Story of the day:
Innventure introduces classic coffee and cake shop at new Saffron Walden site: Innventure, the company headed by former senior Mitchells & Butlers executive Chris Gerard, has opened a classic English tea, coffee and cake shop at its latest venue, The Cross Keys in Saffron Walden, its sixth pub. The Cross Keys, a Charles Wells pub that has undergone a £600,000 refurbishment, re-opened on Saturday. It revives a piece of Saffron Walden history with the creation of Molly’s Coffee & Cake Shop on the premises – in the 1960s part of the Cross Keys site was occupied by Molly’s Candy Shop. General manager Alison Oliver said: “We believe that Saffron Walden was missing a really high quality, accessible but sophisticated coffee and cake shop. After a fair bit of research we were delighted to discover that part of The Cross Keys was occupied by Molly’s Candy Shop in the past so it seemed a nice piece of historical symmetry to revive the name.” Molly’s Coffee & Cake Shop, served by a separate entrance, opens for breakfast at 7am, with a full range of cooked English breakfast, muffins, pastries and classic breakfast items like eggs Benedict on offer. The venue serves smoothies, English tea and quality coffee later in the day, supplemented by hand-made classic English sponge cakes and a choice of six English and six American cheesecakes.
Propel Opinion: Chris Gerard oversaw the conception and roll-out of Vintage Inns during his time at Mitchells & Butlers. He now runs six top-class pubs and has cleverly combined a number of offers at his latest site – high quality bedrooms, modern re-make of a classic pub environment and a characterful coffee shop offer. It’s clever stuff.
Luke Johnson – sector attracting high-flyers: Risk Capital Partners boss Luke Johnson, who built up PizzaExpress in the 1990s and currently has stakes in Giraffe and Pattiserie Valerie, has argued the sector is attracting “ever more academic high-flyers”. Writing in Management Today, he notes: “Traditionally, restaurateurs worked their way up from waiting tables or the kitchen; many were immigrants with little formal education but plenty of ambition. Nowadays, every Mexican food concept or gourmet coffee shop is being started by a recent Oxbridge graduate or a highly qualified refugee from the City. Until fairly recently, such members of the elite went into management consulting or to work at investment banks or with hedge funds. These days, it seems, even at the prestigious business schools, the cool thing to do is create a catering concern. As someone who has spent more than two decades in the hospitality industry, I applaud this trend. Food and drink remain fragmented, growing markets, where the major companies tend to be weak at innovation. Thus there are always opportunities for those bold and hard-working enough to take the plunge. Even if such start-ups represent further competition for my various eating-out investments, I'm pleased that the profession is attracting such talent.” Meanwhile Johnson suggests that there is renewed activity in the mergers and acquisitions part of the market. He said: “It appears deal season is upon us. I have been busier pursuing possible investments in recent weeks than for a long time.”
Financial Times highlights industry VAT campaign: The Financial Times has highlighted the industry campaign led by French campaigner Jacques Borel to reduce VAT to five per cent. The FT reported: “An octogenarian French resistance fighter who introduced the hamburger into the homeland of haute cuisine has become the face of the British restaurant and pub sector’s efforts to persuade the government to cut value added tax. Jacques Borel says growth and jobs are at the heart of why more than 30 pubs and restaurant chains ranging from brewer Fuller, Smith and Turner to Pizza Hut have backed him.” Borel told the FT’s Christopher Thompson: “My lobbying has to be intensive, around 100 visits a month to civil servants and ministers – if you don’t commit the time, they don’t listen to you. At the beginning, you’re just selling yourself, persuading them you’re serious – then the real negotiations start.”
Subway franchisee advocates VAT protest: A Subway franchisee in Exeter, Devon is urging fellow outlets to mount a protest against VAT being charged on hot sandwiches. Harry Brown has suggested that toasted sandwiches should be re-named “hot bread pasties”. He said: “The government should treat sarnies the same as savouries – it’s time to toast the tax entirely.”
Cambridge City Council moves to protect pubs: The local authority in Cambridge is to adopt tough new measures to protect its dwindling pub stock. The city has lost 20 pubs in the past five years and now has the second highest population to pub ratio in the UK - one pub per 824 people. New rules will be adopted that will only allow redevelopment when a property has been unsuccessfully marketed as a pub for 12 months, when “all reasonable efforts” have been made to preserve the facility, when adequate alternatives are nearby, and when it has been demonstrated the community no longer needs the pub.
NHS reports “long-term downward trend” in alcohol consumption: The NHS Information Centre has reported a three per cent drop in alcohol-related admissions in the past year. It also stated that the number of men and women who admitted drinking alcohol in the previous week is down. Drinkaware’s Chris Sorek said: “It is encouraging to see green shoots of behaviour change (but) much more needs to be done to help people make healthier choices about alcohol.”
Former BII Licensee of the Year buys second site; plans ten: Darren Lingley, who runs the freehold Eight Bells in Colne Engaine, Essex and was voted the UK’s best licensee last year, has bought his second pub. He has acquired the freehold of The Lion in Earls Colne, a freehold pub previously owned by Punch Taverns. The pub is three-quarters of a mile from his first pub and will re-open mid-October after a £140,000 refurbishment. Lingley will create a completely different offer at his second pub, with a central wood-fired oven. It will be used for a wide range of purposes, including a core flatbread menu offer but also for baking bread to eat on the premises and for customers to pop in and buy. It is understood that Lingley is eyeing a third pub acquisition. He told Morning Briefing: “We’d like to be running ten sites within five years.”
Yummy Pub Company launches Ssshh Supper Club: Yummy Pub Company, the three-strong multiple led by Anthony Pender and Tim Foster, launched its Ssshh Supper Club last night. The venue is located above its Somers Town Coffee House, in London’s Chalton Street, near Euston Station. The company has converted the unused upstairs part of the venue into series of dining and meeting rooms – and will run the Supper Club as a separate business.
Propel Opinion: Yummy’s Ssshh Supper Club breaks new ground in creating a different kind of dining and meeting space. The Supper Club, which is entered through a secret door disguised as a bookcase, has been launched on the back of a three-week viral marketing campaign. The venue offers superlative design standards with four different types of meeting and dining room, with varying sizes and styles, including a funky kitchen-style space. Overall design quality is reminiscent of Drake & Morgan’s eye-catching City of London venues with an emphasis on the unconventional.
Ask co-founder takes on joint Tasty chief executive role: Serial restaurant entrepreneur Sam Kaye, who jointly founded the Ask business, has become the joint chief executive of AIM-listed Tasty, which operates the Dim T and Wildwood brands. He will run the company alongside existing chief executive Jonny Plant. Last month, the company unveiled a new £2.5m, three-year revolving bank facility.
Starbucks provides more detail on UK performance: Starbucks has filed accounts at Companies House that provide more detail on its UK performance. The company saw turnover virtually static at £397.716m for the 12 months to 2 October 2011 – it was £396.288m the year before. The company has 607 directly managed sites - a net increase of six during the year - and had 128 licensed stores. Starbucks lost £32.8m after tax compared to £34.2m the year before – the loss came after royalties and licence fees of £25.7m were paid (compared to £25.2m the year before). Cost-saving initiatives resulted in gross margins rising by 19.4 per cent to 19.7 per cent. However, the operating margin worsened from minus 6.5 per cent to minus 7.2 per cent. The company stated: “These accounts reflect a period in which comparable (like-for-like store sales) continued to grow across the year as customers responded to a number of innovations, new products and continuing investment in store refurbishments across the estate. The number of drive-through stores also increased to eight and the success of this new format has encouraged further growth in this area.” Starbucks said the number of sites had remained broadly similar as it exited unprofitable sites. It added: “These closures added costs to the business but were necessary for its long-term health.” Starbucks is selling Oxford Street sites in favour of opening in less expensive side-street locations. It is also refurbishing 70 sites in London ahead of the Olympics. It has 8,763 UK employees.
Former Greene King licensees offer to “bury the hatchet”: Highly rated former Greene King licensees Dominic McCarten and Tony Leonard have written to the company’s chief executive Rooney Anand offering to “bury the hatchet” and return to a pub they left after a rent dispute. The pair ran the former Hop Poles in Brighton for 12 years but surrendered the lease after rent climbed to £79,000 plus ten per cent of turnover of £600,000 per annum at the site –they were losing around £50,000 per annum at the venue. The pub was taken over by Martin Hayes who re-branded it as a Cask Pub & Kitchen venue. It is understood that Hayes is moving his brand to another site in Brighton. Dominic McCarten said: “Despite our previous differences we are willing to bury the hatchet with Greene King and bring this historic Brighton pub back on track. Part of the problem was that Greene King treated our past turnover as standard rather than exceptional. Now that another ‘first class entrepreneur’ has had a turn at the helm we can all be a lot clearer on what a reasonable turnover on that site is, so we should all be able to sit down together and agree a sensible rent that will ensure that this lovely old pub can thrive in the future.” Tony Leonard said: “Although we would need to do a big refurbishment to restore some of the character and atmosphere of old, we’ve kept the old pub sign and we’re looking forward to putting it back in its proper place.”
Propel Opinion: It’s somewhat unlikely that the clock will ever be turned back on the former Hop Poles. McCarten and Leonard’s offer to Greene King is made in a spirit of righteous indignation after finding themselves hopelessly over-rented at The Hop Poles when turnover fell back from a stellar £1m a year at its peak – the pub had the highest take per square foot in the Greene King estate. The pair believes the right rent for the pub is around £30,000 to £35,000 per annum on a free-of-tie basis right now. Greene King will have a different view.
Hakkasan Group plans two City of London openings: Hakkasan Group plans to open two restaurants in London’s City this year as restaurateurs target the financial district for their expansion plans. “With the development of East London, the City is becoming the centre of London rather than the West End,” Hakkasan chief executive Niall Howard said. “It’s growing as a residential area and increasingly there’s an international crowd.”
Orchid Group reports 35 per cent sales uplift on four-day break: Managed pub company Orchid, with 300 pubs, reports sales rose by 35 per cent during the break. London fared best – particularly pubs in the Thames locale thanks to Sunday’s River Pageant. The Living Room on St Katherine's Dock for example saw record sales of £11,000, 79 per cent up on last year. A new takeaway offer benefited too, with plenty of deliveries throughout the Sunday. The Royal Standard in Blackheath pulled out all the stops and reaped in the benefits with sales of £1,700, up 21 per cent per cent. Thanks to live music at The George in Harpenden on Bank Holiday Monday, sales were up 168 per cent. It wasn’t just the South East celebrating either – Orchid pubs across Great Britain held street parties, fates, fun and games all bringing communities together and proving the British local really at the heart of local life. Simon Dodd, commercial and people director at Orchid, said: “It has been a great couple of weeks at Orchid. The recent summer weather followed by the Jubilee four-day weekend gave trade a welcome boost. Even with some unsettled weather over the bank holiday, it seems national pride is alive and well and people turned out in their thousands to celebrate the Queen’s special weekend. With sales up by 35 per cent - we certainly have a lot to be grateful to Her Majesty for!”
JD Wetherspoon opens in Bury after a nine week fit-out: Managed operator JD Wetherspoon has opened a new site in Bury’s historic Corn Exchange after a nine week fit-out costing £1.25m. The redevelopment has unearthed some spectacular original features, including a spectacular glass ceiling and stone arches. The decision to allow the company to take over the site met with substantial local opposition.
Demolition work starts on Fat Cat Café site in Northampton: Demolition work is set to start this week on the fire-damaged Fat Cats Café bar in Northampton – it was damaged in a major fire at the start of 2012. Fat Cat chiefs have admitted the worst-case scenario may see the Bridge Street nightspot not re-open until the end of 2013. Finance director Simon Patterson said: “The issue is the inside. The firefighters’ hoses caused just as much of the damage as the fire itself and, with no roof and quite a bit of rain since January, it doesn’t look great. “The demolition guys need to take out all the damaged floors. The back wall may also need to be moved.”
Pleisure starts craft bottled offer: Pleisure, the Brighton-based multiple led by Nick Griffin that has won industry awards for its drinks range, has created a 60-strong bottled craft beer offer at its The Speaker pub in London’s Westminster. Said Griffin: “The Speaker is a cask ale pub which we’ve now enhanced with a great bottled beer offer.”