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Morning Briefing for pub, restaurant and food wervice operators

Fri 1st Jun 2012 - Bulldog Hotel Group, May trade and Friday Opinion

Story of the day:

Bulldog Hotel Group re-opens “new generation” coaching inn after £1.3m investment: Bulldog Hotel Group, the six-strong coaching inn operator led by Kevin Charity, has re-opened the historic Talbot in Oundle, Northamptonshire, as a “new generation” coaching inn after a £1.3m investment. The company acquired The Talbot from Greene King in 2009 and spent two years getting the necessary planning consents to completely re-model the Grade One-listed venue. It re-opened today, after an eight-month refurbishment, as a radical re-invention of the coaching inn with an offer that combines quality bedrooms and a mix of elements of pub, restaurant and coffee shop – the venue has a Pattiserie Valerie-style serving counter that offers made-on-the-premises cakes, muffins, Danishes and other pastries. Charity said: “The Talbot is now a coaching inn, eating house and coffee shop all in one. This particular venue has been in gentle decline for 20 years. But we think our investment puts it at the leading edge with a much wider, more flexible offer. The Talbot investment reflects our belief that coaching inns and pubs need to evolve to offer more across the dayparts. The business now has all sorts of facets to appeal to all sorts of people.” The Talbot has re-opened with 35 bedrooms, down from its previous figure of 40 after the creation of a number of larger suites. Bulldog Hotel Group changed its name from Bulldog Pub Company in February this year to reflect its current emphasis – it sold its wet-led pubs four years ago. Bulldog is planning to buy a seventh freehold coaching inn later this year. The company’s Greensleep booking portal, which pledges to plant a tree for every room booked, has now planted 50,000 trees. 

Fuller’s focus: five things worth knowing from the results:

Trading has become weather dependent: Group managing director Simon Emeny said he thought trading has become increasingly weather dependent since the smoking ban. The company reported like-for-like sales decreased by 2.3 per cent in the eight weeks to 23 May, largely because of the wet weather. Emeny said the company's country pubs – 50 per cent of the estate is outside London – has been particularly badly hit by torrential conditions in the month. “I’ve never known an April like it,” he said. But he also believes that habitual pub-users have been increasingly replaced by occasion-focused consumers, who will make a choice influenced by the weather.

Digital and food adds manpower: Fuller’s has recruited its first two members of staff to work on digital marketing and added to its food development team – it now has ten staff working on menu development compared to half that number three years ago.

The Parcel Yard in King’s Cross beats sales targets: Fuller’s opened the largest train station pub in the UK in King’s Cross, The Parcel Yard, three months ago and it has beaten turnover targets every week since. The company has ten real ale handpulls and cask ale barrelage is expected to hit around 1,000 brewers' barrels for the whole year – cask ale is more than 50 per cent of total beer sales. 

Fuller’s invests £4.8m in Stratford-upon-Avon: The company has invested £2.8m on a refurbishment of the 41-bedroom Grade II listed White Swan Hotel in Stratford-upon-Avon, a site it acquired from Pebble Hotels for £2m. “It needed a lot of capital but we like to invest for the long-term,” said Emeny.

Olympics to give London “a heck of a boost”: Emeny reported that in excess of 75 per cent of the company’s bedrooms had been pre-booked for the Olympics since the start of the year. He said: “The Olympics are going to be so exciting and will give London a heck of a boost.”

How was trade in May?

Dire start hinders Ever So Sensible: East Midlands’ operator Ever So Sensible reported like-for-like sales compared with the previous May were “just about level”. Managing director Chris Bulaitis said: “Trade in the first two weeks of the month continued the trend of most of April, which was dire, but we are very pleased with the last two weeks.” Nottingham-based Ever So Sensible runs 11 sites – four bistros under Le Mistral brand name, three high-street bars and four traditional pubs serving food and specialising in cask ale and wine. Bulaitis said takings at sites with an outside area were down slightly during the month because of the initial poor weather, but the rest of the estate “did well” and helped restore turnover to last May’s figures.

Foodies and ale drinkers flock to Food Club: Nick Beardsley, founder of Gloucestershire destination pub operator Food Club, said sales across the six-strong estate were up between eight per cent and ten per cent, compared with May 2011. Beardsley said some units weren’t overly affected when the weather was bad at the beginning of the month, but when the fine weather returned, others were packed. Beardsley said several of the units were so busy, extra beers and drinks had to be transferred from other Food Club outlets to meet demand. Beardsley said the entire estate is geared up for a massive boost to trade over the four-day Jubilee celebrations. “I’ve placed our biggest beer order since the start of the recession and the biggest since we started trading (in 1993).”

A month of two halves at Thorley Taverns: Operators director Philip Thorley said May was akin to a football match – a game of two halves that started poorly and finished brightly. The good weather in the latter half of the month led to 22 of the company’s 24 sites reporting sales were up on May 2011. Thorley said takings were also boosted by the epic finale to the Premiership football season, Chelsea winning the European Champions League final and West Ham winning the Championship play-off final. “The football matches have been good for business. We’ve got more West Ham supporters in Margate and Ramsgate than Blackpool fans, so that helped.” He said the good weather had attracted DFLs (down from London visitors) who had come for a day trip to the coast.

Football helps lift All Our Bars: Chief executive Paul Wigham reported takings were “pretty flat for the first half of the month, but were marginally better last week”. Compared with the disastrous impact on trade last month of having the wettest April on record, Wigham said: “We’ll take that – anything that’s an improvement on last month is welcome.” Like Thorley Taverns, All Our Bars prospered from televised sport. “We are very football-based and even the Wembley play-off finals helped business.” The estate mainly comprises sports and community pubs and not many outlets have a beer garden and therefore the good weather didn’t unduly increase trade. “We are not garden-based and unpredictable weather is usually better for us.” Wigham is not predicting a surge in trade over the forthcoming Jubilee and double Bank Holiday weekend. “I’m not expecting it to be fabulous because I think many people will take an extra three days holiday and go away for a week.” He does think the impending Euro 2012 with England and Ireland competing “will be very good for us”.

BCTI back on track after wet April: Angus McMeeking, founder of Black Country Traditional Inns (BCTI), said: “Trade has been broadly okay and a complete reversal of fortunes in April. We are back on the right track.” BCTI runs 27 community pubs and specialises in real ale. The majority of the pubs do not benefit from having an appreciable outside space or a beer garden. “We don’t seem to be affected over much if the weather is good or bad because most of our customers live locally and use the pubs come rain or shine.” McMeeking forecasts the Jubilee weekend will be good for business. “A lot of our pubs are putting on special events. It should be a spectacular weekend takings-wise and spectacular enjoyment-wise.”

Late rush in trade helps C2 Investments: Matt Jackson, co-founder of Lancaster-based operator C2 Investments, said May produced a mixed bag of results at its four outlets. He said the very difficult trading conditions experienced in April were replaced by an overall improvement later in the month, particularly for week-ending 26 May, which cancelled out some disappointing figures in the previous weeks. The Mill, a pub restaurant in Ulverston, showed a 16 per cent increase in like-for-likes compared with the same period in 2011, followed by a 15 per cent rise at The Duke of Edinburgh hotel in Barrow, 12 per cent increase at The Palatine real ale house in Morecambe and a four per cent increase at The Sun hotel and bar in Lancaster. Jackson said the fine weather obviously had a beneficial effect on trade especially attracting people to go out for a meal and a drink. Jackson was not confident about the Jubilee celebrations’ affect on trade. “I hate to think what the consequence will be of people having barbecues at home or going to the street parties. I say: ‘God bless the Queen, but look what she is doing to our trade’.”

Good in parts in the North-East: Head of Steam’s founder Tony Brookes reported a welcome increase in business following April’s wash-out figures. “May has been much better and the last week was brilliant and a couple of our pubs broke all records.” The company runs eight managed houses and one tenanted operation in the North-East, Yorkshire and Merseyside. He said: “Only a couple of our pubs have an outdoor area and none have a beer garden.” Brookes said the lack of an outdoor trading area affected takings at some venues when the weather was bad while others appeared immune. “Although the pubs are in town and city centres, some do better when the sun shines and others are empty.” Brookes said the Queen’s jubilee celebrations weren’t likely to get the tills ringing. “We’re not Royalists up here and aren’t really bothered. A couple of pubs have put up flags, but that is about it.”

Bravo reports five per cent boost thanks to football and footfall: Ken Buckley, founder and managing director of Bravo Inns, said the last week of the football season was a money-spinner for the North-West operator. “Like-for-like sales showed a five per cent growth compared with last year and we were the busiest since New Year’s week.” He credited the weather in helping increase takings despite the fact that “not many of our pubs have beer gardens”. Bravo has 28 sites and concentrates on community wet-led pubs that are geared heavily towards sports. Trade veteran Buckley said: “We have a fairly consistent business whatever the weather. And I think the Jubilee weekend, Euro 2012, and the Olympics will bring positive news.”

Good weather is bad news for Bassett Pubs: South Wales and West Country town and city community pub operator JW Bassett Pubs suffered because of the good weather. Founder Jon Bassett said: “We experienced the complete opposite to most people when the weather improved. We were up between five per cent and six per cent on last year until the last two weeks when it got hotter. Most of our venues are town-centre pubs and people decided to have BBQs at home rather than venture out.” He is less than optimistic about the Jubilee weekend. “The four days will probably bring in the same (takings) as a normal weekend because people will spread out their spending over four days rather than two.” Bassett hoped the Euros 2012 and Olympics will capture the public’s imagination and put bums on seats.

Good but unpredictable report Salisbury Pubs: Hertfordshire-based village pub and food destination operator Salisbury Pubs reported the good weather had helped business. Co-founder Becky Salisbury said: “The glorious weather helped, but there is evidence of unpredictability because people are saving up for the Jubilee weekend celebrations.” She said like-for-like comparisons between this May and May 2011 didn’t reflect fully the trading patterns. “When the weather is good, we’re fine.” But she said that it is difficult to analyse over the complete month and make comparisons. “The weather in May last year wasn’t too bad, so it is hard to compare like-for-likes.” Salisbury Pubs isn’t going to make hay over the Jubilee celebrations. Salisbury said: “We are not going to go into competition with the events that the villages have arranged. We are the support mechanism for what they do.”

Friday Opinion:

Subjects: The future of pub retailing and lessons from Bill Clinton
Authors: Paul Charity, Ann Elliott

The pub offer is evolving says Paul Charity: There was an interesting debating point at last month’s ALMR 20th anniversary conference – what’s the future of the pub? The three luminaries on the panel - M&B’s Bob Ivell, Wetherspoon’s Tim Martin and Stonegate’s Ian Payne – agreed that the pub will have retained its resonance as a particular type of offer in 20 years’ time. For sure, the physical environment of the average pub building, combined with the likelihood of the retention of an above-average wet element, will be enough to maintain a recognisable and distinct genre of eating and drinking out offer. But I also think that much will have evolved within two decades. Right now, there is a strong tide of hybridisation afoot – a lot of evolution aimed squarely at breaking into new day-parts. There’s the evolution of breakfast offers (and opening earlier), broadened and improved coffee offers, the introduction of afternoon offers focused on affordable treats, experiments with takeaway and up-skilling and a re-focus on high-quality street food such as pizza. They are all themes sure to be enlarged upon in the coming years. There are some very impressive examples out there of all these things being done exceptionally well and I thought it’s worth listing my Top Ten (in no particular order).

1. Orchid’s Pizza Kitchen Bar: High-quality pizza meets pub environment with a fresh dough promise. Orchid’s main expansion focus combines genre-busting pizzeria quality “pies” and a pubby environment.

2. Sports Bar & Grill: Former Sport Café executive David Evans provides “better burger” quality with a great drinks range and a well-delivered sports fix at transport hubs. (See also Restaurant Group’s Coast to Coast in Brighton Marina for how a live sports offer can be intregrated seamlessly into an eating environment). 

3. Fuller’s Tokenhouse: A radical reinvention of a former Bluu owned by Marston’s delivers the offer back into recognisably pub territory but updates design with clever retro touches and sets up foodie cues with an open kitchen. A great example of accessible premiumisation.

4. Greene King’s Hungry Horse: Proof positive that the pub can play an enormous part in the family dining market by combining great-value food and the right, up-dated environment. See also Greene King’s Cloverleaf chain for evidence that super-sizing premises (and bountiful head-turning desserts) can capture enormous volumes.

5. SSP’s Charing Cross Beer House: Beer, in all its glorious variety, is the hero. A tiny site given fresh appeal by an exciting global beer range and a bang-on but stripped back food offer.

6. Mitchells & Butlers’ Harvester chain: Proof that a jaded offer can be completely re-invented and made modern by logical thinking and judicious evolution. As healthy eating becomes more of a consumer focus, lo and behold Harvester discovers it couldn’t be more contemporary with grilled food and a salad cart. Also worth a mention is the first proper industry foray into takeaway, with the right packaging and marketing in place.

7. Stonegate Pub Company’s Red Lion in Wednesfield: Folks will always need a local, right? But the local will need to offer more. Stonegate’s Red Lion offers a personal computer for its customers to use – and much more besides.

8. Richard and Loren Pope’s Bull’s Head, Repton: Spirit Pub Company’s chief executive Mike Tye has called the Popes single site a “brand”. What’s he talking about? Well, visit and you’ll see. From the high quality pizza to service done just right and points-of-difference galore, it’s a template for what a supremely-well-rounded pub offer looks like.

9. Gary Downham’s Hare at Roxwell: First time pub operator Gary Downham applies ideas from the US at his Punch Taverns pub to tap into the affordable treats market by creating a top-class cheesecake offer (borrowed and tweaked from The Cheesecake Factory) and creates an obvious point-of-difference by partnering a local brewer to create his own beer.

10. Dave Carr’s Brandling Villa, Gosforth: From taking £275 on one Friday afternoon when he first arrived at his pub three years ago to taking £16,000 on the same calendar day this year, Carr shows the industry how it’s done. Among the innovations - housing a micro-brewer in his basement producing short order one-off beers, to a sausage festival on a scale, movie showings and comedy nights. Carr proves the point that people like to gather – especially if you give them a reason (or six).

I’d very much like to hear your nominations for pubs and companies that are retailing exceptionally well. E-mail 
Paul Charity is managing director of Propel Info

What Bill Clinton can teach us by Ann Elliott: Bill Clinton (or William Jefferson Blythe, III to give him his full name before he changed his surname to Clinton) does nothing for me. I don’t find him sexually alluring, magnetic or irresistible. His renowned charisma wasn’t the reason I queued for over an hour and then waited for another hour in an airless Chicago auditorium to hear him speak. Quite simply it was a chance of a lifetime to see a great orator in public and to hear what he had to say. The queues to see him went round the block and almost back again- none of us knew if we were queuing in vain or not. It was stifling hot but the crowd were pretty patient and good humoured, proudly displaying their NRA badges in a united show of brotherhood and bonhomie. It was nice to belong to something during that turgid time as my ALMR colleagues, who had previously said they wanted to see him, buggered off to the bar show and left me to battle the boredom of the queue on my own. They did come skidding back to see him when I texted that there were seats but to no avail- the entry doors were firmly shut to those doubting Thomas’s. There was a very definite air of palpable excitement during the build-up when the band had to play for what seemed like an eternity (to them and the audience) waiting for him to arrive. Chicago airport had been closed due to a thunderstorm and after circling for a while they decided to land at a nearby airport and drive to the NRA. A good enough excuse I thought and better than most I hear for tardiness. The moment he appeared on stage the iPads were out taking pictures in unison. He received a rapturous welcome. As Wiki says: “As president, Clinton presided over the longest period of peacetime economic expansion in American history.” He is very very very popular and seemingly left office with the highest end-of-office approval rating of any U.S. president since World War II. He began by saying that, now he wasn’t President he could say what he liked, but now he wasn’t President no one was interested in what he was saying. His style was somewhat laconic, quite self-deprecating and professionally paced. I found, at one point, that I was holding my breath when he waited so long to finish a sentence. His pauses were certainly dramatic - no chance to fall asleep during his watch. His sense of humour was much in evidence but I sensed it might have left him if any of the Q and A’s were about ‘that dress’. In the end the Q and A’s were far too deferential and reverential to provide any challenge or provoke any response – his political skills would have drowned any such attempt anyway I suspect. All well and good but one might ask ‘What relevance does this have to our industry?’ The answer came when he spoke about his focus on reducing American childhood obesity driven largely by the proliferation of high calorie, sugar laden, high serving, easily accessible soft drinks in schools. He fervently believed that legislation would have achieved little. Instead he personally encouraged all the manufacturers to work in unison to reduce sugar content, calories and serving size. This collaborative approach has had a significant impact at school level and soft drink companies now specifically advertise the work they have done to improve the situation in schools. The government might do well to take note of his approach when they talk about wanting to limit the impact of alcohol consumption – carrot not stick seems to have worked for Bill Clinton.
Ann Elliott is chief executive of Elliott Marketing & PR

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