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Morning Briefing for pub, restaurant and food wervice operators

Wed 19th Sep 2012 - Taylor Walker, Gresham Inns and Starbucks

Story of the day:

CPL Training customer satisfaction survey places Piccolino top: A Propel Info survey of 5,000 customers commissioned by CPL Training has found Piccolino, operated by Individual Restaurants, as the highest ranking brand in terms of customer satisfaction. The survey asked customers who had visited major brands in the past three months to score the experience. The top ten rated brands are: (1) Piccolino, (2) Cote, (3) Aagrah, (4) Las Iguanas, (5) Brunning & Price, (6) Gaucho Grill, (7) Bill’s, (8) La Tasca, (9) Nando’s and (10) Spaghetti House. CPL Training chief executive Daniel Davies said: “I’d like to congratulate these brands and their staff for scoring so highly in our survey. It was clear that customers regarded these brands as offering exceptional customer service and value, resulting in outstanding customer satisfaction scores. We are in the process of contacting companies and brand owners to tell them their precise score.” Propel Info managing director Paul Charity said: “It is clear that customers of major branded chains have a very clear idea of what constitutes good value at whatever price points they trade at. Gaucho Grill, for example, has price points that are above average but customer rewarded the brand with a high score based on relative value and service standards.” Bubbling under the top ten list in the survey were Ask, Pattiserie Valerie, Wildwood and two Mitchells & Butlers brands, All Bar One and Premium Country Dining. 

Did you know that McDonald’s UK is more than twice as profitable as JD Wetherspoon despite only having 50 per cent more sites? The Propel Info Hospitality Sector Turnover and Profits Blue Book ranks the 200 leading pub, restaurant and foodservice companies in the UK by turnover and profit, provides a five-year overview of performance and lists directors’ salaries. To buy a copy e-mail Jo Charity or Sharon Dickinson on jo.charity@propelinfo.com or sharon.dickinson@propelinfo.com

Industry news:

Allsop reports more private investor sales in 2012: Property auction house Allsop has reported that private investor sales in 2012 have grown from 20 per cent to 27 per cent of all sales. The auction house stated: “This could be attributable to private investors undertaking more consensual sales (selling at the request of the bank). There has been an 11 per cent fall in the volume of property company sales which may be due to a reluctance to sell or a preference for asset management.” The biggest increase has been in receivership sales, which have risen from ten per cent to 20 per cent of all properties going to auction. A survey of buyers at auctions in May and July found 41 per cent of buyers had not bought at auction before and 70 per cent said they would be using cash to fund their purchase. A total of 77 per cent said they would be buying again in the next 18 months.

FourSquare hoping to attract lapsed users back: FourSquare is hoping to attract back lapsed users by signing up well-known UK retailers, according to Marketing Week. The company thinks that new deals will encourage lapsed users back to try its new functions. Speaking to Marketing Week, FourSquare vice president and head of business development Holger Luedorf said: “A lot of people consider FourSquare to be where you earn badges or check in but with our new function such as; explore, lists, and offers people realise there’s a ton of utility in FourSquare. We are trying to shift the mindset of users to try us again as we have moved forward.”

Morrisons unveils revamps value food-on-the-go range: Supermarket Morrisons is upping the ante on lunchtime grab-and-go value with a new £2 meal deal. A new range involving 90 items goes live on 24 September – it includes 15 sandwich varieties made on site, seven own-label sushi items and six new cake bars. The £2 meal deal will allow customers to combine a £1.40 sandwich with a bag of crisps and a drink. The new sandwich lines will start at £1 and not exceed £2.50. Sandwich buyer Ken Clow told The Grocer magazine: “We want to offer our customers the best value food-to-go range on the market and believe this re-launch, with fantastic new products across the entire range, will achieve that.”

Landowner Capital and Counties to invest £200m in “creative regeneration” and expansion in Covent Garden: Capital & Counties has placed £68.4m new shares to fund a £200m expansion of its Covent Garden estate. The company stated: “Covent Garden’s average Zone A rents remain significantly below comparable streets in London even at the current level of ERV, illustrating the potential for further rental growth on the estate. Occupancy remains high at 99.6 per cent as at 31 August 2012 and 12-month footfall was consistently strong with 43.5 million visitors. There continues to be high demand from occupiers for retail and food and beverage units on the estate.” The company said opportunities include expanding the luxury and food & dining offers. Brasserie Blanc has forecast its Opera Terrace site, a Capital and Counties tenant, will turn over between £6 and £7m in the year after refurbishment.

Company news:

Geof Collyer - Enterprise Inns has options: Deutsche Bank analyst Geof Collyer has stressed that Enterprise Inns has options going forward with much of its cash flow outside of securitisation. His comments come despite two so-called vulture funds holding a combined 21 per cent of the stock. Glenview, Enterprise’s biggest shareholder, owns 12.3 per cent and Luxor Capital went through the nine per cent ownership mark last week. Collyer, who is house broker, said: “However, unlike Punch Taverns, Enterprise generates around 55 per cent of its operating cash flows from pubs held at the plc level, outside its Unique Pub Co securitisation (UPC), and so has options on how it manages its overall debt situation. The group announced a plan to prevent UPC going into cash trap last year and is in the process of buying in bonds within UPC that will prevent it going below this level. Enterprise is quite clearly a going concern, and is making positive progress towards achieving flat like-for-like net income in its tenanted & leased estate. Enterprise could support UPC for a number of years. But in the event it had to break the umbilical cord and part company with its securitisation, we saw 90p a share as a “worst case scenario” for Enterprise equity. However, following the plan now in train to buy back £75m worth of A3 and A4 UPC bonds that should keep UPC out of the cash trap position for the foreseeable future, we no longer see separation as either possible or probable. We never saw it as desirable. At the end of the third quarter of 2012, the group had purchased and cancelled £41m, leaving only £33m of bonds to be acquired in the open market over the next five quarters. There is plenty of time, but we feel the market would rather tick this factor off its list of outstanding issues sooner rather than later.”

Gresham Inns aims for five sites by early 2013: Gresham Inns, the London multiple headed by Will Clayton, has signed for its third site - The Royal Star, in London’s City Road. Operations director Gregory Barry said: “We’ve got builders in at the moment completely gutting the place and installing a premium all-day offering – a bar/cafe with attached restaurant and terrace to rear. There will be an circa 100 cover restaurant space with a Californian and South American influence. The concept has been created by myself and creative consultant Ed Bush, of CC17 Design, backed by managing director Will Clayton.” An opening is anticipated for the last week of October. Gresham Inns is in negotiations for a fourth site in the City with a fifth in the pipeline for early 2013. Barry added: “Our Cork & Bottlesite is in growth this year. The Pride of Paddington is grateful for a large contractor booking for the Olympics, would have struggled otherwise. Paddington was deserted during the period.”

Town Hamlets council to sell the freeholds of three pubs: Town Hamlets Council is selling the freeholds of three pubs to raise money. It is selling The Queen’s Head in Limehouse, The Blue Anchor in Bow and The Old Ship in Shadwell. The local authority stated: “The council has taken a decision to sell its freehold interest to generate much needed capital receipts for re-investment in other council priorities such as the provision of affordable housing. The pubs are let on commercial leases and will continue to operate but owned by the private sector rather than the council.

Tooting pub sells for £1.3m: The Trafalgar Arms in Tooting has sold for £1.3m after a deal between its unnamed pubco owner and its tenant. “We arranged for the tenant to receive a premium on completion in return for surrendering the lease early,” said Panayiotis Themistocli of agent AG&G. “The Trafalgar Arms was already a desirable property in a good location in SW17 but this gave it an extra edge. It was snapped up by a developer, who was prepared to pay well above the guide price of £1.2 million to secure the empty premises.” The new owner is considering all options including possible development, subject to planning consent.

Starbucks to launch digital rewards in the US: Starbucks will launch digital rewards across the US and Canada on 16 October in its “My Starbucks Rewards” programme. Customers will now receive an email to announce that a “Free Reward” has been loaded directly onto their registered Starbucks Card account. The company stated: “No more waiting by the mailbox, no more forgetting to tuck that postcard in your purse or stuff it in your pocket. The Free Reward will be loaded instantly onto your registered Starbucks Card account.” Customers now receive a free reward for every 12 visits rather than the previous 15. Starbucks added: “With these changes unfortunately, we are saying goodbye to some other rewards. Soy milk and syrups will no longer be free and the free tall drink with whole bean purchase has been removed from the program.”

Tavistock Leisure take the brew-pub route: North-east company Tavistock Leisure has invested £200,000 on converting The Kicking Cuddy pub, Coxhoe, Durham, to The Sonnet 43 Brew House, Tasting Room and Restaurant – the brewpub is close to where Elizabeth Barrett Browning was born and raised at Coxhoe Hall. Tavistock director Mark Hird said: “The craft beer market is one of the only sectors in the pub industry that has shown strong growth in recent years and I’m really excited about playing a role and supporting the shift from mass-produced beers to ones that have been more lovingly crafted.”

Taylor Walker to launch cask ale festival; links up with CAMRA: Taylor Walker, the 115-strong brand owned by Spirit Pub Company, is to hold a major cask ale festival between 1 and 14 October. The festival will feature 14 cask ales from a combination of major cask ale brewers and microbreweries. Members of the Campaign for Real Ale will receive a ten per cent discount on production of their CAMRA card. A loyalty card is also on offer that provides one “festival ale” free for five bought. Ale flights offering three or six one-third pints are on offer with all 14 ales offered in one-third pint glasses. The Taylor Walker cask ale festival will follow a cider festival, being held between 10 and 23 September, that features 16 ciders – customers have been invited to vote for their favourite cider online.

Bean Leisure re-opens Sheffield nightclub: Northern operator Bean Leisure has re-opened Sheffield’s Steelhouse nightclub, based on West Street, after a £250,000 refubishment with an ‘urban chic’ look. Jacqueline Greenaway, of The Bean Group, said the new venue showed the firm’s commitment to the north of England. She said: “We are delighted to have acquired Steelhouse. As a northern-based company we have added Steelhouse to our extensive portfolio as we are committed to investing in thriving northern cities and towns and we feel Sheffield has huge potential for us.” The Bean Leisure website states: “We are focused on building a network of managed pubs and clubs across the north of England by combining sales of successful and high profile brands with forward thinking retail principles. The death of the traditional pub has been significantly over exaggerated in recent years and Bean is a perfect example of an operator which has gone about disproving the rule that pubs can only succeed where there is a food offering. Operating primarily in secondary towns down the M62 corridor, we are aggressively developing cutting edge brands to revive previously closed or derelict properties where others have failed.” Bean Leisure operates two Wildcats lap-dancing clubs, three Bees Knees sites, with openings due in Stalybridge and Pontefract, and Slam shot bar in Oldham. 

Better burger brand aligns with craft beer: Smashburger, the fast-expanding US better burger concept with 143 sites looking to expand into the UK, has unveiled a burger-and-beer pairing menu at two Denver area sites in the US. The menu links with ales from the neighbouring New Belgium Brewing Company and is part of moves to elevate the burger occasion and differentiate the brand in the better burger market. The menu pairs nine Smashburger items, including several new sandwiches, with five different New Belgium brews.

French restaurateur Edwin Chan to open London restaurant: Restaurateur Edwin Chan is to open a site in London next month, Edwin’s French Wine Bar and Restaurant. The venue will focus on Lyonnaise dishes and will open in London’s Shoreditch on 1 October. Chan’s first site, a wine bar and restaurant, Edwin’s, opened in Lyon in 2007. The Shoreditch venture will comprise of a 40-seat dining room and a 15-cover wine bar.

McDonald’s pins hopes on delayed McRib to boost December sales: McDonald’s in the US has delayed the release of its star seasonal performer, the McRib until late December to boost sales. The McRib comes out once a year, usually from late October through early November. According to a memo obtained by Ad Age, the McRib marketing window was originally scheduled for 22 October through to 11 November. But the sandwich promotion has been pushed back to strengthen the company’s fourth quarter which is competing against a 9.9 per cent sales uplift the same month the year before. Meanwhile, McDonald’s will add Asian noodle boxes called ‘McNoodles’ to its menu in Austria for a two to three month trial period starting on 20 September.

Sir Tom Jones to headline St Arthur’s Day in London pubs: Sir Tom Jones will be the headline act in the London part of Guinness’ Arthur’s Day party. The event is coming to Britain for the first time since the event’s inception four years ago. Arthur’s Day - first held in 2009 on the 250th anniversary of Arthur Guinness signing the 9,000 year lease to the Dublin brewery - will take place on Thursday 27 September. The Great Britain leg will be marked with live music events in the 30 official Arthur’s Day pubs in the surrounding area of London’s Senate House and on the principal stage nearby.

John Lewis first UK retailer to use revolutionary new coffee system: The John Lewis store in flagship Milton Keynes has become the first retailer to use a “revolutionary” new coffee system because it helps its staff do two things at once. John Lewis has installed a swan neck tap-like TopBrewer dispensing system at its Place to Eat customer restaurant. Orders via iPhones and iPads will be enabled when the TopBrewer application is launched on the Apple App Store, enabling consumers to tailor each drink to their personal requirements, order and pay for their beverage. Simon Bracken, managing director of Scanomat in the UK, said: “The UK is a nation of coffee lovers and Apple fanatics. It’s something that people are passionate about and can’t live without - 70 million cups of coffee are drunk each day in the UK and 11.5 million people in the UK own an iPhone. TopBrewer is bringing together these trends with the most innovatively designed coffee system of our generation.”

Wagamama names opening date for prime Lincoln site: Wagamama has revealed it will open its new prime site in Lincoln on 7 November. The new Wagamama is being built on the site of the former Harbour Masters Office on the Brayford marina, opposite the Odeon multiplex cinema and a JD Wetherspoon site.

Tesco signs lease to open Enterprise pub in Portishead as a convenience store; Loungers seek local support to convert convenience store open site: Tesco has signed a lease to take over Enterprise Inns’ Royal Oak pub and plans to convert it into a convenience store in the New Year. Because the pub is classed as a retail business, no change of use planning permission is needed. Meanwhile, ironically, Loungers has asked for support in persuading North Somerset Council to grant planning consent to allow the conversion of a former Budgens on the high street to a cafe bar. One supporter notes online: “From an aesthetics point of view, the proposed cafe would be an improvement over the very dated and utilitarian shopfront of Budgens.”

Travelodge hires former Premier Inn marketer on full-time basis: Budget motel chain Travelodge has hired former Premier Inn marketing executive Catriona Kempston as its sales and marketing director. Kempston has worked at Travelodge in an interim capacity since earlier this year. She is credited with involvement in the rebranding of Premier Travel Inn to Premier Inn and the introduction of Lenny Henry as brand ambassador.

Ulverston latest town to oppose Costa Coffee arrival: Ulverston in Cumbria has become the latest town to oppose the arrival of a Costa Coffee site in town. An application to open by franchisee Purple World, which has nine Costa Coffee stores in and around Cumbria, has divided council members, who narrowly voted to oppose the planning application on Monday. Arguing against the plans, councillor Jane Harris said: “Costa is a national chain which, in my view, undermines the economy in Ulverston. It sources from outside the area and will steal business from local coffee shops. We want people to use Ulverston for shopping – we already have plenty of coffee shops.”

Soho House to open five more sites: Soho House, the private members’ club provider headed by Nick Jones, will open five more sites in the next two years – in Toronto, Barcelona, Chicago, Istanbul and Mumbai. Jones told Bloomberg the expansion will add 10,000 members to the existing 28,000. In January, US supermarket billionaire Ronald Burkle bought a 60 per cent stake in Soho House for £250m, valuing Jones’s remaining ten per cent at about £42m. Soho House worldwide turnover rose 19 per cent to £132m in 2011. It turns over £47m in the UK.

Waxy O’Connors and Rainforest Café operator reports sales and profits increase: Glendola Leisure, the 18-strong company headed by Alex Salussolia that operates the Waxy O’Connors chain and the Rainforest Café business off Piccadilly Circus, has reported turnover climbed to £28,511,000 in the year to 31 March, up from £24,814,000 the year before. Pre-tax profit rose slightly to £1,894,000 from £1,859,000 the year before. The company stated: “The group has had a very solid performance under very difficult circumstances.” The group acquired two freeholds in Scotland run under the Frankenstein brand and the lease of The Cricketers in Cobham during the year. Frankenstein’s in Glasgow was rebranded to Horton’s, a modern all-day bar offering while The Cricketers, an Enterprise lease, saw investment inside and outside to create improved external space. Glendola made an operating profit for the year of £2,278,000 compared to £2,374,000 the previous year. Glendola added: “The group has a number of key performance indicators, the principal one of which is net Ebitda. At 31 March 2002, this was £2.1m (2011: £1m). This increase is primarily as a result of the acquisition of new businesses, funded through new borrowing, part way through the year.” Salussolia told Morning Briefing that the Olympics had been “very poor” with an improvement during the Paralympics. He added: “We’re now back to normal business levels and showing growth.” Glendola has a site in Scotland at contract stage, with plans for a new concept that will be the company’s second destination venue after The Cricketers. “It’s an exciting project for us,” said Salussolia.


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