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Morning Briefing for pub, restaurant and food wervice operators

Tue 29th May 2012 - Loungers, Wetherspoon and Charnwood

Story of the day:

Warm weather produces record trading: Warm weather over the past week has produced record trading for pubs with good-sized beer gardens. Six-strong TLC Inns, which has five pubs with good-sized outside areas, beat its record for business in a single week with takings of £150,000. The company's venues outperformed the same weekend the previous year, which included a bank holiday, by 20 per cent in like-for-like terms. Boss Steve Haslam told Morning Briefing: “We’re currently trying to get more stock in urgently.” The warm weather created a powerful boost to wet trade at sites like its Cutter in Ely – drinks sales normally account for 40 per cent of business but jumped to 52 per cent of turnover last week. Four-strong Anglian Pub Company boss James Nye said the weather had produced “stonking” trading last week. “All our sites have been struggling to get near last year’s figures in the last six weeks. You start to doubt yourself but last week saw like-for-like uplifts of between 13 and 21 per cent. Lots of people came out to visit the Norfolk coast.” Brain Whiting, of Kent-based Whiting & Hammond, reported like-for-likes up 8.2 per cent compared to last year and 16 per cent up overall with a new site included. “I’d have been happy to be level with last year, which included a bank holiday weekend and a beer festival at The Old Mill worth £12,000 in takings.” 

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:

Robertson joins Energy and Utility Skills Council: The former chief executive of the BII Neil Robertson has become chief executive of the Energy & Utility Skills (EU Skills), the sector skills council (SSC) for the gas, power, waste management and water industries. Robertson led the BII for three years before joining Babcock International as its head of training. EU Skills seeks to ensure it provides authoritative labour market information for its industries and to develop National Occupational Standards (NOS) to ensure that qualifications meet employer needs. Robertson told Morning Briefing: “Unlike the pub sector there is a well-established system of apprenticeships but, like the pub sector, it finds it hard to recruit. My role is similar to the one at the BII in terms of driving standards and training.” EU Skills, which was founded nine years ago, is based in Solihull, Birmingham. “By coincidence, my office is next to Enterprise Inns,” Robertson added. It is understood that Robertson will maintain links with the pub sector, focused particularly on what can be learned from other sectors.

Pasty tax is scrapped: Chancellor George Osborne has done a u-turn on the pasty tax. VAT will be applied to takeaway food being kept hot in heated cabinets but pasties and sausage rolls that are placed on trays to cool down will be exempt. The changes will come into effect in the autumn. MP for Redruth and Camborne George Eustice said: “This will catch what was always the stated target – supermarkets selling rotisserie chickens which they keep hot for hours and sell in foil packaging and then don’t pay VAT.”

Licensed trade consultant starts under-18s e-petition: Licensing consultant Michael Kheng has started an e-petition calling for more police action, under Section 19 of the Licensing Act, in issuing Fixed Penalty Notices to under 18s who attempt to purchase alcohol, or consume alcohol on licensed premises. If the petition receives 100,000 signatures, a debate in the House of Commons is forced.

Company news:

Beds and Bars plans August opening in Barcelona: Beds and Bars, the UK and European hostel provider headed by Keith Knowles, will open a 26 million Euros site in Barcelona in August. The venue will offer 400 beds. Beds and Bars is currently considering a £100m offer to jointly fund expansion into the US, with plans to open in five or six cities within three years.

£2m O2 Academy in Birmingham fails to sell: The O2 Academy in Birmingham failed to sell at an Allsop auction held last week. Current tenant is Hospitality Holdings, a subsidiary of Compass Group, with a sublet to Academy Music Group, which runs 24 venues in the UK, including the 02 Shepherds Bush Empire. The rent payable on the venue is £165,000 per annum and it had a guide price of £2m plus. Also failing to sell at the auction was the freehold of a site in Burnley, Lancashire, let to Walkabout operator Intertain. It had a guide price of between £325,000 and £375,000 with Intertain paying a rent of £41,000 per annum.

Mitchells & Butlers produces O’Neill’s newspaper: Managed operator has launched a quarterly magazine for customers within its 50-strong O'Neill's chain – its titled 'It's all about'. The newspaper is filled with “interesting, funny and newsworthy” stories about O'Neill's and the people that make the brand special. The idea for the newspaper came about following this year's St Patrick's Day celebrations. So many activities and events took place that the brand wanted to capture this passion and show what makes O'Neill's unique. The current edition provides a round-up of St Patrick's Day, the latest food and drink on offer and details of live music taking centre stage at O'Neill's pubs across the UK.

Loungers directors’ buy freehold of pub company tenants for pension fund: Loungers directors Alex Reilley and Dave Reid have bought the freehold of a pub their company tenants in Southampton for their pension fund. The pub was due go under the hammer at an Allsop auction last Friday with a guide price of between £340,000 and £360,000 – Loungers venue on the site, Santo Lounge, holds a 25-year lease with a rent of £33,300 per annum. The pub attracted keen interest prior to the auction and Reilley and Reid paid £448,200 to secure it after several offers were received, which means they will earn a 7.3 per cent yield on their investment. Said Reilley: “We knew the condition of the property is good and we jumped at the chance to buy the freehold. As an investment, we thought it was a good one.” Reilley and Reid already have a freehold of a site the company tenants held within the directors’ pension fund and are in negotiations to buy a third freehold – a site in Bournemouth. 

Ex-Luminar boss Thomas offers more details on Milton Keynes opening: Former boss of Luminar Steve Thomas has provided more details of the trading style of his planned Wonderworld concept in Milton Keynes, due to open on the site of the former Oceania nightclub in August. The venue will divided in two – there will be two nightclub rooms upstairs surrounded by private booths and secret, private rooms, while downstairs is likely to see a more chilled environment. Thomas told the Milton Keynes Citizen: “We want to have the best nightclub in the country. Wonderworld is the first of its kind. It’s not based on ‘Alice in Wonderland’ but from a similar sort of era and setting. I was involved in the setting up of Oceana back in 2002, and I’ve always loved Milton Keynes. We deserve not just the best nightlife, but also the best venue to host things in the town. That’s why we’ve got all the private rooms – for people to have presentations and meeting during the day – and a proper stage for live acts. It will also intrigue a lot of people. There are places to go in the club where you won’t be part of the nightclub crowd but can enjoy a night with your friends. It can appeal to everyone.”

JD Wetherspoon set to sell settlement site: Managed company JD Wetherspoon is in negotiations to sell the group of properties it was given in Sleaford, Lincolnshire in settlement of a fraud case linked to its dispute with former agent Van be Berg. The property includes sites occupied by the former Coop Homemaker and Corn Exchange buildings and neighbouring Indian and Italian restaurants. Wetherspoon spokesman Eddie Gershon said: “Wetherspoon is looking to sell them to another party and not develop the properties themselves.” Wetherspoon was looking to turn the buildings into a pub around 12 years ago but chose to open The Packhorse Inn on neighbouring Northgate instead. Sleaford-based property development company Hodgson and Sons have long had detailed plans approved for the restoration and redevelopment of the site.

Domino’s offers £9.99 carry-out deal: Domino’s Pizza has launched a new national carry-out deal with every pizza priced at £9.99. Simon Wallis, sales and marketing director for Domino’s Pizza, said: “With so many unmissable events taking place over the summer, we wanted to offer customers a fantastic deal and ensure pizza was front of mind for these great social occasions. The national carryout deal will give customers plenty of chance to grab a slice of the action and tuck into a tasty pizza at an even tastier price.”

Douglas Jack – Fuller’s to meet expectations on Thursday: London brewer and retailer Fuller’s should at least meet expectations on Thursday (31 May) when it reports results, according to Numis Securities analyst Douglas Jack. He said: “We expect to at least hold our forecasts, although the acquisition of 29 pubs in 2012 (many of which re-opened late in the 2012 financial year after refurbishment work) and a strong sporting calendar leave 2013 earnings forecast risk on the upside, in our view. Recent like-for-like trading conditions were tough (Young’s was two per cent down) due to weather, but the outlook for the first half of the 2013 financial year should be encouraging. We expect growth to accelerate in 2013 and believe low leverage, strong cash flow (boosted by selling of the 4.5 acre Gales Brewery site for housing) should enable expansion to maintain momentum into 2014.”

ETM Group to hit £22.5m turnover this year: ETM Group, the gastro-pub operator set up by Tom and Ed Martin, is set to hit turnover of £22.5m this year, according to the London Evening Standard. Another site is due to be added to the ten-strong estate, in Canary Wharf, in the next nine months. Tom set the business up in 2000. He said: “I wanted to start my own business, I didn’t want to be an employee any more, and I loved pubs. The time seemed right - I was 28 and didn’t have a wife or kids - and the market seemed right: there were very few pubs doing good food around.”

Charnwood Pub Company reports strong growth: Charnwood Pub Company, the 11-strong pub operator backed by venture capital company Albion Ventures Ventures, has reported Editda growth of 21.7 per cent to £718,000 for the year ended March 2012. Like-for-like sales grew by 4.97 per cent to £4.17m. Daryl Cockerill, managing director at Charnwood Pub Company, said: “We have the right formula in place that will particularly benefit from the big events taking place this year, notably the Jubilee and Olympics”. Wet sales increased 5.9 per cent to £2.87m, food trade rose one per cent to £1.03m, accommodation rose seven per cent to £200,000 and machine trade increased 15 per cent to £70,000. Will Fraser-Allen, deputy managing partner at Albion Ventures, said: “Charnwood’s strong results are a ray of light in an otherwise gloomy environment for pubs in the UK. This shows that smaller, well-run and independently owned pub groups can thrive by giving customers a fantastic experience that keeps them coming back for more.”

Five-strong Flying Kiwi Inns boss develops micro-brewery: Jo Coubrough, who co-owns Flying Kiwi Inns with her husband Chris, has developed her own micro-brewery, Jo’s Norfolk Ales. Jo, a former teacher, found herself just one of three women on a brewing course in Sunderland when she decided to set the micro-brewery up. Her two brews are called Norfolk Kiwi and Bitter Old Bustard. Flying Kiwi Inns operate The Crown Inn at Rudham, The Ship Inn at Brancaster, The Crown Hotel at Wells, The King’s Head at Letheringsett, near Holt, and The White Hart Hotel at Hingham, in south Norfolk. She was helped by grant funding from the Rural Development Programme when she took over a farm building on the Barsham Estate in West Barsham to set the micro brewery up.

New Costa receives 300 applications for 11 jobs: A new Costa opening in Newport received almost 300 applications for four full-time and seven part-time jobs. A spokesperson for Costa said: “Sadly for the past couple of years receiving such a large number of applications has become quite common,” she said.

Orchid Pub Company board signs off four major investments: A board meeting of Orchid Pub Company has signed off four more major investments for the coming year. The Victoria in Cheshunt and The Red Lion in Kidlington are to be turned into Pizza Kitchen and Bar (PKB) sites. The PKB concept is being extended to 25 more Orchid sites after existing sites produced like-for-like growth of ten per cent. Chief executive Rufus Hall has described PKB as a “real genre-buster and a key focus for Orchid in 2012”. New PKB sites will be a mixture of community and high street locations. In addition, the Orchid board signed off plans to convert The Ainsworth Arms in Bury to its carvery format and The Woodside in Leeds will be doubled in size. Chief executive Rufus Hall said: “The builders arrive in August and there’s more to follow.” Meanwhile, Hall, writing his monthly blog, reports that warm weather boosted business. “Sales are tremendous this week and after “Get Set for Summer” we have the best gardens and outside areas in the business full stop,” he wrote. 

Anheuser-Busch InBev searching for new Boddington’s brewer: Anheuser-Busch InBev is looking for a new brewer to brew Boddington’s under contact. This comes after the relocation of existing brewer Hydes. An Anheuser-Busch InBev spokesperson told The Financial Times: “We would like to assure consumers and customers that we are looking at all viable options for future production.” The canned and smooth draft versions of Boddingtons are currently brewed in Samlesbury.

Restaurant group San Carlo to open Chichetti: Ten-strong restaurant group San Carlo is to open a new venue, Chichetti, as part of the redevelopment of St James’s in London by the Crown Estate. Group chairman Carlo Distefano said: “We are expanding rapidly as a group and have been looking for years to find exactly the right place to open a new London flagship restaurant.”

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