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Morning Briefing for pub, restaurant and food wervice operators

Wed 23rd May 2012 - McDonald’s, Hook Norton and Mezze

Story of the day:

McDonald’s provides a glimpse of future plans: McDonald’s has hosted analysts at its state-of-the-art Innovation Centre in Chicago to offer a preview of its key projects. A host of analysts filed reports on the visit which revealed that the fast food giant will introduce self-ordering kiosks, mobile ordering and digital menu boards, which allow for more flexibility with promotions and up-selling. Other sites will also trial separate service points that will ease queues by allowing customers to order at one station and collect their food at another. One of the analysts, Jeffrey Bernstein, of Barclays Capital, reported that back-of-house systems upgrades could enhance capacity by up to 30 per cent. A high-density prep line in the kitchen is being worked on that would facilitate increasing menu complexity while reducing overall energy costs. Other systems improvements include the introduction of better real-time ordering data and new “Intuitive” EPOS keying to make life simpler for cashiers. The company also told analysts that its new product pipeline is the biggest ever with work to cross-fertilise successful menu items in different territories - successful premium beefburger items from Europe, chicken dishes from Asia and successful beverages in the US would be exported around the globe. Sara Senatore, from Bernstein Research, said: “The Innovation Centre evidenced McDonald’s relentless pursuit of operational excellence, suggesting to us that hamburger competitors will find it difficult-to-impossible to catch up and that McDonald’s will defend successfully its market leadership. In the near term, however, Europe remains a challenge, and investments will continue, depressing earnings growth.”

Free Report: Paul Charity has written a report on menu trends, the drivers of US dining occasions, the franchise business model and other key areas of the US foodservice market and their significance to the UK market. The report, based on a visit to the National Restaurant Association show in Chicago, is produced in conjunction with the Association of Licensed Multiple Retailers and sponsored by CPL Training. It is free and is available by e-mailing Paul Charity on

Industry news:

Managed food outlets driving growth in the food-led universe: On-trade market research firm CGA has reported that managed food-led pubs and restaurants are driving all the growth in the food-led on-trade  universe – and at the expense of independents. The number of branded food pubs has risen by 13.7 per cent in the past year to reach a total of 2,146. There was also a rise of seven per cent in the number of branded managed restaurants to reach 3,766. CGA argued that “as treat spenders become more risk averse, the known and proven brands are receiving investment”. Non-branded dry-led managed sites were the major loser in the sub-sector, contracting by 6.1 per cent to 1,310 venues. Both independent pubs and restaurants and leased and tenanted dry-led venues saw a contraction in universe size, with the independent sector suffering the most. Independent restaurant numbers dropped 3.4 per cent to 18,413. Leased and tenanted operators who are dry-led suffered only a marginal drop in numbers of 0.1 per cent to 4,864. CGA concluded that a “flight to food is not necessarily a route to security”.

Beer Duty escalator petition nears 50,000 signatures: The Beer Duty escalator petition is almost halfway to forcing a parliamentary debate. The petition has 47,772 signatures – 100,000 are needed to force a debate in the House of Commons.

Franchise network in the US stepped up since recession: Multi-unit franchising has increased during the recession in the US. Of the circa 60,000 franchisees across all food and restaurant chains in the US, 36 per cent are now multi-unit owners. Darrell Johnson, chief executive of sector analysts FRANdata, said the rise of multiunit ownership goes back over a decade, but has accelerated sharply since the recession. "Banks were basically not lending," he said. "So franchisors focused first on the proven operators with strong cash flows." The average McDonald's franchisee today owns more than six locations, up from three 15 years ago.

York set for beer census: Members of CAMRA in York are to undertake a beer census in the hope of claiming the title of the city offering most range – and, therefore, Britain’s real ale capital. Volunteers will visit every pub in the City of York area on 30 June and record every beer available. They hope to beat the figures of 176 different real ales recorded in Derby and 257 in Sheffield, both of which have claimed the crown. Lucy Buykx, one of the organisers, said: “York has a buzzing beer scene, with great pubs and a growing range of really good beer.”

The booze cruise makes a comeback: Calais Wine Superstore has reported a ten per cent increase in trade in recent weeks as the strengthening pound makes a trip to Calais to stock up more worthwhile. P&O reports that it has taken 140,000 bookings from Dover to Calais during the Jubilee weekend. Boss of the Calais Wine Superstore Marco Attard forecast that if the exchange rate hits 1.35 Euros to £1 trade would climb by 20 per cent.

Company news:

Hook Norton unveils radical makeover: Two years of intensive work has reached a culmination this month with Hook Norton showing off a radical re-invention of its branding, including a new website. New branding for its flagship Hooky, for example, now at a lower strength 3.5 per cent abv, involves embossed lettering and a classic image of the Hook Norton brewery juxtaposed with its Cotswolds setting. Jonathan Paveley, chairman of Hook Norton, told Morning Briefing: “When I was first asked to take on the role here I saw Hook Norton in the same mould as a Tim Taylor’s based on the quality of its beer. I fell in love with the beer – frankly, it’s the best beer I’ve ever tasted and I know my beers. But I felt the branding was undistinguished. We started a process of looking at the branding and after two years we’ve launched full wall-to-wall re-branding. The feedback is exceptionally strong – although one or two are in shock. But it’s about articulating our position as a brewery in the Cotswolds using the finest ingredients – our beers have won more plaudits than any other brewery in the UK.”
Admiral Taverns – “business having a good year”: Jonathan Paveley, chairman of Admiral Taverns, which owns just under 1,200 pubs, has reported the business is “having a good year so far”. The company has sold 1,000 pubs since Paveley became chairman in November 2009 and is seeing good like-for-like growth in its core estate of 800 pubs. Around 12 months ago, the company’s reduced debts and strong cashflow allowed it to step up investment with around £8m a year being spent on pub improvements. Admiral is “getting a good return” on its investments, reported Paveley, and the priority now is to “finish the job we started” – reducing debt through selling around five or six pubs a week whilst focusing investment on the core estate. Paveley also reported that external surveys of operators had found dramatic changes in the perception of the company with “some of the best operators” in the sector now saying they “want to come to work with us”.

Gloucestershire multiple to open third pub, a Charles Wells venue: Licensee James Myer is to open his third venue, a Charles Wells pub that’s been closed for 18 months. Myer, who entered the pub trade four years ago, already runs The Kings Head in Kings Stanley and The Bell in Selsey, Gloucestershire. His latest venture is The Kilkeney Inn in Andoversford, which has seen a £100,000 co-investment between the Charles Wells and Myer. The pub re-opens tomorrow (Thursday 17 May) and Myer has hired a chef, Darren Lefeuvre, who won a Michelin star at The Stonehouse Court Hotel. Myer told Morning Briefing: “The Kilkeney has a superb location and we’re looking forward to re-opening the pub.” Peter Wells, managing director of Charles Wells Pub Company, said: "Finding the right licensee was critical to restoring the pub to its former glory and we’re excited about the plans that James Myer and his team have in place to do just that." Myer, a former graphic designer, has had particular success by introducing a stand-alone coffee shop at his King’s Stanley pub.
JW Bassett expands with tenth site: JW Bassett, the nine-strong multiple operator led by Jon Bassett, has expanded its Welsh estate with the acquisition of a freehold in Cardiff from Heineken. The company has bought Bar YK, which will revert to its former name, The Four Elms. The company already has six pubs in Wales – two in Newport and four in or around Cardiff - and recently added a second pub to its existing site in Bristol. Bassett Pubs operates four Mitchells & Butlers franchises.

Fuller’s evolves pub offer at The Tokenhouse: Fuller’s has re-opened a former Bluu in the City of London, acquired as a package of five pubs from Marston’s, as The Tokenhouse. The venue combines elements of modern and retro/traditional design with exposed ducts, parquet tiles on the wall, retro furniture, an open kitchen and extensive use of white tiles. Philip Harrison, of design and brand consultancy Harrison, the design company used by Fuller’s, told Morning Briefing: “It’s a modern take on the pub. We as designers had to recognise that Fuller’s has a lot of capital invested in its brand. As the quintessential London brewer, there was a need to capture that spirit even though the site has a more modern feel. I think it taps into all the points that people expect from Fuller’s.” The site was regarded as the most “challenging” of the five sites that Fuller’s bought from Marston’s. The two-level venue is understood to be trading very well since it re-opened.

M&B hits 1000 pub mark for Cask Marque accreditation: The Rose & Crown, a Vintage Inns site in Sevenoaks, Kent, has become the 1,000th pub to become Cask Marque accredited. The company received its first Cask Marque accreditation in 2006.

Distinctive Inns goes multi-site: Distinctive Inns opened its second site in partnership with Punch Taverns yesterday (Tuesday 22 May) after a £450,000 joint investment. The Nuthall Pub and Kitchen in Nottingham will offer “fresh locally sourced produce, traditional ales and worldly wines” – the venue was formerly known as The Broxtowe. James Bull and business partner Ross Tunaley have set up Distinctive Inns after their first opening, The Riverside Pub & Kitchen in Farndon, near Newark, proved a big hit. Bull said: “We’re hoping to capture more of the business market at The Nuthall. The Park & Ride is over the road from the pub and we’re just off Junction 26 of the M1. We’re opening in the morning to serve breakfast and brunch. We will be serving fresh food at The Nuthall but each of the two pubs will have their own menus.” The company’s first pub also re-opened after a £500,000 joint investment with Punch Taverns. Before opening The Riverside, James spent 13 years working for Mike Staniforth’s Probably a Pub Company as its business development manager – the company specialises in investing in run-down pubs. Business partner Ross has a background in finance.
YO! Sushi set for 62nd site next month: Conveyor belt sushi firm YO! Sushi will open its 62nd UK site in Guildford’s Friary Street shopping district on 4 June. The restaurant will span 1,650 square feet and feature 58 covers. Design, by Philip Watt Design, features ten booth seats and 27 stools and aims to “mesh texture and colour combinations to depict the frenetic culture found in downtown Tokyo”.
Sunset Taverns opens third site: Sunset Taverns has invested £100,000 in turning Ye Old Crown in Burslem into a regional centre for Northern Soul and Motown. David Jones, director of Shrewsbury-based Sunset Taverns, which also operates The Duke William and Chillz Bar, said: "We have noticed more people being drawn to Burslem for its pubs and that encouraged us to further invest here."

SA Brain reports customer satisfaction up six per cent with Empathica: Cardiff-based brewer and retailer SA Brain has reported a six per cent increase in customer satisfaction levels after employing customer survey firm Empathica a year ago. Natalie O'Rourke, marketing manager at Brains, said: "We wanted to understand views of multiple customers rather than get just an occasional snapshot of our performance. To date, we have received feedback from thousands of Brains pub customers and over the past year alone improved top box satisfaction by six per cent. This is a tremendous achievement for our business and evidence that the focus enabled by the Empathica solution has really helped our locations deliver an excellent experience to our guests".

Copenhagen steakhouse comes to London: Modern American Steak House (MASH), owned by Copenhagen Concepts, is opening in the former Titanic Bar & Grill site in Brewer Street. It’s the first MASH restaurant outside of Denmark. Copenhagen Concepts is the company behind Le Sommelier and UMAMI and was founded by Jesper Boelskifte.

JD Wetherspoon takes over “Britain’s rudest shop”: Managed pub company JD Wetherspoon is to convert the self-styled “Rudest Shop in Britain” into a pub. Linen shop Palfrey and Kemp in Lymington, Hampshire, has become notorious locally for its abrasive owners Terry Palfrey and Geoff Kemp. Customers have found themselves thrown out of the shop or the focus of verbal assaults if they rub them up the wrong way. A sign has been placed in the shop window stating: "Britain's Rudest Shop is Closing Down: after 170 years only a few weeks left to be insulted, don't miss the experience." Wetherspoon overcame 900 objections to win planning consent for conversion of the shop to a pub.

St Jude’s Brewery closes doors: Suffolk-based St Jude’s Brewery has stopped making beer and closed its two pubs. The brewery started making beer in 2006 and opened its first pub in Ipswich in February 2011, with a second following in Felixstowe in December. The brewery is owned by Frank and Colleen Walsh. Frank said: “Beer duty rose again for brewers, supermarkets are going into real ale and people are drinking before they go out.”

Mezze opens third pub site: West Country company Mezze Restaurants has opened its third Mezze-in-the-pub venue. The company has invested £250,000 opening Mezze at The Ship & Castle in Congresbury, North Somerset. Mezze owner Alex Tryfonos said: “We already run two successful Mezze pubs in Downend and Thornbury and are thrilled to be expanding into North Somerset. “We already provide more than 70 jobs in our other restaurants and there will be an extra 30 new full and part-time jobs for Congresbury and the surrounding area. Our recent growth has been self-funded and overall we have invested around £250,000 in the past six weeks revamping the entire pub and creating a new Mediterranean garden.” The garden has seen a £75,000 makeover with new raised decking, herb garden, kids play castle, water features, an outside TV for the Olympics and a new ice cream parlour. Mezze Restaurants also runs Mezze at The Green Dragon and Mezze at The Royal George.

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