Story of the day:
Managed operator TCG reveals Diamond Jubilee trading patterns: Managed operator TCG has revealed that its Tattershall Castle floating boat, moored on the Thames, took around £125,000 in the warm week leading up to Diamond Jubilee week. Nigel Wright, TCG chief operating officer, said: “It was the ideal location to watch the Thames Pageant on Sunday, and even with the poor weather, The Tattershall Castle had a stunning day’s trading, equivalent to a busy New Year’s Eve. On Sunday after the pageant, the busiest trading moved up to Covent Garden and West End, so both Henry’s Café Bars at Piccadilly and Covent Garden, The St James Tavern at Piccadilly Circus and The Comedy near Leicester Square had exceptionally busy evenings. Henry’s Piccadilly saw high levels of trade all weekend, driven by all the activity in Hyde Park and the Mall. Henry’s at West India Quay and Via at Canary Wharf benefited from people staying over for the weekend in hotels, as well as the overspill at the end of the pageant, Our gay businesses in Soho, The Duke of Wellington and Admiral Duncan, both had fantastic weekends culminating in a brilliant Monday evening with Kylie et al in concert.” Wright described trading elsewhere as a “mixed bag” over the weekend. “Sunday and Monday nights were very good in the younger market generally, and there were plenty of people in our venues in the coastal resorts of Newquay and Weymouth. Rendezvous in Weymouth took £60k over Sunday and Monday thanks to a quayside Jubilee music festival which drove very strong sales. Shoppers were out in droves in Portsmouth Gunwharf Quays, which meant Bar 38 in Portsmouth had a record week for the second week in succession.” Wright said trading elsewhere in the estate had been “steady, but unexciting”. He added: “There was loads of activity, such as fetes, and parties, which helped local trade in many venues, but overall the weather seems to have dampened the numbers that were out generally.”
Starbucks adds French bakery to its business: Coffee giant Starbucks has bought San Francisco-based Bay Bread and its La Boulange bakery brand for $100 million in cash. The move will allow Starbucks to add high-quality bakery items to its food offer, which only accounts for 20 per cent of total sales. The bakery café segment has been the best-performing part of the US market in the past year with Panera Bread, segment leader, reporting 20 per cent profit growth for eight of the nine most recent quarters. Starbucks plans to add La Boulange-branded French pastries, croissants, breads and muffins to its in-store range. The company also wants to build La Boulange into a national brand with its own retail outlets across the country, as well as moving into grocery and other channels with branded consumer packaged goods. Howard Schultz, Starbucks’ chief executive, said the company plans to bring the “artistry of the French bakery” to the marketplace in the same way it brought the “romance” of the Italian espresso bar “to virtually every corner of America”. He said: “This is an investment in our core business. After more than 40 years, we will be able to say that we are bakers too. Now is the time to enhance the experience and create differentiation in the marketplace between us and everyone else.” Food sales grew by 14 per cent in each of the first two quarters of the current financial year, Schultz said. Starbucks locations in the San Francisco area will be the first to see La Boulange products in stores by 2013. The company also plans to open flagship La Boulange stores across the US.
UK and Russia are McDonald’s strongest European markets: The UK and Russia are bright spots of McDonald’s performance in Europe, chief executive Don Thompson has told analysts. “The UK and Russia businesses for us are very solid, and consumer confidence [there] seems to be intact, although waning a little bit,” Thompson said. “The southern areas plus Germany are experiencing stronger consumer confidence issues. In France, Germany, Spain and Italy — we have to really plus up our value messaging in those areas.” In France, McDonald’s will focus on its Petite Plaisirs, which is similar to the United States’ Extra Value Menu. By contrast, the company will promote its Uno por Uno — which is like the US Dollar Menu — more aggressively in Spain. Italy is expected to adopt a lower-tier value menu like Spain’s. Thompson said Germany has a stronger competitive set, and the consumer is driven more by value than by brand loyalty.
YO! Sushi starts talks with private equity firms: The Daily Telegraph has reported that YO! Sushi management has begun preliminary meetings with private equity firms over a possible sale next year. YO! Sushi, which is backed by private equity firm Quilvest and headed by industry veteran Robin Rowland, has started talks early as time frames for sales processes have stretched out in the current mergers and acquisitions market. The Telegraph stressed that a formal sales process has not started.
Absolute Pubs aims for double figures: Absolute Pubs, the company set up in 2008 by Simon and Sarah Bailey, is targeting an estate of pubs in double figures after signing for its fourth pub, The Flower Pot in Sunbury, a Brakspear pub that will re-open in August after a £200,000 co-investment. Absolute Pubs currently runs a Punch, a Hall & Woodhouse and a Young’s pub. Simon is a former property surveyor while Sarah worked with people with learning disabilities before gaining experience in the pub trade by spending six months working at a Mitchells & Butlers Premium Country Dining site, The Woolpack in Aylesbury. Simon told Morning Briefing: “We would like to grow the company to double figures, perhaps aiming to open two pubs in 2013.” The most recent opening, Young’s Waggon & Horses in Surbiton has seen the food trade increase ten-fold since it was re-opened in August last year – it’s risen from £400-a-week to £5,500-a-week. Simon added: “All our pubs offer something slightly different. The next one will offer six luxury en-suite bedrooms and a wood-fired pizza oven – it’s hard to find a decent pizza.”
Wye Valley Brewery opens fifth pub this weekend: Wye Valley Brewery will open its fifth pub this Saturday (9 June). The Pelican Inn, on the corner of Pitt Street and St Mary's Street in Gloucester, which dates back to 1679, now boasts an attractive beer garden after a refurbishment. Wye Brewery managing director Vernon Amor said: “We are passionate about pubs, we believe they play an important role in our communities as they are the outlet for our national drink, cask-conditioned beer.”
Pub re-opens as the Cider Works: A pub in Kent has re-opened as a unique pub, shop, restaurant, café, garden centre and cider-pressing centre. The Wedl, family, who previously ran hotels, have invested £700,000 in converting The High & Dry pub in Waldershare into the unique facility. Andrew and Amanda Wedl bought the pub in 2009, a year after buying a small holding in Eastry where they now have a 2,000 tree orchard. Apples from their farm will be pressed at The Cider Works and sold alongside food, craft and drink produce from other local farms and artisans. Andrew said: “We decided to make our own cider and so needed somewhere to sell it so The High and Dry became our project. It has been a long, drawn-out project with building taking two-and-a-half-years.”
Roman Bath Kitchen opens: Searcy’s, which runs The Champagne Bar at London’s St Pancras, has opened the Roman Baths Kitchen, a new restaurant for Bath’s Roman Baths. The Roman Baths Kitchen, in Abbey Church Yard, has been redeveloped by Bath and North East Somerset Council as part of a plan to improve the experience for tourists visiting that part of the city. Rodney Payne, from Searcys, said: "We hope that the space directly outside the Roman Bath's Kitchen will become Bath's equivalent of enjoying coffee in St Mark's Square in Venice.”
Simon French increase Young’s target price: City analyst Simon French, of Panmure Gordon, has increased his target price for London retailer Young’s from 787p to 804p, giving a 27 per cent upside potential on Friday’s share price. French said: “(Thursday’s) update from Fuller's suggests Young's continues to offer superior trading momentum. For the seven weeks to 19 May, Young's reported like-for-like sales growth of minus two per cent compared to the minus 2.3 per cent like-for-like sales growth reported by Fuller's for the eight weeks to 26 May. Bearing in mind Fuller's said the good weather made the eighth week of trading an almost record breaking one we expect Young's eight week trading position to have materially improved. London pubs should trade exceptionally well over the next four months and Young's is our favoured way of capitalising on this backdrop of the Diamond Jubilee, Euro 2012 and the Olympics. Over the medium-term the group is well positioned to make single site or package acquisitions whilst adding bedrooms where appropriate at existing London pubs. With circa 90 per cent of group earnings coming from managed pubs within the M25 we think Young's also has appealing defensive characteristics underpinned by a forecast Net Asset Value per share of 685p reflecting 2012’s property revaluation (excluding a lotting premium).”
Pizza Hut in the US targets sandwich market: Pizza Hut, owned by Yum Brands, has introduced a sandwich called the P’Zolo to its menus in the US in a return to competing with the sandwich segment. The three meat-and-cheese-filled offerings are topped with Asiago cheese and priced at $3 for one or $5 for two, positioning it alongside such competitors as Subway’s $5 foot-long sandwich.
Marston’s shares are tipped: Share picker Graham Spooner, of The Share Centre, has tipped Marston’s shares as a good buy. He said: “We recommend Marston’s for income seekers willing to accept a medium degree of risk, as the yield is attractive and the dividend is well covered with the potential for some growth. Although market conditions remain challenging – the European crisis persists – the Queen’s Jubilee, European Championships, the Olympics and milder weather may be supportive. The business has a strong management track record and we have no reason to suspect it will deviate from its business strategy.”
Scottish family wants to roll-out Chop and Ale house concept: The Davidson family are looking to raise £4m to roll-out four Chop and Ale venues across central Scotland. Anne and Clive Davidson have spent the past 30 years developing the inn. Son Jason said: “The first stage in the development is to expand here in Linlithgow and build a new butchery, which will accommodate space for a delicatessen and we’ll also look to increase our online offering.” The family, which will have a 25 per cent stake in the expanded business, have already secured some investors and Jason said he is confident of raising the rest of the funds. It is believed that US technology investor and golf enthusiast John Imlay is among those already on board.
Tampopo sells Leeds site: Tampopo, the noodles chain that came close to being bought by Mitchells & Butlers, has sold its Leeds site after receiving an offer for the lease. The venue was in need of refurbishment and Tampopo directors decided accepting a premium offer for the lease provided a better return.
Broken Foot Inns acquires fifth site: Broken Foot Inns has bought its fifth site – it paid a premium of £400,000 to buy the lease on The Coach and Horses pub in Greenwich from rank Dowling’s Inc group. The free-of-tie property was assigned on the remainder of a 30 year lease at a passing rent of £100,000 per annum - the landlord for the property is Greenwich Hospital. Broken Foot Inns now operates five pubs, including The Theodore Bull Frog in Charing Cross, and The Three Guineas in Reading. Agent for Broken Foot was Davis Coffer Lyons.
Miroma Leisure buys Nordic Bar: Multi-site operator Miroma Leisure has bought the leasehold interest of the former Nordic Bar in Newman Street, Fitzrovia, London. The 1,500 sq ft property at basement level only, was assigned at a passing rent of £40,000 per annum on a lease expiring in September 2025. Since 2010 Miroma Leisure has operated The Coronet and The Mermaid Theatre, achieving annual revenues of £1m and £2m respectively.
Bank Holiday Weekend catch-up:
Treasury Minister defends duty escalator: Chloe Smith, a Conservative treasury minister, has defended the duty escalator for raising “valuable money during tough times to spend on services such as health and police”. Smith is MP for Norwich North and was taking part in the debate on the trade during the weekend’s City of Ale 2012 festival. She did, however, argue that proposed 40p a unit minimum pricing would benefit pubs. “We want (people) to drink in good, well-run pubs, but we want them to stop buying bad vodka in Asda. That’s the behavioural change we want to see happen.” BBC East presenter David Whiteley told the debate: “Alcohol has become so readily available in supermarkets and is much cheaper. A taxi driver said to me that he takes more people into the city drunk than he takes home.”
New World wines to be hit by minimum pricing: New World wine which have a particularly high alcohol content are set to be among the biggest victims of minimum pricing. According to Neilsen research, Australian wines such as Hardy’s and Lindeman’s face price increases of as much as 40 per cent because of their higher alcohol content.
Professor calls for caffeine content information: A Glasgow university academic has called for more information to be made available for the public on caffeine content of particular coffee drinks. Professor Mike Lean said: “At present there is almost no information on the caffeine contents of the various types of commercially prepared coffees.” He undertook a survey on coffee shops in Glasgow and found the caffeine content in some coffee can be up to six times higher than others.
Greggs boss reveals total focus to overturn pasty tax: The boss of pasty retailer Greggs Ken McKeikan has told The Mail on Sunday of how he cancelled a board meeting to start campaigning when news of the pasty tax filtered through on Budget day. He said: “I had to get as much information as I could. I had to understand what the details were, what the consultation period was – it was so important and became our biggest priority.” The threatened introduction of VAT had, however, made the company much better known. “The story went as far as Australia and America. It seemed to capture a lot of people’s imagination.”
Exchange rate hits booze cruise tipping point: The Financial Times has reported an upswing in boozer cruisers after the one pound to 1.25 Euros tipping point was reached. Majestic sales director in France Alastair Harwood said: “When the exchange rate hit 1.25 Euros it’s a tipping point. Ten Euros equals £8 and the savings become clearer.” P&O Ferries was expecting 140,000 passengers over the four days of the jubilee weekend. There has been a 20 per cent rise in day-trippers using Eurotunnel to buy booze over the past week.
National Restaurant Association (NRA) criticises “hyper-regulation” over large soft drinks: The National Restaurant Association (NRA) has called a proposal by New York Mayor Michael Bloomburg to ban large soft drinks as “hyper-regulation”. The plan would ban sweetened drinks larger than 16 fluid ounces served in restaurants but not grocery or convenience stores. Mayor Bloomberg said he didn't anticipate the change would affect restaurant sales, but suggested that restaurants could charge more for smaller drinks if they saw sales drop. A NRA spokesman said: “There is no silver bullet in America's fight against obesity, and hyper-regulation such as this misplaces responsibility and creates a false sense of accomplishment.”
Disney bans junk food adverts on its TV channels: The US crackdown on products that are perceived to be unhealthy has continued with a decision by Disney to ban adverts for junk food on its TV channels. The plan would prohibit adverts for food and drinks with high calorie counts and high sugar, fat and salt levels. Disney also plans to reduce the amount of salt sold in food at its theme parks by 25 per cent.