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Morning Briefing for pub, restaurant and food wervice operators

Thu 21st Jun 2012 - YO! Sushi, Hungry Horse and Diary

Story of the day:

YO! Sushi sets opening date for first US site: Conveyor belt sushi firm YO! Sushi has set an opening date for its US debut in mid-July – slightly later than the original planned opening date in June. The first venue will be in Union Station and will open for preview nights on 18 and 19 July. A second site is expected to open in Chinatown shortly afterwards. A Living Social event, featuring three courses with sake pairings for $39 at the first venue, sold out in under two hours with 700 people taking up the offer. YO! Sushi business development director Alison Vickers to Morning Briefing: “Construction is well underway, with the conveyor belt being installed this week.” Franchisees Richard Pawlowski and Darren Wightman have signed a ten-site development deal. Pawlowski already operates 36 casual dining concepts as a franchisee with three US brands – Cosi, a soup and sandwich concept, Qdoba Mexican and Bugaboo Creek Steakhouse. Wightman is well placed to roll out YO! Sushi in the US – he was previously executive chef for the brand in the UK. The first international YO! Sushi opened in September 2003 in Dubai. Now the company has 12 franchised overseas restaurants and is focused on the Middle East, US and key transport hubs internationally. YO! Sushi, headed by Robin Rowlands and backed by private equity firm Quilvest, had turnover of £50.3m in the year to November 2010 and made a profit of £8.2m. 

Industry news:

BT bid for all Premier League football rights: BT’s football coverage ambitions were broader than originally thought – the company bid for every Premier football package in the recent auction, it has been revealed. BT paid £738m to show 38 matches but was trying to buy a much bigger share of the 154 games on offer in seven packages. BT Vision chief executive Marc Watson has stated that football is a “calling card” that allows the company to sell other products.

McDonald’s posts “burger plumping” video: In a surprise move, McDonald’s has posted a video on YouTube that shows how it styles burgers for photographic purposes. The video features footage showing how burgers are “plumped” by adding sauce through syringes and how ingredients are placed on the edge of the bun so they can be seen. A McDonald’s marketing executive Hope Bagozzi explains in the video: “The main difference (between the photographed burger and one found in a store) is that we took all the ingredients that are normally hidden under the bun and we pulled them to the foreground so you can see them.”

FSA – banks have questions to answer on mis-selling of interest rate hedging products: Head of financial conduct at the Financial Services Authority Martin Wheatley has told the House Commons Treasury Select Committee that he thinks the four major banks have “questions to answer” on the mis-selling of controversial interest rate swap products. Earlier this week, Morning Briefing reported that the directors of multi-site pub operator Sarumdale blamed the company’s collapse into administration last week on a swap that cost the company £2m in extra payments over six years.

Low-fat salad dressing is “unhealthy”: Researchers have concluded that diners sacrifice health benefits when they choose a low-fat dressing for their salad. Their research found that higher-fat dressings help the body absorb more carotenoids, compounds in vegetables linked to a reduced risk of illnesses such as heart disease and cancer.

Tim Brooke-Webb named Publisher of the Year: Tim Brooke-Webb, the executive director at William Reed Business Media who oversees the publication of industry magazines Publican’s Morning Advertiser, M&C Report and Restaurant magazine, has been named Publisher of the Year at the Professional Publishers Association annual awards.

Company news:

Greene King lines up three more Hungry Horse openings; one on rival Marston’s doorstep: Suffolk-based Greene King has lined up three more Hungry Horse openings to add to its existing estate of 180 sites, including one in the home-town of rival Marston’s. The company will re-open The Turf Tavern in Carlisle’s Newmarket Road as a Hungry Horse this week after a £500,000 refit. Meanwhile, Greene King has bought The Bromsgrove Sports and Social Club and will convert it into a Hungry Horse with an August opening planned. It has promised to retain the venue’s large function room for use by residents and community groups. Greene King will also construct a new-build Hungry Horse on Stafford Road in Wolverhampton on the site of the old Goodyear headquarters – it’s due to be completed by the end of 2012.

Walkabout operator Intertain reports World Cup sales lift: The start of the Euro 2012 championships has seen a 40 per cent sales uplift across Intertain’s 31 Walkabout bars. Revenue on the days that England played was up 134 per cent year-on-year. While the England matches have seen the biggest uplifts, there were also large increases seen during Ireland’s games with Spain and Italy, and the German v Holland fixture. This year’s newly refurbished venues, Temple, Hanley, Watford and Liverpool, have seen some of the biggest increases in revenue during the England games - a 236 per cent average increase. The venues have also benefited from a campaign that has seen local and national TV and radio crews broadcasting from the venues during the matches. John Leslie, chief executive of Intertain, said: “The trading figures help reinforce our position as the best sports bars on the high street, and build on already impressive sales figures from our student, party and live entertainment nights. They are also further proof that the refurbishment programme is succeeding. We’re looking forward to another massive night against Italy on Sunday.”

Collyer issues estimates on Spirit brand takings: Deutsche Bank analyst Geof Collyer has issued his estimates of average takings at Spirit Pub Company’s major brands. For the three major food brands, he estimates that: 139 Chef & Brewers are achieving average sales per pub of £963,279 per annum (or £18,524 per week); the 131 Fayre and Square venues hit average sales per annum of £958,846 (or £18,439 per week); and the 81 Flaming Grill pubs average annual sales of £932,360 (or £17,930 per week). The combined sales of the 351 food pubs are £335m. Of the wet-led pubs, he estimates: the 136 John Barras pubs achieve average annual sales of £863,673 (or £16,089 per week); the 111 Taylor Walker pubs achieve average annual sales of £1,001,481 (or £19,259 a week); and the 24 Original Pub Company sites achieve average annual sales of £621,075 (or £11,943 a week). 

JD Wetherspoon looks to capitalise on “Summer of Sport”: Managed operator JD Wetherspoon has produced a 36-page magazine for customers that seeks to encourage them to enjoy the “Summer of Sport” at the company’s pubs. The publication provides a guide to Euro 2012, Wimbledon and the Olympics with customers encouraged to “make Wetherspoon your front-row seat for what promises to be an amazing celebration of sport”. The magazine lists hundreds of its pubs across the UK, including sites in Glasgow, Coventry and Essex, that are located close to Olympic events. A spokesman for Wetherspoon told Morning Briefing that turning the sound up will be at the discretion of pub managers.

West End deli saved by public outcry: A West End deli, Gaby’s Deli, renowned for serving falafels and salt-beef sandwiches, has been saved from closure after celebrity customers voiced opposition to its redevelopment. It had faced being shuttered after Westminster council approved plans by its landlord to develop the site to house a branded chain. Owner Gabi Elyahou has now signed an interim lease that will keep the venue open until May next year.

Ipswich pub wins recognition for best series of summer events: An Ipswich pub has beaten off competition from more than 4,800 fellow Punch Taverns pubs to win recognition for staging the best series of events this summer – tagged the Summer of Our Lives by Punch. The Bell at Kesgrave produced an award winning business plan to sweep the board at the competition arranged by Punch to encourage licensees to plan for this summer’s blockbuster series of events. The pub, which is run by licensees Debbie and Sam McCallum, has celebrated the Jubilee with a Tiara Party, a Right Royal Karaoke, a Jubilee Big Lunch and a Bring Your Own Boat Regatta. The couple win a dray of beer totalling more than 13,000 pints. Two pubs received a special mention as Highly Commended, The Coach and Horses at Kibworth – turned into a boat for the Jubilee - and Mains of Scotstown in Aberdeen, which was praised as the ultimate community based pub.

Domino’s UK shares honour of opening 5,000th international store: Domino’s UK is sharing the honour of opening the pizza company’s 5,000th international store today. The UK business is opening its eighth German store in Cologne – it owns the master franchise rights in Germany. Sites in Brazil and Malaysia also open today. The opening in Germany, by a UK-based franchisee, comes 27 years after the first store outside of the USA was opened. Domino’s UK chief executive Lance Batchelor said: “We are delighted to have the honour of opening the 5,000th international store. Our plans in Germany are progressing well and opening a global milestone like this will help raise our profile as we continue to expand in the region.”

Village pub set to become Norfolk’s first community-owned pub: Villagers has raised the first £100,000 to turn The White Horse in Upton, near Acle, into the first village pub in Norfolk to be fully owned by the community. Villagers plan to make the pub home to a micro-brewery, village shop, internet cafe and educational centre, and the 200-year-old pub could even host hairdressing and complementary health sessions.

Morning Briefing Diary:

Is everybody listening? Loveable West Country brewer and pub operator Wadworth filed its accounts at the weekend. Chairman Charles Bartholomew wrote an overview of performance and indicated he was keeping a particular eye on budgets this year. “We have excellent information from our new Navision computer system and all sales and costs are easily accessible to department heads so there can be no excuse for over-running on costs.” Folks can’t complain they haven’t been warned. 

Naming names: Quoted companies tend to take a circumspect approach to naming companies they believe they’re taking market share from. So good to hear Whitbread declining to beat about the bush and referring to difficulties at rival budget hotel provide Travelodge on a number of occasions at Tuesday morning’s results briefing for analysts. Underscoring the point one last time toward the end of the conference call, chief executive Andy Harrison told analysts: “My understanding is that Travelodge is not signing up any new developments. For some of those in its pipeline we’re one of the major alternatives.”

Where is the Olympic spirit? The Olympics will be terrific, we all know that. But, equally, the restrictions, the diktats and the ridiculous requests from organisers can be galling. Step forward, Beds and Bars boss Keith Knowles. “I’m a proud Londoner and believe in the Olympic spirit but I think organisers have missed the chance to embrace.” Knowles, who has ten sites in London, refers to traffic restrictions (staff will not be able to use London Bridge tube station), trading restrictions that mean deliveries will arrive after midnight and one letter from Transport for London that suggested his staff work from home. “I faxed the letter straight back with a single word, b******, added,” Knowles tells Diary. Somebody had to say it.

Coast to Coast cares the most: Coast to Coast, the new Restaurant Group concept that debuted down in Brighton Marina, is taking £50,000-a-week - and for those who haven’t been, it’s exceptional with some genuinely warm hospitality. Equally impressive is the proactive approach to the occasional customer complaint posted on review websites. One customer posted a review about unfriendly service – and being asked to wait in the bar with a buzzer until a table became available. Senior area manager Chris Thynne responds in textbook fashion: “At Coast to Coast, we believe that hospitality is the beating heart of our business and without it we are nothing. On this occasion, you have been badly let down. Your comments have genuinely resonated with us such that the host's role is being revisited to ensure that we get it right at all times going forward.” The message comes with an invite to the poster to come and try the venue again. Shouldn’t there more of this out there in the blogosphere?

Punch Taverns comes to the crease: It’s a pat on the back to Punch Taverns, which has given Yeadon Cricket Club, near Bradford, a boost by selling the club its cricket ground for a sensible sum. The transaction was completed almost 14 years after the club first entered into discussions about the possibility of buying the ground. Club chairman Duncan Sloane said: “I first started to explore the possibility of buying the ground back in 1998 - at that time our landlords were Bass.” And the sensible sum? Not unadjacent to £60,000, Diary hears.

Belts have been tightened at the BII: The British Institute of Innkeeping has had a “challenging” time with qualifications income down and a near-£500,000 loss in 2011. But newly-filed accounts reveals there’s been trimming of big salaries too. In 2010, there were four members of staff earning more than £60,000 per annum, earning between £350,000 and £390,000 collectively (only salary bands are provided). In the most recent year, one of three chunky salaries had gone to leave three members of staff earning between £270,000 and £300,000 collectively. 

Surrey man grabs pizza action: It’s hearty congratulations to Domino’s franchisee Pali Grewal from Surrey, who has retained his title as Domino’s fastest pizza maker. He retained the title he won two years ago at Domino’s once-every-two-year competition in Las Vegas. Beating the cream of the company’s pizza spinners, he created three large pizzas in just 43.9 seconds - that’s just 14 seconds per pizza. Is it too late to make this an Olympic event?

The boat that rocks: As the search for a new chief executive at Mitchells & Butlers enters its fifteenth month, Diary hears one candidate’s story. Our subject, business plan in hand, got as far as meeting shareholder Joe Lewis aboard his boat in the company of the chairman of the time. Sad to say, the pair left the boat not with two jobs, but with the chairman shown the gangplank. 

Collyer sets up a heated debate: It was a few years ago that one restaurant operator provided a platform for a whole afternoon of lively debate by declaring: “Pub operators have the best sites but the worst concepts.” Now Deutsche Bank analyst Geof Collyer sets up what could be an equally interesting debating point with the following observation: “The sector’s history over the past 20 years seems to have been has been littered with people who have money to invest but can’t operate, and those that can operate but have no money to invest.”

Beating the noise police: The Macbeth, the indie music venue in London’s trendy Hoxton, has come up with a novel way of out-witting the noise police. The local authority told the venue it would be conducting noise level tests this week. So, regulars were invited to turn out in strength from 8pm onwards and form human noise insulation. And as a gesture of thanks, there were free drinks on offer from 9.30pm.

International news:

New York giant soft drink ban plan spreads: The mayor of Cambridge, Massachusetts, Henrietta Davis, has proposed limiting the size of soft drinks served in city restaurants after being inspired by the proposed ban in New York. City officials have been tasked with drawing up proposals, with a suggestion from the mayor that a voluntary compliance agreement could be drawn up. In New York, Mayor Michael Bloomberg has suggested banning containers in foodservice establishments that are bigger than 16 ounces.

Papa John’s tops limited service customer satisfaction ratings in the US: An annual survey of customer satisfaction levels has placed pizza chain Papa John’s top of limited service operators for the 11th time in 13 years, according to Nation’s Restaurant News. Papa John’s scored 83 out if 100 in the survey. More generally, consumer satisfaction with quick-service restaurants has reached level pegging with that for casual-dining chains for the first time in the history of the American Customer Satisfaction Index, with a tied rating of 80 out of 100. The results represented a decline of 2.4 per cent from 82 last year for full-service restaurants. Meanwhile the limited-service group — which includes quick-service brands and pizza chains — rose 1.3 per cent from its 79 rating last year.

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