Propel Morning Briefing Mast HeadAccess Banner  
Propel Morning Briefing Mast Head Propel's LinkedIn LinkPaul's Twitter Link Paul's X Link

McCain Banner
Morning Briefing for pub, restaurant and food wervice operators

Tue 10th Jul 2012 - Young's, Fuller’s and Greggs

Story of the day:

Tim Martin – chief executives need to step up to the plate: JD Wetherspoon chairman Tim Martin has argued that chief executives of major companies in the sector need to become more pro-active in arguing the case for lower taxes. In a letter to Propel Morning Briefing, he said: “VAT and Excise Duty for the pub and restaurant industry in Britain are incredibly high, even compared to high-tax countries like France and Sweden, and you have to ask yourself why. I think it’s because of the poor arguments that have been advanced by the industry in respect of both taxes and the fact that the chief executives of many big companies are often either silent or hostile, for reasons best known to themselves, to lower tax arguments. By far the strongest argument for lower taxes relates to VAT, since there is tax inequality between supermarkets and pubs and restaurants. It’s patently unfair for our industry to be paying 20 per cent VAT in respect of food sales when supermarkets pay nothing, yet how many chief executives of PLCs consistently articulate this argument? Almost none, even though the argument for VAT parity resonates with the public and would almost certainly produce more jobs and revenue for the country, since pubs pay far more tax per pint or meal, even in a lower tax situation. Instead, the industry focuses far more on Excise Duty, where there is, at least, tax parity between supermarkets and pubs. Even that argument is not always clearly articulated: the strongest point, tacitly admitted by David Cameron and George Osborne, is that there should be a tax advantage at our borders with our neighbours, or at least tax parity. If David Cameron urges French people to come to Britain for our lower tax regime, would he also encourage pub and restaurant operators to open in France, rather than Britain? The depressing reality is that we have the highest taxes for pubs and restaurants in Europe, because we deserve it. Last Wednesday’s Propel Morning Briefing highlighted the arguments by Greene King’s Rooney Anand for minimum prices, which will do nothing to dispel the tax disparity with supermarkets, and this follows his call 18 months ago for higher taxes for pubs in an article written in The Times. As an industry, we need to start becoming a little bit more rigorous and intellectual in our arguments, or we’ll continue to get stuffed by whatever politicians happen to be in charge.” 

Industry news:

ALMR benchmarking survey – costs are stable: The results of the ALMR’s sixth Benchmarking Survey show evidence of market stabilisation – for the third year in a row, the average cost of running the average pub remains around 46.5 per cent of turnover. Entertainment and premises costs were the only budget lines to show increases – of just under one percentage point in each case. But payroll costs fell by five per cent to account for a quarter of turnover, suggesting that the sector still remains vulnerable to direct and indirect wage hikes. The trend in like-for-like sales continues to improve – up +4.9 per cent in the year to October 2011, the largest reported growth since the survey began. Small managed multiples continued to outperform the market, with companies with fewer than ten sites reporting growth of almost nine per cent, as did food led businesses, up +8.6 per cent. Other indicators showed signs of stabilising: the decline in wet sales in the turnover mix is matched by a halt in attrition of community wet-led numbers. Investment is also back on track, with average capex of 3.2 per cent of turnover, up 28 per cent year on year. Strategic affairs director Kate Nicholls said: “This reinforces our message to government that we are an industry well able to generate jobs, invest in community facilities and play a full part in revitalising town centres, high streets and local neighbourhoods.” The only note of caution sounded in the report is a substantial fall in gross margins across the sector as a whole – down six per cent to 61 per cent wet and 58 per cent food. Margins were lowest in the tied leasehold sector – 56 per cent and 50 per cent respectively. And for the first time, tied rents overtook rents for commercial leases. The report is approved by RICS Industry Codes for use in rent setting and valuations and full report is available free to participating companies and at reduced cost to ALMR members.

German restaurant serves up caveman diet: A Berlin restaurant has opened serving unprocessed fruit, vegetables, meat and fish on its menu. The “caveman cooking” is described as “Paleolithic cuisine” - its menu contains foodstuffs including unprocessed fruit, vegetables, meat, fish, eggs, nuts and seeds. But a host of items and ingredients are banned, including bread, rice, sugar, dairy products and pasta. A number of reports have claimed the “Paleo diet” is a great way to shed pounds.

Deloitte reports 18-34 age group is defying the recession: A report by accountants Deloitte suggests that people in the 18 to 34 bracket are defying the recession by eating out more. Deloitte’s research shows they are going out to eat and drink an average of 32 times per month, up from 25 times a month a year ago. The average overall figures for eating and drinking outside the home registered a 13 per cent year-on-year increase to nearly 20 occasions per month, according to the study. “There is a touch of ‘austerity fatigue’,” said Deloitte finance director Jon Lake.

Underage check technology piloted in Bath: A new piece of technology aimed at stopping underage drinking is being piloted in Bath. Touch2id provides fingerprint recognition technology with the latest 'contactless' stickers to help pubs and clubs identify whether or not customers are above the legal age. The scheme involves a person going to the Post Office with their passport or driving licence where they will carry out various checks to verify their identity and age. A unique code is then created from their fingerprint that is encrypted onto a smart sticker for their mobile phone. The smart sticker, together with a fingerprint reader, can then be used by the pub or club to identify the person and ensure that they are the right age.

HMRC launches two sector taskforces: HMRC has launched taskforces to tackle tax evasion among Scottish pubs and nightclubs and restaurants in South Wales and the South West. HMRC launched 12 taskforces in the current year. The taskforces bring together various compliance and enforcement teams for ‘intensive bursts of activity targeted at specific sectors and locations where there is evidence of high risk of tax evasion’.

New beer-cooling system receives government funding: An innovative beer-chilling system which could save pubs almost £2,500 a year in energy and wasted drink costs is being developed with government funding. The drinks cooling system is one of a number of technologies which have won government backing from a £500,000 fund for schemes which will improve the efficiency of food production and reduce the impact on the environment. The drinks cooling system will use less energy than the current process, in which beer is chilled in the cellar, warms in pipes on its way to the bar and then is cooled again before serving. The system being developed by bar equipment supplier Brewfitt will chill drinks as they are needed, meaning better beer served at optimum temperatures and saving pubs an estimated £700 in energy costs a year and £1,700 of wasted drinks.

Company news:

Young’s reports four per cent boost to like-for-likes: London pub operator Young’s has reported managed house revenue for the first thirteen weeks of its financial year is up 10.1 per cent, and up four per cent on a like-for-like basis. This like-for-like figure includes Geronimo as it has now traded within the business for a complete financial year. Chairman Nicholas Bryan said: “Managed house trading has benefited from a number of factors including the impact of last year's investments in new pubs, the addition of three sites transferred from tenancy, and strong trading during the Diamond Jubilee celebrations. We are well prepared for the London Olympics which are almost upon us; we are anticipating a busy period in a number of our pubs, and in our hotels where bookings are very strong.” He added: “The Calf in the Westfield shopping centre in Stratford opened last month and is trading well, complementing our existing presence - through The Cow - on the doorstep of the Olympic Park. We remain confident that our premium strategy, well-invested estate and management focus on growth should continue to drive superior like-for-like performance.”

Restaurant Group lines up two Frankie and Bennys openings: The Restaurant Group has two more Frankie & Benny’s openings lined up. A site will open in the Clarks Village development in Somerset. The second site will open in Ballymena, Northern Ireland. The brand, founded in 1995, operates at 208 sites.

Giraffe plans Xscape opening in Castleford: Giraffe, the concept founded by Russell and Juliette Joffe that operates 46 sites, is planning a new opening in the Xscape complex in Castleford, West Yorkshire. The company launched two brand extensions last year - an adult-targeted café and a Bar & Grill format. The first Giraffe Café, which offers a more adult menu, opened on the site of the first Giraffe restaurant in Hampstead. 

Fuller’s to spend £800,000 on Reigate acquisition: London brewer and retailer Fuller’s is to close the Market Hotel in Reigate, acquired for £1.2m, at the end of this month to allow for a £800,000 refurbishment. The historic High Street pub will reopen with a new, yet-to-be-confirmed, name, although the word 'market' will be retained - it will also be rebranded as a 'pub and grill'. Rachel Hadfield, who will help oversee the project, said the site would have an industrial-feel including brick tiles, exposed extraction, and mismatching fittings. She said: “Downstairs will retain the pub feel, we don't want to get away from that. It will still be a traditional pub, just a bit nicer inside. The upstairs bar is going to become an open kitchen and there is going to more of a dining room.” Part of the building's large first floor will be a restaurant serving British bistro-style food, with the remainder turned into a “premium drinking venue”. The pub is expected to reopen in mid-September.

Leon plans ten openings in three years: Healthy eating chain Leon wants to open ten restaurants over the next three years. It plans to use £1.5m of funds raised by its bond scheme, which is currently being offered to customers. Customers will enjoy a gross return of ten per cent for £1,500 rising to 15 per cent for an investment of £5,000 and repayment after three years. Co-founder Henry Dimbleby said: “Our vision is to become an international fast food business, growing through franchise and owned stores. We would like to have a Leon on every high street in the UK but at the same time we will expand carefully and ensure we retain the quality which is at the heart of the brand.”

Greggs eyes expansion in the coffee market: Greggs, which operates 1,600 UK stores, is eyeing the coffee shop market. It plans 90 new stores this year and has particular ambitions to grow its Greggs Moment coffee shop concept, which is due to expand to six sites by next month. The coffee shop market is forecast to grow from £5.5bn now to £7bn by 2015. Chief executive Ken McKeikan told Reuters: “I'm a great admirer of what (Whitbread's) Costa Coffee have done and the question for Greggs is: Can we learn at pace and take a much bigger slice of the coffee market.”

Papa John’s strengthens management team; plans 25 openings: Pizza franchise business Papa John’s has appointed Stuart Yates as acquisitions manager for the UK and Jonathan Mott as construction and development manager. Papa John’s aims to open a further 25 stores by the end of the year, taking the total number of Papa John’s outlets to over 200 in the UK. Dave Galvin UK franchise sales manager, said: “Stuart Yates’ area of responsibility is to secure new premises and arrange suitable leasehold agreements on behalf of our franchisees while Jonathan Mott, will manage and coordinate the complete planning and fit out process of stores, up to the delivery to the new franchisee.”

All Our Bars re-opens Punch’s Old Garrison: Multi-site pub group All Our Bars has re-opened Punch’s Old Garrison pub in Campfield Road, Shoeburyness, Southend-on-Sea following a £200,000 refurbishment. The pub, formerly called The Garrison Arms, is located next to the historic Shoeburyness Barracks which was formerly home to The Royal Artillery but which has now been developed into luxury residential homes. Paul Wigham, chief executive of All Our Bars, said: “This has been our most exciting scheme to date. We worked closely with our partners, Punch Taverns, to create a superb environment unrivalled in the area. As usual, Punch has been brilliant throughout adopting their ‘customer service first’ approach to the project. Now we look forward to hosting customers in a top class environment.”

Private equity firm offers locals chance to buy pub: Private equity firm Bridport Capital has offered villagers the chance to buy a pub it owns – The Crown in Great Glemham, near Framlingham. The pub has been closed since August last year and Bridport Capital had wanted to convert it into holiday cottages. Now director Keith Stout said he would give the community an opportunity to club together and buy the former pub for £350,000. Camra member Thane Meldrum and his partner Emma Harrington have expressed their interest in purchasing it.

Gatecrasher to return to Sheffield: The three-strong Gatecrasher nightclub chain is working closely with Sheffield City Council to find a venue that would allow a return to the city five years after its site in the city burned to the ground. Gatecrasher managing director Simon Raine has confirmed he is looking at a number of potential locations for a new club. He told The Sheffield Star: “Gatecrasher will rise like a phoenix from the ashes, defining a new decade of clubbing. Our new site will exceed all expectations, bolder, bigger and more cutting-edge than ever before. We want to create the best club in the world. We have been searching tirelessly for a location so we can return to our home. What has been heartening is the support we’ve had from the city, we get emails daily asking us when we are returning and now it is finally a reality, with plans falling into place.” Gatecrasher currently has sites in Birmingham, Nottingham and Watford.

Springhead Brewery opens third pub: Nottinghamshire-based Springhead Brewery has opened a real ale and cider pub, The Bees’ Knees at its brewery site in Laneham. The Bees’ Knees will also be serving up a full menu of quality beer-matched meals, sharing platters and snacks, as well as lively chat and a great atmosphere.

Costa Coffee opens first Costa Academy in Southampton: Costa Coffee is offering unemployed youngsters an employment lifeline by opening the UK’s first Costa Academy in Southampton last Friday (6 July). The new facility will create a host of apprenticeships and training opportunities within the company. The academy is a £29,000 joint project between Costa and the local Junior Chamber of Commerce, JCI Southampton. Costa, hopes the academy will support those not in employment, education or training (NEETs) by equipping them with new skills and qualifications. Costa has invested £20,000 creating the academy above its High Street branch. It has a practical room with coffee machines to allow barista training. Meanwhile, Costa has applied to open Edinburgh’s first drive-thru coffee shop, at Corstorphine Retail Park.

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Pernod Mailibu Banner
Arla Banner
Meaningful Vision Banner
Mccain Banner
Casula Dining Banner
Heineken SmartDispense Banner
Contract Furniture Group Banner
Pepper Banner
Heinz Banner
Alcumus Banner
Santa Maria Banner
Cruzcampo Banner
Propel Banner
Nutritics Banner
Heinz Banner
Zonal Banner
Access Banner
Propel Banner
Christie & Co Banner
Sideways Banner
Kurve Banner
CACI Banner
Airship – Toggle Banner
Wireless Social Banner
Payments Managed Banner
Deliverect Banner
Zonal Banner
HGEM Banner
Pepper Banner