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Morning Briefing for pub, restaurant and food wervice operators

Fri 7th Sep 2012 - Beds and Bars, Miller & Carter and Punch

Story of the day:

Paul Chase – minimum pricing is part of a shopping list for anti-alcohol groups: Leading on-trade alcohol policy commentator Paul Chase has argued that minimum pricing is part of a “shopping list” for anti-alcohol campaigners – and lobby groups will return for more concessions from the trade. Chase has reviewed the evidence presented to the health select committee on minimum pricing – and found the trade voice drowned out by groups and organisations looking to restrict alcohol sales further. Writing for today’s Friday Opinion, he states: “What struck me first is that 50 of the 62 responses were from organisations representing public health professionals, temperance organisations or religious groups like the Salvation Army. Without exception these organisations support minimum unit pricing (MUP) and would like to see further restrictions on advertising, promotions, packaging and availability. Most of these respondents support the ‘whole population’ approach to alcohol harm reduction that would, if implemented, consign licensed retail to the status of a sunset industry. Of the 12 remaining respondents only three were from licensed retailers directly and only two of these, Heineken and Greene King, run pubs. Heineken is opposed to MUP, but Greene King supports it. The other response was from Waitrose that also supports MUP. There were responses from five trade bodies all of whom either oppose minimum pricing or, as is the case with ALMR, take a position that has evolved somewhat in that direction. Two things occur to me: firstly, that written evidence from those who basically see alcohol consumption as a vice outnumbered the evidence from those prepared to defend the industry by almost five to one, and secondly: they’re united and we’re not.” Chase, who is a director of CPL Training, added: “It is unwise to treat the proposals of those opposed to the industry as an a la carte menu from which you select the dishes you like and reject the ones you don’t like. It’s a shopping list. They’ll take whatever they can get, put it in the bag, and then come back for the remaining items.” (See separate Friday Opinion e-mail for the full Paul Chase article)

Industry news:

Joe Lewis in fresh takeover bid – this time it’s not M&B: Major Mitchells & Butlers shareholder Joe Lewis has launched a £50m bid for Timeweave, a company that holds a stake in a television channel that broadcasts horse racing to betting shops and which is listed on London’s junior market. Timeweave said it was considering its response to the 22 pence per share offer made by Lewis’s Mayfair Capital vehicle and would make a further announcement in due course. Lewis already holds a 29.99 per cent stake in Timeweave through Mayfair and now has a total interest of 45.79 per cent in the company after receiving undertakings from other shareholders. The move is the first tilt at taking over a public company since Lewis abandoned a M&B bid last October.

Tilman Fertitta – steak houses versus seafood restaurants: The world’s richest restaurateur Tilman Fertitta, who runs 56 restaurant brands in the US, has provided his philosophy on site locations for seafood and steak restaurants. Of his restaurants, 196 primarily serve seafood. He told Forbes magazine: “You can put the greatest seafood restaurant next to an average steak house in an urban area, and that steak house will do more business than the seafood place. If you go to the water, you can put an average seafood place next to the greatest steak house, and people are going to eat seafood.”

Johnson – the superangel investor has come of age: Private equity boss Luke Johnson has heralded the coming of age of the superangel investor, bridging the gap below venture capital firms who tend to want to invest a minimum of $1m. In his Financial Times column he wrote: “Luckily, the huge success of many tech firms has spawned millionaires who are willing to roll the dice again with their self-made wealth. They take the task seriously and provide a more diverse funding scene. Overall, their activities are not replacing typical VC investment but adding to it. They may not feel the need to do such extensive due diligence or take as many board seats as classic VCs, but they are in a position to empathise with an entrepreneur trying to construct a world-beating enterprise. The coming of age of the superangel is great news for entrepreneurs, job creation and the future of invention in the west.”

VAT is killing Brick Lane curry houses: The high level of VAT is being cited as major reason why curry houses in London’s Brick Lane are closing at an unprecedented rate. Businesses have seen a 40 per cent drop in trade, which owners blame on the rise in VAT to 20 per cent aggravated by poor trading during the Olympics. Enam Ali, chairman of the Guild of Bangladeshi Restaurateurs, told The Evening Standard: “Brick Lane is a specific area which has suffered this year on top of the change in VAT. But business has declined sharply over the past six months across the industry in the UK — call any curry house in London and ask them. It will be the same story. The restaurants themselves cannot afford to keep selling a Sunday buffet for £9.95 as they did before the VAT rise, but they do not want to put prices up because it will drive customers away. The VAT alone is a cash vulture and it is killing the industry.”

Scotland plans lower drink-driving limit: The Scottish government has started a consultation of plans to reduce the drink-driving limit. Scottish Justice Secretary Kenny MacAskill claimed widespread public support for cutting the legal limit from 80mg of alcohol per 100ml of blood to 50mg north of the border. The move would bring Scotland in line with other European countries such as France, Germany and Spain, but create a gap with England. MacAskill said: “We think in Scotland that this consultation will show that the vast majority of people want this.”

Panorama investigates minimum pricing: The BBC’s Panorama will report next Monday that a minimum alcohol price of 50p will prevent 50,000 pensioners dying of alcohol-related health problems over the next decade. The producers of the programme commissioned Sheffield University to model the effects of a 50p per unit minimum price. The Panorama edition looks at problem drinking among older people.

Company news:

Beds and Bars opens in Barcelona; plans New York and Paris openings: Beds and Bars, the award-winning pan-European hostel provider headed by Keith Knowles, has opened a 26 million euros hostel in Barcelona that offers 415 beds. The new site has been part-funded by two Spanish banks, which will take a 20 per cent equity stake in the Barcelona venture. Managing director Keith Knowles told Morning Briefing: “We had a very high occupancy rate on our first day of trading.” The next new Beds and Bars site to open will be a second St Christopher’s Inns hostel and Belushi’s bar in Paris in May 2013. Located directly opposite the Eurostar platforms at Gare du Nord, the £36 million property will be the biggest unit yet with 600 beds. The company will also expand its operations to North America in the near future. Negotiations are currently on course with New York’s City Hall, with regard to acquiring a suitable property and operating a St Christopher’s Inns backpacker hostel there. Last month, the Beds and Bars web team re-launched www.st-christophers.co.uk - a project that involved the creation of the company’s very own, cutting edge booking engine. Duncan Robertson, the digital and communications director at Beds and Bars, said: “The new booking engine offers travellers full payment for accommodation in three major currencies, the option to book multiple properties and the choice to pre-purchase extras such as cooked meals - before they arrive. The launch of the new website has seen tangible benefits within the first two weeks, increasing the conversion rate of visits significantly.” At the end of July, Knowles reported the company had seen 5.2 per cent like-for-like sales growth this year across the estate, with alcohol sales down but food and accommodation both in positive territory.

M&B to open first Miller & Carter high street site: Miller & Carter, the steakhouse brand operated by Mitchells & Butlers (M&B), is to open its first site in a city centre. The brand, which operates at 27 sites, is set to open in a small unit at The Headrow, Leeds in early December. It is the second site in the Leeds area but the first time it has been trialed in a city centre site. Former Mitchells & Butler chief executive Tim Clarke described Miller & Carter as the former head of pub restaurants Tony Hughes final gift to the company before he retired in 2007 – Hughes is currently a non-executive director with Frankie & Benny’s operator The Restaurant Group. M&B expanded the operational template for Miller & Carter earlier this year by opening a site in Aughton, Lancashire that also offers bedrooms. Morning Briefing understands the Leeds city centre site was being considered as an opening for its Tuk Cho pan-Asian concept at one stage. The Headrow is an avenue in Leeds city centre that holds many of the city’s premier shopping, civic and cultural attractions. Opening a Miller & Carter in a city centre location follows an earlier move by M&B to trial its premium destination dining concept Premium Country Dining at four town and city centre locations.

Spa entrepreneur to open classic British eatery: Spa businessman George Hammer has teamed up with East Dulwich Deli founder Tony Zoccola to open ‘The Great British’ next month, a classic British eatery. The concept will open on the site of a former butcher’s shop in Mayfair’s Audley Street. Joints of roasted meats will be carved in the window to entice customers in, with customers promised the ‘freshest fried eggs, finest British cheeses and an unpretentious British menu of vintage classics’. Hammer argues that the lack of authentic British eateries in the UK is disappointing given “such an abundance of quality produce, and hundreds of passionate, dedicated suppliers all over our island”. On his reason for opening a restaurant, he added: “Every time I took foreign clients out for a meal, we’d have difficulty finding a great, relaxed British restaurant, so it would always end up being Italian, Japanese or French instead.” In a 40-year career, Hammer has been responsible for bringing brands such as Aveda and L’Occitane to the UK, opening the Sanctuary Spa in London’s Covent Garden in 1980, helping to launch cosmetics brand Ruby & Millie and more recently opening the Urban Retreat ‘super salons’ in Harrods and Harvey Nichols.

Whitbread – we’ve noticed the many new entrants in the coffee market: Whitbread, which yesterday reported strong-like-for-like sales growth of 5.7 per cent for its Costa Coffee business in the most recent quarter, has told analysts that it has noticed fresh competition arriving in the UK market. Group finance director Chris Rogers told City analysts: “The coffee market is a good market to be in as evidenced by the number of people coming into it.” His comments come as Whitbread reported it had gone through the 200 stores mark in China. Rogers indicated that the company saw a 100 unit franchised operation developing within Singapore, Thailand and Cambodia over the next five years. “It’s small beer compared to China,” he added.

Spirit to spend £500,000 on Fayre & Square conversion with Costa Coffee and Wacky Warehouse: Spirit Pub Company is to spend £500,000 on converting its Old Cobblers Inns site in Rawtenstall, Lancashire to its Fayre and Square format. The venue, which will re-open on 20 September, will have a Wacky Warehouse branded play centre upstairs and Costa Coffee on offer. General manager Chris Kendall suggested that the investment is the first major spend at the pub for 18 years. Fayre & Square, now are over 130 sites, has a 61 per cent food mix with 1,600 covers per week producing around £11,200 of food sales a week including VAT.

First Project Artisan site debuts this Saturday: Leicestershire brewer Everards will debut its first Project Artisan site – an evolution of its Project William venture with micro brewers – in Birmingham’s Stirchley area this Saturday. Project Artisan looks to install local food and drink businesses – such as bakers, chocolatiers and butchers - in Everards pubs or sites owned by Everards. Everards has invested £250,000 into converting a former pool table supply shop into Stirchley Village Store and Bakery. The venue will serve as an artisan bakery, co-operative food store, cookery school and craft beer outlet. It will be overseen by Tom Baker, a former NHS dietician who set up Loaf, a commercial maker of artisan bread, a few years ago. Baker, who has been producing his artisan bread from home for several years, will invest £20,000 in the venture. Baker said: “Open from 3pm, there will be all kinds of great things: tasty food including pizza and bread, live music, and a pop-up beer bar from our friends at Stirchley Wines & Spirits.” 

Punch reports very positive mood at annual staff conference: Punch Taverns has reported that a “very positive” mood prevailed at yesterday’s annual conference, held at the FA’s new St George’s Park facility and attended by 400 head office and field staff. Chief executive Roger Whiteside said: “We are entering year four of our five-year plan to focus on the 3,000 best-invested and highest quality tenanted and leased pubs in the UK. It was a very positive day.” Capital expenditure has been back-loaded this year because of the de-merger from Spirit in August 2011 with two-thirds of the 400 investments planned happening in the second half of the financial year. The company is re-investing in every pub in the core estate that is returned to it before that pub is re-let. Attendees were briefed about a host of efficiency improvements, including how the company is ensuring it’s “ahead of the game” to ensure pubs spend the minimum amount of time as tenancies-at-will during the investment and re-letting process.

Whitbread – pub restaurants sales growth aided by range of actions: Whitbread has reported that performance within its 400-strong pub restaurants business has been aided by development if its breakfast offer and Costa Coffee offering within sites which are delivering “good gross margins”. The Buffet Place that Whitbread is rolling out at Brewer’s Fayre sites is producing sales growth at “lower gross margins.” Margins have also been helped by “good work on labour efficiency and selective price increases”, chief executive Andy Harrison told City analysts. Analysts were also told Whitbread may fall short of its four-year plan to add between 80 and 100 pub restaurants to the estate because expansion of Premier Inn is now moving to a greater focus on city centre sites where there’s less of an opportunity to open co-located pub restaurants. On how Premier Inn would be affected by Travelodge’s woes, Harrison said: “It’s still quite a highly geared business and it doesn’t appear that they gave a long-term owner.”

Cask Marque – our Caskfinder app being used 50,000 times a month: Paul Nunny, chief executive of cask ale accreditation body Cask Marque, has reported that its Caskfinder app is being used over 50,000 times a month to find Cask Marque pubs. Writing to Propel in response to Inapub chief executive Robin Bratel’s Friday Opinion piece, he said: “The Ale Trail on the app has over 6,000 followers some of whom have visited over 300 Cask Marque pubs. You record your visit by scanning the QR code on our certificate. Interestingly, I was in the office on Saturday and I received a call from a landlord where customers were visiting his pub to enjoy a non-existent beer festival which was listed on the app. Subsequently we found that we had been notified of the wrong dates. However, it shows that it drives footfall. Our survey of our licensees states that 98.6 per cent would recommend Cask Marque to fellow licensees. I am sure the app has played an important part in this success.”

JD Wetherspoon tries again in Wells, Somerset: Managed operator has submitted a second application to open a pub in Wells, Somerset. The company was turned down a year ago but has re-applied to convert The Wells Emporium shop site on Priory Road. Mendip district councillors threw out the plan last year claiming there was no need for a Wetherspoon in the city, which has a population of 10,406.

Scottish coffee shop voted best in the UK: Artisan Roast, which has two branches in Edinburgh and one in Glasgow, has been voted the best coffee shop in the UK by users of user-generated review site Qype. The coffee shop chain was started five years ago by Gustavo Pardo and New Zealander Michael Wilson and was originally a roastery. Customers buying beans to take home kept asking for coffee to be served on the premises. Manager Catherine O’Shea said: “The beans that we source are speciality beans. They’re the top eight to ten per cent of all the coffee beans in the world so they’re much more expensive but they’re definitely worth it.”

Loungers lines up two November openings: Loungers, the café bar concept headed by Alex Reilley, has two openings planned for November. The company will open its fifth and largest Cody Club site so far in Cardiff in mid-November. Just prior to that, the company will open its first site in the north west in Liverpool’s Mann Island development in early November.

New Moon Pub Company confirms third site: New Moon Pub Company, headed Paul Newman and David Mooney, has confirmed its third pub - The Hanging Gate at Weaverham near Northwich, which is scheduled to open in December after a £250,000 facelift. Newman said: “We’re excited to bring our elite brand of informal fine dining to the Northwich area. We’re passionate about what we do and the experience that we are able to offer to all of our customers and we can’t wait to open the doors to the new Hanging Gate experience.”

Peter Andre launches second coffee shop: Celebrity Peter Andrew has opened the second site for his New York Coffee Club concept in Brighton’s North Street. The singer opened the original site in East Grinstead in November 2011 and got off to a shaky start with a critical report on hygiene standards from the local authority – a later report indicated standards had improved.

GB Holdings adds fifth Birmingham venue: Late night operator GB Holdings, led by Lawrence Bartin, has added a fifth site - the former Purple Bar & Lounge - for an undisclosed sum. Purple Bar closed last month and will reopen a gay venue called Queer on 27 September following a £150,000 redevelopment. GB Holdings also bought the Nightingale Club out of administration ten months ago and also runs the Loft Lounge, Penthouse, and Village Inn venues in Birmingham’s Southside area.

Wadworth moves distribution to Kuehne & Nagel: Wiltshire brewer and pub retailer Wadworth is to move its distribution and some of its warehousing to Kuehne & Nagel’s Thatcham depot in Berkshire. Thirty-one employees are now involved in a consultation on the move. Wadworth managing director Charles Bartholomew said he took the decision reluctantly after a detailed review of the departments.

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