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Morning Briefing for pub, restaurant and food wervice operators

Wed 12th Dec 2012 - Aagrah, Wear Inns and Whitbread

Story of the day:

Whitbread eyes new growth opportunities for Costa Express: Whitbread has opened more Costa Express machines in the past year than Coffee Nation, the business it bought as a growth platform, did in its 11 years of existence, chief executive Andy Harrison has reported. The company set a target of 3,000 Costa Express machines in the UK when it bought Coffee Nation and is “well ahead of the acquisition plan” with 1,300 machines due to be installed this financial year. Harrison told City analysts: “We’ve done a great job installing Costa Express machines in UK petrol stations and motorway service stations. The next chapter (for Costa Express) is to look at new sectors such as corporate and international opportunities. It’s now just a question of finding the right quality of locations.” Whitbread has reported that machine volumes increase by 20 per cent each time it converts a Coffee Nation machine to a Costa Express. Harrison said the 638 Costa Express machines installed at Shell service stations this year were “going very well indeed”. Meanwhile, Whitbread has set a revised target of 330 Costa Coffee openings around the world for the current financial year – slightly down from the original target of 350. Harrison played down the effect of Starbucks’ recent negative publicity on the 7.1 per cent like-for-like sales increase at Costa in the most recent quarter. “It is impossible to disentangle the Starbucks effect – this is almost entirely about UK consumers voting with their tastebuds,” said Harrison. He conceded, however, that Costa like-for-likes had been aided by the most recent quarter comparables with September and October 2011 when there was a long Indian summer. Analysts also asked whether Whitbread’s Premier Inn business was benefiting from the financial stresses at main rival Travelodge. Harrison said: “The gap between our product and their product has been growing as they haven’t been spending as much money maintaining it.”

Propel Quarterly magazine available online: The winter 2012 edition of Propel Quarterly magazine is now available to view online at http://content.yudu.com/Library/A204bg/PropelQuarterlyWinte/

ALMR National Restaurant Show Study Tour in Chicago open for bookings: The Association of Licensed Multiple Retailers (ALMR) has opened its study tour to the National Restaurant Association Show in Chicago in May 2013 for bookings. Next year’s visit takes place between Thursday 16 May and Monday 20 May. The ALMR launched its first study tour trip to the NRA show this year, with the trip led by Propel Morning Briefing managing director Paul Charity. The NRA draws 58,000-plus industry professionals from all 50 states and 100 countries, all seeking the newest innovations and up-to-the-minute information about trends and issues. The ALMR trip provides: insights from industry experts on the rise in fast-casual dining, social media, new and emerging brands, menu development, staff management and a host of other issues – with 70 free education sessions; involves a tour of Chicago’s hottest concepts and a market overview briefing sessions from US experts. ALMR chief executive Nick Bish said: “Our first trip in May this year was a tremendous success with our attendees reporting they had benefited enormously from the visit to the Show and the chance to study the key trends in the innovative US market.” Paul Charity, managing director of Propel Info, said: “The NRA show is a fantastic opportunity to find fresh inspiration and understand the emerging trends shaping the fast-changing US market.” To book a place, e-mail Jo Charity on jo.charity@propelinfo.com or call her on (01444) 810304. Places are limited.

Industry news:

Pub and restaurant like-for-like sales up 3.4 per cent in November: Britain’s leading pub and restaurant chains saw a bounce-back in sales in November thanks to later school half-term holidays. Collective like-for-like sales were up 3.4 per cent on the same month last year, according to latest data from the Coffer Peach Business Tracker, the industry’s sales barometer. The result follows a 1.7 per cent like-for-like sales decline in October caused by school holidays in many parts of the country being in November this year against October last. Total sales among the 24 companies contributing to the Tracker data were up 6.5 per cent in November, against a more modest 1.6 per cent increase in October, reflecting continued new outlet openings by the leading operators. “School half terms are invariably a good time for eating-out sales, with London trading ahead of the rest of the country last month and restaurant chains doing marginally better than pubs too,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the sector Tracker, the sector’s biggest and most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS. “However, the big half-term boost at the start of the month masked a more sober performance over the rest of November,” added Martin. “Sales in latter weeks were depressed as people appeared to be more reluctant to go out, possibly saving their cash for December’s pre-Christmas period. The market will hope so.” Underlying Tracker figures for the 12 months up to the end of October show combined year-on-year like-for-like sales running ahead 1.5 per cent, broadly in line with the general trend for 2012. Regionally, the Coffer Peach figures showed the London market trading more strongly than outside the M25 during November.

Tax soft drinks to improve health: Research by Auckland University, published in the Plos Medicine Journal, has argued that taxing soft drinks by ten per cent would reduce the amount that people consume by up to a quarter. The overview of 32 international studies on food and drink pricing concluded that a tax of soft drinks and saturated fats would improve people’s diets. The report also concluded that subsidising healthy foods such as fruit and vegetables by ten per cent would increase their consumption by eight per cent.

Seven brewers send beer to London for mass lobby: Seven brewer members of the Society of Independent Brewers (SIBA) are sending ales to Westminster today in support of an anticipated 1,000-strong mass lobby. Seven brewers, most of them from SIBA’s south east region, are providing beer: Foundry Brewery and Canterbury Ales, both from Canterbury; Ramsgate Brewery; Westerham Brewery; Sambrooks and Redemption breweries from London and Titanic, the Stoke-on-Trent brewery owned by SIBA chairman Keith Bott. Julian Grocock, SIBA chief executive, said: “We’re delighted with the momentum that has built behind the Save your Pint campaign, thanks in part to the efforts of many of our members. We were disappointed with the Treasury’s refusal to review the beer duty escalator ahead of the Budget, despite the vote in Parliament in favour of one. The mass lobby will be another chance for us to show the government the strength of feeling over beer duty among drinkers who resent paying so much more for their beer than their European neighbours, and who are saddened by the continuing pub closures.”

US foodservice sector forecast to grow by 3.8 per cent in 2013: The US foodservice industry is expected to post its fourth consecutive year of sales growth in 2013, with an estimated 3.8 per cent increase in sales to $660.5 billion, according to the National Restaurant Association’s 2013 Restaurant Industry Forecast. The forecast expansion next year for the US’s 980,000 restaurants follows this year’s growth of 4.2 per cent, the largest growth year following the recession-lined drops of 2008 and 2009. In inflation-adjusted terms, real sales growth in 2013 would total 0.8 per cent, following 2012 inflation-adjusted growth of 1.3 per cent.

McDonald’s launches two-for deal in Canada: McDonald’s has launched a “Two Can Dine for $9.98” campaign in Canada, despite its traditional avoidance of such deals - two Big Mac Extra Value Meals can be had for the special price through to 23 December. A further indication that McDonald’s is willing to discount in the wake of its very poor October sales comes in Chicago, where a McRib is being advertised for just $1 with the purchase of an Extra Value Meal. If results are good, it is thought the offer will be used more widely when the McRib is launched for Christmas across the company next week.

Company news:

Punch Taverns chief executive dismisses Greggs rumours: Punch Tavern chief executive Roger Whiteside has dampened speculation that he might apply for the newly vacant chief executive’s job at Greggs, where he serves as a non-executive director, in the wake of news that current chief executive Ken McMeikan is leaving for Brakes. A number of industry observers had suggested to Propel Morning Briefing that Whiteside, who has experience of food retailing as a former head of food at Marks and Spencer, might be the ideal candidate to step into McMeikan’s shoes. However, Whiteside told Morning Briefing: “I’m not applying for the job.”

Orchid to expand chef apprenticeship scheme in 2013: Managed operator Orchid is to expand his chef apprenticeship scheme next year to offer more places. The move follows the successful launch of a scheme in March this year that has seen ten apprentices getting hands-on experience of working in a pub kitchen as well as qualifications in areas such as food hygiene and safety, managing and training staff, produce ordering and control and menu development.

New Moon Pub Company opens third site: New Moon Pub Company, headed by Paul Newman and chef Dave Mooney, opens its third pub today - The Hanging Gate, in Sandy Lane, Weaverham. The company, which also operates the Lord Binning, in Kelsall, and The Old Sessions House, in Knutsford, have spent around £250,000 extending and refurbishing the former coaching inn, which now has a new kitchen, space for 100 diners and a pub area. Mooney said: “We’ve really tried to embrace the local community, and we hope they reciprocate. Our food is just good and simple – it’s the best produce for the best price and we start the search at the back door. At the end of the day all our pubs are led by the same things – good food, ale and wine and pretty decent surroundings.” The opening creates 25 new jobs in the village and the company is also working with Mid Cheshire College to recruit two new apprentices for each of its venues.

Bumpkins re-jigs menu at Westfield to boost trade: Restaurant chain Bumpkin has re-jigged the menu at its flagship Westfield site after trade at the location proved to disappointing. The brand has introduced extended lighter options with lower price points. The company’s other two sites have retained their existing menus. 

Meat Liquor partners open third site on Friday: Businessmen Scott Collins and Yianni Papoutsis, who operate London burger restaurants Meat Liquor and Meat Market, will open their third site, Meat Mission, on Hoxton Market in east London this Friday (14 December). It is located in a former Victorian Christian mission building. The pair also hope to open a restaurant in Brighton next year.

Gordon Ramsay to open two Las Vegas restaurants before Christmas: Chef Gordon Ramsay will open two restaurant sites in Las Vegas before Christmas. Gordon Ramsay’s Pub & Grill will open on 18 December in Caesars Palace and a burger joint at Planet Hollywood called BurGR opens on 22 December. The former offers “the most authentic English pub experience in Las Vegas, as only a native UK chef can provide” and at the latter customers are promised: “The BurGR menu will take the traditional burger, fries and milkshake comfort food combination to an entirely new level with selections like pork belly bao buns, sweet potato fries with vanilla powdered sugar and pudding shakes - a heavenly combination of thick milkshake and silky pudding.”

Prezzo to open first site in Northern Ireland: Restaurant group Prezzo is to open its first restaurant in Northern Ireland. It will open its Italian restaurant in Belfast in March 2013 on the site of a former La Tasca restaurant. The company is spending more than £550,000 redeveloping the site in the restaurant quarter of Victoria Square Shopping Centre. The restaurant will have 144 covers; 80 internally and 64 in the mall seating area. Prezzo chief executive Jonathan Kaye, said: “We are looking forward to opening a Prezzo restaurant in Belfast. It is a natural extension to our expansion plans in England, Scotland and Wales.”

Asian restaurant brand Aagrah to add Ilkley site: Indian restaurant chain Aagrah, which was founded in 1977, will add a new site in Ilkley to its 16-strong estate next year. The company has submitted a planning application to convert The Green Health Shop, in the Moors Shopping Centre, to a new site. Chief executive Mohammed Aslam said: “We are hoping to be open by mid-March at the latest. We totally believe that Ilkley is about quality rather than quantity and it is very close to my heart.” Planners are expected to make a decision about the proposals by 20 December.

Epos provider Zonal reports turnover increase: Epos provider Zonal has reported turnover has risen to £36m, up from £14m three years ago. The company made £2.6m and £2.7m pre-tax profit in 2010 and 2011, but this year’s profit is down to £1m because of £1m of investment. “We spent lots of money this year because we still design our own hardware,” managing director Stuart McLean told The Herald in Scotland. The company has opened an innovation centre in Oxford as a sales and training area and showcase for its products. “We have made it a bit like a coffee shop leading into a high-tech room,” McLean added. “This is where we take customers, and we wanted it to be different so people remembered it. It has been hugely successful.”

Enterprise Inns pub in Tetbury to re-open with six bedrooms: A historic Enterprise Inns pub in Tetbury, The Royal Oak, which dates back to 1781 but which has been closed since January, is set to re-open in May 2013. New tenant Chris York has begun work on restoring the roof of the pub and plans to redevelop the first floor and the external outhouses. “Our collective aim is to sympathetically renovate this Grade II listed Cotswold gem and create six beautiful guest rooms,” he said. “We hope that both the local community and visitors to Tetbury seeking good food and drink, including locally sourced real ales and ciders, fantastic wines, spirits and cocktails, will come and enjoy a warm welcome in a creative and friendly environment.”

Marston’s opens new-build pub in Bourne, Lincolnshire: Midlands based brewer and retailer Marston’s has opened a new-build pub, The Sugar Mill, located on the outskirts of Bourne, Lincolnshire. The new Marston’s pub, near the Elsea Park roundabout in South Road, has an indoor play area for children.

Stonegate invests in Bedford pub to increase daytime capacity: Managed operator Stonegate re-opens its Rose pub in Bedford tomorrow after a three-day refurbishment to increase day-time business with the installation of booth seating. Paul Dawson, The Rose’s general manager, said: “This is a great time for the company to invest in The Rose’s appearance with Christmas shopping and celebrations bringing increased footfall into the town centre. With our new look and additional seating to increase daytime capacity, we hope that we will be able to capitalise further on that footfall that has already started to reflect in our recent food sales.”

Ministry of Sound seeks head of digital marketing: Nightclub company Ministry of Sound is the latest company looking to recruit a head of digital marketing. The job specification states: “Reporting to the chief executive, the head of digital marketing will oversee all central group marketing activity including websites, social media, digital TV and internet radio, mobile applications and online marketing platforms in new international markets.”

Brakes – McMeikan will oversee £250m investment: Fresh and frozen food specialist Brakes has stated that its new chief executive Ken McMeikan, who will join once his current employer Greggs has recruited a new chief executive, will oversee a five-year £250m investment plan that will see the company boosting its supply chain and product development, computer systems and staff training. The news of McMeikan’s arrival, announced on Monday, comes 11 months after the departure of Stefan Barden, who had been with the company as chief executive for just one year. Earlier this year, Brakes moved to strengthen its management team with the recruitment of former Mitchells & Butlers director of marketing and strategy Adam Martin as director of customer solutions.

JD Wetherspoon flushed with success at Loo awards: Managed operator JD Wetherspoon has swept the board in the pubs and wine bars category of the Loo of the Year Awards 2012, being named as the national category award winner in England, Scotland, Wales and Northern Ireland. The four pubs that won the individual titles were; The Bell (Amesbury), The Sir Samuel Romilly (Barry), The Prestwick Pioneer (Prestwick) and The Ice Wharf (Londonderry). Wetherspoon’s chief executive, John Hutson, said: “We are delighted with the awards. Our staff maintain their pub toilets to the highest standards at all times and this is reflected in the judges inspections. We will continue to provide our customers with the best loos at all times.”

Bramwell completes 2012 investment programme; plans £10m investment over the next three years: Branwell Pub Company, formerly known as Barracuda, has completed its £2m investment programme since its inception in September with the opening of the Cornhill in Bridgwater. The refurbishment programme has included pubs within the newly segmented trading formats across the breadth of the UK: from Cardiff to Middlesbrough and Gainsborough to Bridgwater, including Locals and Town Centre pubs. Roger Moxham, chief executive of Bramwell Pub Company, said: “We are delighted with the performance of our investments, the refurbishment programme has received an excellent response from both our customers and our teams in every one of the pubs. The property team has worked in partnership with architects and designers to create some fantastic looking pubs introducing state-of-the-art technology and innovative design as well as making good the neglect of recent underinvestment. The capital spent has seen the development and evolution of the pubs trading areas, designing them to be better targeted and relevant to our customers. We’ve created vibrant and flexible spaces so that all that of our customers can relax, socialise, drink and dine. 2013 will see us continue to invest in our pubs with over £10 million earmarked for the next three years. This, combined with our customer service programme, consumer-led insight and quality food offer will ensure we drive up our sales, satisfy our customers and engage our teams across UK.”

Wear Inns to complete TCG pub refurbishment by end of next month; aims to add 14 pubs next year: Wear Inns, the north east managed multiple headed by John Weir, will have completed the refurbishment of the 11 pubs it has acquired from fellow managed operators TCG and Orchid by the end of next month. The County Durham-based firm, which now owns 26 pubs across the north east and Yorkshire, has plans to expand its portfolio to 40 by the end of next year. Managing director John Weir told north east Business: “Each of the 11 pubs will undergo a refurbishment of between £150,000 and £200,000 to give it a more traditional look. We have completed nine of the 11, with the final two in Sheffield and Barnsley to be done by the end of January. We are looking to expand our pub portfolio in the north east and Yorkshire only. Our turnover in 2011 compared to 2012 prior to buying the pubs increased by £1.2m. Our reported turnover in 2011 was £6.2m and in 2012 it was £7.4m. The addition of the 11 pubs will take turnover above £13m. We are interested in individual pubs or pub chains which are, or have the potential to be, community hubs. We see an opportunity to buy good freehold properties. The majority of our pubs are on iconic sites and well-known in the past but which, for a variety of reasons, have not attracted investment. Our plan is to refurbish each one and develop them into a traditional local pub, which is at the heart of the community.”

Former MD of Games Media and Barcrest to lead bingo and adult gaming tech solutions provider: Andrew Ludlow, the former managing director of Games Media and Barcrest, is to make a return to the bingo and adult gaming centre (AGC) industry, joining the growing technology business NRM Group. Ludlow is joining the board of the East Yorkshire-based systems and technology solutions provider as managing director with immediate effect. The entrepreneur – one of the original founders of Games Media – also plans to take an equity position in the business. NRM, which was founded in 1994, provides state-of-the-art networking and communications services to the leisure and gaming sectors from its purpose built facility in Hull. Its clients include Rank Group, Gala Group, The National Bingo Game Association and other leading AGC and Bingo operators.

Walkabout plan in Middlesbrough is thwarted: A scheme to invest £300,000 in The Walkabout in Middlebrough has been thwarted after a request to add an hour to trading though to 3.30am from Wednesday to Saturday was turned down. Solicitor Niall McCann told the hearing that the scheme, which includes a late-night kitchen, was only viable if the additional opening hours application was granted.

Indian investor buys first UK site, Ramada Birmingham Solihull, off £7.5m asking price: Indian company SGS Hotels has bought the 145-bedroom Ramada Birmingham Solihull off an asking price of £7.5m. It was sold by agent Christie + Co on behalf of the joint administrators of Ailsa Solihull Limited. SGS Hotels (UK) Ltd is looking to build a small hotel group – it’s a subsidiary of Indian company Subhash Gulati Group, which has interests in shopping malls, infrastructure development and aviation, as well as hotels. Gavin Wright, director of Christie + Co, said: “This well-located hotel is an excellent first acquisition in the UK for SGS Hotels (UK) Ltd. Following the property going into administration and a subsequent reduction in asking price to £7.5m, we generated a number of viewings and received a total of eight offers in a very competitive best and final offers process.”

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