirit to explore franchise route for leased estate: Spirit Pub Company has signaled that it will explore the franchise route for its 550-strong leased estate. The company, which is currently selling around 80 bottom-end leased pubs, will take a “new retail approach to the leased model”, chief executive Mike Tye has stated. Tye reported that the leased estate has the potential to be a “very good business” but at the moment the business is not in its “optimal phase”. The current focus in Spirit’s leased division has been on a full estate review to identify the best option for each pub in the wake of the appointment of former Greene King executive Chris Welham to head the division. Tye said he saw a “big upside” in the leased division but that the transformation of the division would take time. For now, the leased business “is still in the focus and stabilise phase”. Tye declined to provide details on franchise plans but observers believe that the company could look to offer lessees the chance to operate existing managed division trading templates. Alternatively, the company could look to create stand-alone trading concepts for its leased division subject to oversight from the managed division. The latter option might be preferable since it is still thought that Spirit would like to sell its leased business eventually. Franchise or quasi franchise options are currently being pursued by a number of tenanted pub operators. These include Marston’s, Greene King, Enterprise Inns and Charles Wells, which has just started a trial.

Propel Opinion by Paul Charity: What a difference a decade makes. Spirit boss Mike Tye comments that Punch Taverns, the company from which Spirit was de-merged last year, was founded on the “model of rising rent and beer margin”. In other words, the tenanted pub model ten years ago was a very straight-forward business that guaranteed at least gentle growth on the back of the dual levers of rent and beer inflation. The game has changed. Punch itself has undergone a root-and-branch culture change. It is now focused on creating a sustainable future based on finding ways to grow profits for both itself and licensees. Chief executive Roger Whiteside said recently: “The fundamental change in mindset in Punch has been to recognise that we can’t succeed at the expense of our licensees.” Companies have increasingly come to the view that optimal asset utilisation requires a much more pro-active approach. At the end of last year Enterprise Inns chief executive Ted Tuppen said the company had enjoyed ten years of plain sailing with a following wind, then a stormy period of economic turbulence and now the prospect of three to five years of having “no following wind”. The difference to the economic performance of Enterprise would be made by “rowing” – the extent to which the company can out-perform market conditions would be made by “stuff we do ourselves”. It’s the story of the tenanted sector at the moment.

Industry news:

LGA calls for greater share of late-night levels for councils: Local authorities have called to be allowed to keep a greater share of a proposed new levy on late-opening bars and nightclubs. The Local Government Association (LGA) warned that a planned 30% cap on their entitlement from the proceeds of the Late Night Levy risked leaving local taxpayers out of pocket. Mehboob Khan, chair of the LGA’s safer and stronger communities board, said: “The introduction of a Late Night Levy is a definite step in the right direction, but the current plans for how the money can be used risks taxpayers still being left to pick up the bill because it fails to recognise the significant contribution made by local authorities.” Consultation closed yesterday.

Warm weather drives up March retail sales: Warm weather boosted retail sales by 3.6 per cent in March, following a 2.3 per cent rise in February. The increase was driven by clothing, footwear and outdoor leisure sales. Meanwhile, the Organisation for Economic Co-operation and Development reported that the UK economy saw signs of an increase in activity in the first two months of the year.

Alcohol good for brain activity: A study has found that men who consume four units of alcohol are better at solving brain teasers than those who abstained. A study by the University of Illinois found a drinking group solved nearly 40 per cent more problems than a non-drinking test group and took an average of 12 seconds per question, compared to 15.5 seconds needed by sober subjects.

Sales of mackerel soar: Supermarket company Waitrose has reported a 20 per cent increase in the sale of mackerel in the past year. The rise is attributed to health-conscious Britons buying more fish – and the championing of smoked mackerel by celebrity chef Hugh Fearnley-Whittingstall.

Former head of Punch leased sees funeral firm sale: The funeral firm headed by former Punch leased division boss Deborah Kemp has been sold. LM Funerals, the UK’s third largest funeral company with more than 60 branches, has been sold by Sovereign Capital for £37.5m. The buyer is a consortium led by Duke Street Capital – and Kemp will continue as chief executive.

US restaurant industry creates 560,000 jobs since March 2010: The National Restaurant Association (NRA) has reported that restaurants have added more than 560,000 jobs since March 2010, with more than 200,000 of those positions created in the last six months. As the nation’s second-largest private sector employer with a workforce of nearly 13 million – almost 10 percent of the US workforce – the restaurant industry is one of the strongest job creators in the country. “The restaurant industry strongly contributes to the health of our nation’s economy by driving job growth across industry segments, and providing rewarding career and employment opportunities for millions,” said Dawn Sweeney, president and chief executive of the NRA.

Domino’s in the US gives away 75,000 pizzas: Domino’s Pizza is to introduce its new artisan pizza rang to customers by giving away 75,000 this week. The giveaway takes place over four days that started on Monday (9 April).The giveaway is first come, first served.

Company news:

La Tasca appoints Ellie Frost to develop its international franchise business: La Tasca has appointed former Jamie’s Italian executive Ellie Frost to develop its international franchise business. La Tasca which already operates five sites in the USA, will now expand globally through franchise partnerships. Ellie, who was previously responsible for the international expansion of Jamie’s Italian, will develop the franchise offering for La Tasca in line with the brand ethos and culture. Chief executive Simon Wilkinson said: “I have been focusing on reinvigorating the UK brand and wanted to get that right before looking at the global franchise market. We already have a strong business in the US and feel that the time is now right to expand globally. The Spanish style of eating is very compatible with a lot of the international markets due to the informal, shared eating style and popular dishes. The atmosphere is a key differential at La Tasca due to the Spanish themed events and there is already interest from key markets in taking the brand. We are looking for the right partners who share our vision and ethos to take our authentic Spanish experience around the world.” Ellie Frost said: “I am really excited to be working with Simon and his team at La Tasca. It’s great to be part of it at this time when the potential for the franchise expansion is untapped. Simon and I believe very strongly in the authenticity and values of the brand and the franchise relationships, the fact that La Tasca offers an interactive experience with its customers beyond the dining experience is very exciting and relevant to the international markets.” Last week, Morning Briefing revealed that Ellie Frost is also to join the board of Beds and Bars as a special project director to oversee expansion in the US.

Propel Opinion: A host of UK operators are proving that hospitality businesses founded in this country can compete on even terms with the best in the world. Wagamama, Yo! Sushi, Pret A Manger and Hakkasan are among those leading the charge. The past seven days has seen Beds and Bars and La Tasca stepping up plans to expand in the US. To echo Colin Welland's famous words: The Brits are coming.

Toby Carvery hits discount lever: Toby Carvery, the Mitchells & Butlers mass market chain, has launched a two carveries for £10 offer that runs until 2 June. The company was promoting the offer aggressively pre-Easter with adverts in national newspapers on Thursday. The offer is thought to be the biggest discount offered by the brand this year – it was offering customers a free ice cream sundae in February. Peter Backman, of food market insight firm Horizons, told Morning Briefing: “It does look like quite an aggressive offer after not doing much in the way of offers. It strikes me as an unusual departure for Toby. Generally, the number of vouchers (in the sector) this year has been up on last year but down on 2009.” Toby normally benefits from cold or wet weather so warm weather in March will not have helped trade. However, the forecast of poor weather over Easter would normally have helped business, making aggressive discounting pre-Easter a surprise. 

Loungers founders take “sizeable step-away” from Flatcappers management: The founders of Loungers, which has seen a £16m investment from Piper Private Equity, have taken a sizeable step-away from the day-to-day management of its subsidiary company Flatcappers. The Loungers directors co-founded Flatcappers with former Bibendum manager Pierre Woodford. Flatcappers is currently running two pubs, the freehold Castle in Bradford-upon-Avon and the Battle Axes, a few miles outside Bristol, where the company has a 15 year free-of-tie lease. Last year, it disposed of its Wellington Pub Company free-of-tie lease on the Bell in Frome for a “good premium”. Loungers managing director Alex Reilley told Morning Briefing that the company would focus on developing a number of elements at The Battleaxes for the next few years, including its car park, bedrooms and function room. 

JD Wetherspoon buys closed Spirit site: Managed operator JD Wetherspoon is buying a site in Leek, Staffordshire, from Spirit Pub Company, the landmark Swan Hotel in Leek. Wetherspoon is set to spend £1.4m on the site, believed to be Leek’s oldest pub. Leek Civic Society chairman Josie Heath said the hotel had been allowed to deteriorate in recent years and was urgently in need of major investment.

Brewdog opens Newcastle site this Friday: Brewer and bar chain BrewDog will open its Newcastle venue this Friday (13 April). A spokesman said the venue would “be a bar where you can escape the pathetic monotony of mass market industrial beers made by faceless multi-national corporations”. He added: “You can look forward to old school pinball, live music, vintage records, board games, 14 beers on draft, friendly, passionate and informed staff - as well as a selection of the best craft beers on the planet and a brass band in penguin outfits.”

Cheescake Factory rules itself out of Fulham site: Highly rated US restaurant chain Cheesecake Factory has ruled itself out of taking a site in Fulham’s Broadway. The company, which operates 151 eponymous restaurants in the US and 13 under the Grand Lux Café format, is keen to open in the UK but hasn’t found a site. The president of the California-based company Mike Jannini, told the Fulham Chronicle: “While we are very interested in global expansion, including in the UK, and have been exploring opportunities there, we have not found one that is exactly right for us just yet.” The previous occupant of the site Cheesecake Factory was tipped for, Union Market, was forced into administration after struggling to pay the £300,000 per annum rent on sub-lease to the former occupants of the site, TGI Friday. Cheesecake Factory is known for its eclectic menu, big portions, and signature cheesecakes.

Heineken set to unveil innovative nightclub: Brewer Heineken will unveil the results of intensive work with 19 designers to co-create a concept nightclub. The nightclub will be unveiled during Milan Design Week, which will be held between 17 and 22 April. Mark van Iterson, global head of design at Heineken, said: “We wanted to create a platform to go even further, to be even more progressive and more experimental. A club seemed perfect for us to create since it’s an extrovert space where design is of crucial importance in setting the scene. The complexity of creating one coherent concept across all elements was a big challenge. It shouldn’t feel like an exhibition of 19 designers, it should feel like one club, combining different perspectives, resulting in one great evolving experience.”

New nightclub opens in Reading: Spin Bar and Nightclub has opened its doors at the old Bar Mango site, in Reading’s Hosier Street. Bar Mango closed its doors last year after operating for ten years in the town. Gavin Lancashire, from Spin, said: “The building has been ripped back to the bare brick and we are transforming it into a new over-21s late night venue for the people of Reading. “It should be very different from what the rest of Reading has to offer at the moment.” The club will have a lounge and cocktail bar, dance area and a large Hawaiian theme garden with a DJ booth outside. Lancashire added: “We’ll be open from 7pm so you can come in after work and have some cocktails or beer in the garden with music playing and the next wave comes in later when the club opens up.”

Georgie Porgies Buffet World set for Reading: The buffet restaurant concept George Porgies is set to convert the old Simonds Bank building into its second site. Georgie Porgies offers a host of different dishes from around the world under one roof. Diners can choose from Chinese, Thai, Indian, Mexican and Italian food from the buffet as well as hot and continental breakfasts. The chain launched in May last year with a restaurant in Poole and there are two others due to open in Southampton and Birmingham.

Chef to launch incredible edible beer garden: Chef Glen Duckett has reopened the Eagle and Child, in Whalley Road, Ramsbottom as a social enterprise – with a fresh approach to cooking with the creation of a community garden. The chef will transform an acre of land adjacent to the pub into an ‘incredible edible’ beer garden for community use. He is working closely with Incredible Edible Ramsbottom to complete the project, which will see fresh fruit and vegetables grown on site. Duckett said: “I have been involved with community gardens and horticultural projects previously and they represent a fantastic way of bringing community and local businesses together. “As well as creating a fantastic growing space for the local community to use, I want to ensure the fresh fruit and vegetables grown are used in the restaurant at the Eagle and Child. The term locally sourced produce can’t get much more local than our own back garden. “The garden and the pub restaurant will provide a quality dining experience where the whole family can learn more about the food they are eating and how to grow it in our Incredible Edible beer garden.”

Greene King pub set to become Sikh community centre: Plans to turn a former Cambridge pub into a Sikh community centre have been submitted. Cambridge Sikh Society has submitted plans to turn The Grove in Arbury Court, Cambridge, a Greene King pub that closed in September, into a community centre. Camra branch officer Paul Ainsworth said an objection is unlikely. He said: “We tend to object if we feel a pub is valued and well-regarded, and has potential to live again, and with The Grove I don’t have the sense that a lot of people are going to want to fight to keep it as a pub."

Club turned into real ale venue: A consortium has converted the former Willow club in Millom’s St George’s Terrace into a real ale venue. The venture will be run by a consortium that includes brothers Larry and Bob Mackie and local businessman Robert Tyson. Bob Mackie said: “Real ale is my passion. The opportunity arose to take it over and we went for it.” The pub will be serving beers brewed by Millom’s Hardknott Brewery and Beckstones Brewery, in Thwaites along with some more familiar favourites.

Abbey Ales pub enjoys success with its own pie: Abbey Ales’ The Assembly pub in Bath has joined forces with city pie maker Lovett Pies to create The Bath Pie. The three key ingredients are all sourced from around the city: Bellringer Ale by Abbey Ales, beef from Marshfield and Bath Blue Cheese. The idea for the project came to Assembly Inn licensee Caroline Walcot and pub chef Alex Coxall when they set out to serve up a local dish on the pub’s menu. “We came up with a blank,” said Caroline. “With so much interest in local food these days, we decided we had better create our own regional dish.” The pie went on the menu at the Assembly at the start of December, with the Abbey Ales-owned pub saying that the dish already accounts for a large percentage of food sales. “The response to a Bath pie has been incredible,” said Caroline.

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