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Morning Briefing for pub, restaurant and food wervice operators

Thu 24th May 2012 - St Austell, Whetherby Whaler and Diary

Story of the day:

Shaftesbury reports “great demand” for West End bar and restaurant sites: Property company Shaftesbury, which rents out 216 restaurants, cafes, bars and nightclubs in the West End of London, comprising 497,000 square foot of space, reports leisure uses in the West End are in “great demand”. During the past six months the company’s portfolio has been “virtually fully let” and like-for-like rental income has grown by 3.5 per cent. Chief executive Brian Brickell said: “London’s West End continues to be busy and prosperous. London’s reputation as a destination of world renown continues to grow and this summer’s major events – The Queen’s Diamond Jubilee and the Olympics - will put the city firmly in the world’s spotlight. These events are a unique opportunity for London to promote its many attractions to a global audience.” The company said its property focus on “retail, restaurant, leisure and residential uses, which for the landlord are less prone to long-term obsolescence” results in a low level of capital expenditure and enhanced capital returns. Shaftesbury owns property in clusters – it owns 68 restaurant buildings in Chinatown and eight restaurants in the St Martin’s courtyard development. The company thinks that parts of its estate, most notably shops and restaurants, have reversionary potential of around £15.4m. The company added: “Demand for these uses in London’s West End remains strong and tends not be cyclical, giving us confidence that their current reversions will be realised over a five year review cycle.”

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 (NRA) 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

“The report on the NRA is excellent. I have been going back and forward to the US a lot in the last two years (plus I lived in the US from 1992 to 2000 working in the restaurant business) and your insight is spot on. Thanks for sharing.” 
Alison Vickers
Business Development Director, YO! Sushi

Industry news:

CAMRA top 140,000 members: Real ale consumer group CAMRA has topped the 140,000 members mark. The body has seen membership grow by 12.9 per cent in the last year.

CGA provides figures on segment closures: On-trade market survey company CGA has provided figures on some of the segments within the sector that have been most vibrant in the past year – and those that are suffering the most closures. CGA reports that there are 8.2 branded food openings for every closure, 1.5 café wine bar openings for every closure and 1.1 entertainment venue openings for every closure. The local and community pub sector is “least vibrant” with just one opening for every ten closures.

Panera Bread reports 50 per cent of drive-through sales are incremental: The 1,600 strong Panera Bread brand in the US is building a drive-through option at around 30 per cent of new openings. The company opened its first drive-through seven years ago and now has around 200 of them. Founder Ron Shaich estimates roughly half of Panera's drive-through sales are incremental. He added: “Drive-throughs aren't bad. What's bad is doing them poorly in a mechanised way with processed food. I'm all for giving people access to Panera's good food — not limiting it.”

More than half of top 50 restaurant chains using vouchers: 32 of the top 50 restaurant chains are offering vouchers to diners, according to research by Allegra. A third of diners use discount vouchers when they eat out and a further one in six would stop visiting outlets if vouchers were discontinued.

Consumer watchdog Which? questions supermarket special offers: Consumer champion Which? has found supermarkets are attracting customers with bogus special offers where prices are actually put up rather than down. Which? discovered products sold as “multi-buy” which were more expensive than when bought individually.

Lanson criticised over “Best of British” champagne: English Wine Producers has complained to trading standards officers over bottles of Lanson champagne that are being sold at Gatwick with a full union jack branding and described as “Best of British”. The suggestion is that the French champagne house is trying to cash in on the London Olympics.

Company news:

Young’s reports strong results: London pub operator Young’s has reported pre-tax profit up 17.4 per cent to £21.3m for the 52 weeks to 2 April. Managed pub like-for-likes were up six per cent. The company sold its 40 per cent stake in Wells & Young’s for £15.1m in the year. Chief executive Stephen Goodyear said: “In the face of continued wider economic uncertainty, the group has delivered a strong set of results for the period, whilst driving forward our premium offering. The disposal of our stake in Wells & Young's has allowed us to focus on our core, premium pub strategy and Geronimo Inns - acquired in December 2010 - has been successfully integrated, with both Young's and Geronimo's operations benefitting from the best practice being shared across the combined business. Young's is in very good shape. The start of the year has been affected by the generally dismal weather. Nevertheless sales for the first seven weeks were up 3.9 per cent, but down two per cent on a like-for-like basis. We are excited about the prospects that the Jubilee and Olympic summer will bring. Whilst the economy remains fragile, we believe that, with our focused and high-quality offering, we are well placed to continue to achieve growth.”

St Austell Brewery reports Olympic torch halo effect: Cornish brewer and retailer St Austell has reported that last weekend’s Olympic torch relay through the county produced a substantial boost to business. Marketing director Jeremy Mitchell said: “We had a fantastic weekend with the torch relay. People were standing ten-deep along the route and there was a halo effect for our pubs – lots along the route reported trade had tripled.” Meanwhile, St Austell is due to re-open the historic Three Crowns in Chagford, Devon, next month after a major refurbishment.

Lymestone Brewery set to open first pub: Newcastle-based Lymestone Brewery is set to open its first pub. ‘Lymestone Vaults’ will be based at the former Wine Vaults on Newcastle High Street, which was sold at auction by Enterprise Inns last year. New owner Butters John Bee has taken on the front of the building and will be letting the rest of the building to Lymestone as a pub in the wake of a premises licence being granted by Newcastle Borough Council.

Whetherby Whaler Group re-opens landmark Harry Ramsden’s site: The Whetherby Whaler group has invested £500,000 on re-opening the iconic first-ever Harry Ramden’s site in Guiseley. The investment has seen the recreation of the original look of the building, including chandeliers and a piano – with the name changed to Wetherby Whaler. The site was opened by Harry Ramsden’s daughter Shirley Dillon. “You have followed in his footsteps and done things the way he did,” said Mrs Dillon, who had travelled from Ireland for the event. “He was a perfectionist.” Wetherby Whaler group has branches in Wetherby, Pudsey, York and Wakefield.

Mitchells & Butlers provides brand count numbers: Mitchells & Butlers has provided a list of the current size of its major brands. In size order, brand numbers are: Vintage Inns (233); Sizzling Pub Company (220); Harvester (200); Toby Carvery (143); Ember Inns (130); Crown Carveries (119); Metropolitan Professionals (97); Premium County Dining and Nicholson’s (both 81); Town Centre and Community (76); O’Neill’s (50); All Bar One (47); Alex (40); Miller & Carter (26) and Browns (25). The four brands with the highest spend-per-head on food are in descending order: Premium County Dining, Browns, Miller & Carter and Vintage Inns. 

Sushisamba to open in London: Sushisamba, the US fusion chain with four sites in the US, is to open in London’s Heron Tower in July. It will feature an open kitchen and a robata grill. The concept is an unusual mix of Japanese, Brazilian and Peruvian food. Morgan & Drake also operates a venue in The Heron Tower, The Drift.

Wells & Young’s to lose marketing director: The highly regarded marketing director of Wells and Young’s Chris Lewis is to leave next week to set up his own consultancy. Lewis, who has overseen the current Bombardier television advertising campaign featuring Rik Mayall, said: “It's never easy to leave a company where you have so much time and respect for the people and the brands, but there comes a point where you know the time is right to seek out new challenges. I'm very proud of my achievements at Wells & Young's and leave the business and the marketing output in great shape.”

Factory Leisure to open Wakefield nightclub this summer: Factory Leisure is to open a 1,000 capacity nightclub in Wakefield this summer. The club will be allowed to serve alcohol, play music and show films until 3am and to put on special under-age nights for children aged between 13 and 17. The application to open the venue overcame police objections to open.

JD Wetherspoon targets Cornish town of Liskeard: JD Wetherspoon is lining up an opening in the Cornish town of Liskeard, which has a population of 8,656. The company is expected to exchange lease contracts within 14 days to move onto the Taylor's Garage site in the town centre. The landlord wants to knock down the existing building, develop the shell and hand it over to Wetherspoon to build a pub.

SA Brain plans 30 more coffee shops: Cardiff-based brewer and retailer is planning to open 30 more additions to the Coffee #1 brand it acquired last year. In autumn 2011, Brains bought Coffee #1, which comprised 15 high street shops in south Wales and the south west of England, and since then, it has opened three more. Brains chief executive Scott Waddington said: “The research suggests that the coffee market is going to continue to grow at five, six or seven per cent for the next five years, which is pretty much what it's been doing for the last five years. Coffee in the UK, despite more and more places opening, still has a long way to go to catch up with more developed markets, like the US.”

Enterprise Inns makes last-ditch offer at a Gloucestershire pub: Enterprise Inns has managed to retain a licensee working out the last weeks of a 20-year lease after making him a better offer to operate it. Licensee Nick Green said: “It looked like my time here was coming to an end because the end of the lease is a natural time to consider my future. But they came back to me with an offer to stay on and, all being well with a few sums, it looks like I'll be staying. I'll be pleased to be able to stay on and it's good news that they have made a better offer because we need one to keep going.”

Farrell Bars closes site four months after opening it: Farrell Bars has close its Manitoba venue in Burton less than four months after opening it. Company secretary Patrick Fitzjohn said: “We have made the difficult decision to close the venue due to the current economic climate, confirmed with the recent announcement of a double-dip recession. “This is combined with more people from Burton commuting for their nights out to Derby and Tamworth, where the choice of venues is greater.” Manitoba was formerly a Yates’s.

Morning Briefing Diary:

The cycle of life: Marston’s finance director Andrew Andrea reports that the fragmented UK planning process is leading to a degree of delay with new sites – and around £200,000 per site of extra cost. Part of the cost comes down to meeting the “pecadilloes” of each planning authority. Increasingly costly, in particular, is forking out to oblige an “environmental compliance” agenda. An extremely popular demand right now, reports Andrea, is to install bike racks at new pubs to reassure planners that a proportion of staff “can cycle to work”.

M&B taps into the wisdom of the ages: Executive chairman Bob Ivell has been keen to free the company’s pub managers from the yoke of excessive and meddlesome head office diktats. The new plan is to trust them to get on with the job a bit more. For philosophical underpinning for this radical new strategy, Ivell has found support from the 1912 Mitchells & Butlers manager’s handbook, couched in slightly archaic language, which he duly showed to City analysts last Friday. The 1912 handbook states: “We feel how absurd it would be to subject managers to hard-and-fast rules for all circumstances; rules which might fail, and more than likely would fail, just at the most awkward moment. We prefer to leave it to our managers, who are on the spot, and who are selected for their appointments as much for their general intelligence and tact as for their honesty and previous good character – to make a special study of the nature of the trade done at their houses and of the particular tastes and habits of their customers; and we expect them to deal with these matters in a tactful and business-like manner. We are always glad to assist managers in the conduct of their houses, and pleased to be consulted by them.” The trick, Diary supposes, is to find even older company handbooks to harvest even more basic common sense.

The upside of a worsening economy: As the economy bumps along the bottom and anxiety increases that the Euro crisis creates even more downside risk, is there any comfort the sector can take? Step forward sunny optimist Robin Rowland, boss of YO! Sushi. He tells Diary that he thinks the worsening situation could be good news for the sector’s VAT campaign. “Paradoxically”, he argues, the worse the economy, the campaign’s chances “gets more likely as a stimulant”. It’s a thought.

The power of Twitter: The team at groovy café bar concept Loungers are particularly regular users of Twitter – and it can save a whole heap of messing around when it comes to sourcing key supplies for new sites. The other morning, for example, came an urgent request from the Loungers team to its followers to help source, er, net curtains for its new opening in Wylde Green, Birmingham yesterday. Within two hours a solution had duly arrived: “Thank you Twitter peeps for all of the net curtains recommendations.” Phew!

London versus Chicago – the debate rages: A lively debate has centred around whether service is better in US or the UK. Morning Briefing editor Paul Charity has argued for US, while Elliott Marketing and PR boss Ann Elliott has made the case for London. Now former Mitchells & Butlers restaurant boss and current Restaurant Group non-executive Tony Hughes has come down firmly on the side of the UK. Congratulating Ann Elliott on her opinion piece in last Friday’s Morning Briefing, Hughes points out: “You have caught the big factor that has changed over the last 10 years between the UK and the US - 'genuine hospitality' in the UK rather than the 'service process' in the US.”

Don’t believe everything your regulars tell you: Our special free report on the US restaurant scene, sponsored by CPL Training and produced in association with the ALMR, has been hugely popular with very large numbers of operators asking for a copy. It contains a number of provocative “soundbites” from leading US industry operators. Diary particularly likes the thoughts of former Whitbread staffer and current Carlson Worldwide Restaurants chief operating officer Ricky Richardson on the dangers of feedback from your regulars: “They are going to be very honest with you but you have to be very careful how you interpret this data as they are high frequency guests who are pretty much going to like everything you do.”

JD Wetherspoon turns to white van man: With pubs across London facing restricted delivery times during the Olympics, JD Wetherspoon has drawn up its own contingency plan. According to The Financial Times, the company has availed itself of a “small van” ready to spring into action if all else fails. “My concern is that if any sites did trade more than we’re expecting them to, they might not be able to wait [until midnight] – they might run out of stock,” said Miles Slade, Wetherspoon’s deputy director of operations. Who’d bet against founder Tim Martin behind the wheel?

TLC Inns nears full set of television locations: For TLC Inns, the award-winning Essex-based company headed by Steve Haslam and Jo Drain, the days seem to be filled with perpetual calls of “Lights, Camera, Action”. Their White Horse, Ramsden Heath and Grand Central, Basildon sites are currently being used as locations for low-rent reality TV show “The Only Way is Essex”. Meanwhile, The Cutter in Ely has been used for filming of Saturday night date show “Take Me Out” and their Windmill in Peterborough has had a film crew shooting scenes for “Come Dine with Me”. As boss Steve Haslam tells Diary: “Everywhere we turn there’s film crews.” Nice problem to have. 

Olympic spirit turning sour: There have been reports of heavy-handed action by Olympics organisers over anybody linking themselves to the games – and hoping to gain commercial advantage. Down in deepest Cornwall, St Austell marketing director Jeremy Mitchell reports that organisers were all over the company “like a rash” after a licensee popped an A-Board outside his premises advertising an Olympic breakfast. Come on Olympics organisers, lighten up!

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