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Morning Briefing for pub, restaurant and food wervice operators

Fri 21st Dec 2012 - Pre-Christmas catch-up: Batemans, Masala Zone and Starbucks

Story of the day:

Batemans opens classic Victorian parlour pub with no pints or halves on sale: Lincolnshire brewer and retailer Batemans has opened a site in Boston, Lincolnshire as a classic Victorian parlour pub that only sells cask ale in one-third and two-third pint glasses. The former Indian Queen, once a live music venue, has re-opened as the Indian Queen and Three Kings with classic Victorian parlour pub design such as tiled floors, an open fire, booth seating and comfy armchairs – music, dart boards, AWP machines and pool tables are all banished. The food offer is Lincolnshire tapas with sausages, pork pies, stuffed chine and scotch eggs, all sourced from within the county and a choice of six cask ales, and an English-brewed lager and stout. The pub, which is Batemans fifth managed pub, saw takings increase six-fold in its first week of opening. Managing director Stuart Bateman told Morning Briefing: “There are people in Boston who wouldn’t have dreamt of stepping foot in the Indian Queen before the refurbishment. It’s become a talking pub – somewhere you can enjoy good beer and a conversation. A group of brewers take a trip away once a year and last year we went to Dudley where I saw pubs to die for – classic pubs choc-o-bloc with customers. I thought to myself, ‘I’ve got to do that style of pub’.” Two-third pints are being sold for £1.95 at the Indian Queen and Three Kings, a price that makes a decent serving of beer more affordable, said Bateman. The opening of the pub follows the conversion a short while ago of Bar 1874 in Boston to Nikita’s, a pub that caters for the town’s large Portuguese community.

Propel Multi-Club conference: The first Propel Multi-Club conference takes place at One Moorgate Place, London EC2R 6EA on Tuesday 19 March and multi-site companies can book two free places each on a first come, first serve basis. The speaker list will be unveiled next month. E-mail jo.charity@propelinfo.com to book places.

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/

Industry news:

Perception Group appoints Keith Knowles as chairman: The Perceptions Group, which aims to improve perceptions of the pub and bar sector, has appointed Keith Knowles, chief executive of Beds and Bars, as its first chairman. The group was formed by a collection of like-minded people who work and operate within the pub and bar sector with a passion is to raise the profile of the great range of careers that are on offer within the thousands of pub businesses across the country. Said Knowles. “We have really started to motor on our pub careers initiative which has been driven with the support of passionate operators such as Yummy Pubs who have demonstrated that by providing structured work experience we can create a channel for enthusiastic young people to come in and experience what we have to offer in terms of careers.” The group recently announced a call for operators to join forces in creating 15,000 work placements throughout 2013-14. The initiative has been supported financially by the recently formed Hospitality Guild and will enable operators small and large to participate in the programme. Anthony Pender, director of Yummy Pubs, has been appointed vice-chairman and will support Knowles in engaging employers from both the retail and supply side of the industry. “We have a real opportunity to demonstrate that we are a professional, responsible industry that offers people of all abilities the opportunity to shine and have a fulfilling and worthwhile career.” To get involved with the careers initiative email info@hospitalityguild.co.uk

Inflation for vegetables hits 5.5 per cent: The rate of inflation for vegetables, including potatoes, has hit 5.5 per cent in 2012 and is expected to rise further, according to a report by Prestige Purchasing. The findings are part of a wider analysis that predicts that, across all categories of food and drink, the inflation rate will increase by over one third, from 3.3 per cent in 2012 to 4.5 per cent in 2013. David Read, chief executive of Prestige Purchasing, said: “What we’re seeing is a surge in food inflation which will continue into 2013. We may even in due course be heading back towards 2008 levels where food inflation peaked at over eight per cent. This would obviously have quite an impact on the catering and hospitality trade. Smart catering and hospitality operators need to explore mitigating options to manage the impact of food inflation. Single site operators can enhance their buying by utilising tools like benchmarking and market reports to ensure they are managing their business to meet these changes. In addition, multi-site operators can focus on more sophisticated techniques like distribution and sourcing optimisation.” 

US operators set to invade London in 2013: A host of US brands and single-site operators are set to open in London next year. Among the expected openings are: Andrew Balazs, of New York restaurant The Standard and Keith McNally’s Balathazar brasserie set to open in Covent Garden. Multi-site brands set to open include: New York’s Mexican brasserie La Esquina, The Bubba Gump Shrimp Company, milk shake company Shake Shack and better burger operator Five Guys. “All things American are going to be huge next year,” Catherine Hanly, editor of restaurant website Hot-Dinners.com, told The Evening Standard. “American operators have been watching how people from there have performed in London and can see that it’s an incredibly vibrant and exciting market right now.” 

Geof Collyer – mergers and acquisitions may return in 2013: Deutsche Bank leisure analyst Geof Collyer has forecast that 2013 may see an uptick in mergers and acquisitions activity in the sector. He said: “We still see merit in a nil premium merger between Mitchells & Butlers (M&B) and Greene King, although we would expect that M&B’s major shareholders will give the new chief executive time to make his mark and for the significant cultural re-engineering of M&B to be completed. We also discussed the merits of a merger between the privately owned Stonegate and Spirit Pub Company, since it could both bulk up the group’s scale and sort out the latter’s over-leveraged balance sheet. During 2011, pubs and restaurants quietly outperformed the general retail space with pubs outperforming restaurants, though in 2012 it has been a closer run thing. In 2011, the Coffer Peach Business Tracker only reported negative like-for-likes for May (-0.3 per cent), whereas so far in 2012 like-for-likes have been negative for five months of the year and December has the toughest comp (+9.9 per cent in December 2011) since the Tracker began back in January 2009. Looking out to 2013, we believe the affordable treats / luxuries / general escape from the economic storm / low ticket spend nature of pub retailing plays well to a cash-strapped UK consumer. We would maintain our focus on those groups that have been consistently outperforming the Coffer Peach data, especially those which have a more London and south east bias – namely Greene King (buy) and Spirit (hold). Spirit (+47 per cent year-to-date 2012) has been the best pub share price, excluding Enterprise Inns. We believe the major pub retailers will continue to deliver positive like-for-likes into 2013. Performance will be driven by targeted capital expenditure, like-for-likes, cost control and maybe mergers and acquisitions.”

Technomic – consumer report more visits to the pub: Consumers report increased visits to pubs, with 61 per cent of consumers frequenting pubs more often than once a month, compared to just half (47 per cent) reporting the same incidence a year ago, according to a report by foodservice insights and research firm Technomic. However, more consumers are calling on pubs to place greater focus on food offerings and expand their menus to serve a wider variety of dayparts and foods that emphasise freshness, quality and health. “Consumers look to pubs for more than just traditional English fayre and a pint,” said Technomic managing director Darren Tristano. “By expanding innovative flavours and higher quality foods, providing a more comfortable and inviting ambiance and focusing on high quality service these pubs can satisfy several key consumer motivations. Pubs that can differentiate themselves across these metrics can really thrive.”

Newcastle orders bar owner to charge £1.25 per unit: Newcastle City Council has ordered two bars operated by veteran leisure entrepreneur Joe Robertson to charge customers a minimum of £1.25 per unit of alcohol at his two new venues - Decantus and The Grey Street Cafe Bar and Grill – as a licensing condition. It means a pint of strong lager would have to be sold for a minimum of £3.50. Coun Henri Murison told the local newspaper: “We want more venues like this if anything. By introducing these conditions on new licences, we are sending a clear signal that we want to move away from the Geordie Shore image. That is not what we think Newcastle is about. If there are more quality establishments that want to come here, they are very welcome, but just like the conditions we have imposed on this venue, we want to ensure they will be responsible in their actions.”

Suzy Jackson – 14,000 in the sector will work on Christmas Day: Executive director of the Hospitality Guild Suzy Jackson has reported that over 14,000 men and women in the hospitality sector will work on Christmas Day this year. She said: “It’s clear that we expect more and more from those who work in the industry – 78 per cent more people will work on 25 December than this time eight years ago. These people deserve recognition and respect for the long hours they put in and it nicely proves the dedication of people in hospitality.”

SNP sets out plan to ban alcohol purchases online from outside Scotland: The SNP government has set out new proposals to ban the purchase off cut-price alcohol online from outside the country. The plan is a follow-up to legislation passed in 2010 to crack down on two-for-one alcohol promotions. A Scottish government spokesman aid: “We re consulting on a variety of proposals to strengthen the powers of licensing boards and the police, including the measures concerning alcohol purchases made from Scotland that are dispatched from England.” Observers questioned whether the move broke EU regulations on the free movement of goods and services between member states.

Company news:

Masala Zone reports turnover up, profit stable: Restaurant operator Masala, which is incorporated at Companies House as MW World and runs Masala Zone and to-end Indian restaurants such as Veeraswarmy and Chutney Mary, has reported turnover rose by £514,000 to £17,778,477 in the year to 25 March 2012. Pre-tax profit rose to £1,794,919 from £1,759,940 the year before. The company stated: “The restaurants continue to have high level of recognition by the public and the trade. In 2011-2012, we took on concessions in Selfridges, London. We continue to refine all aspects of the operations to meet the challenges of a highly competitive environment.” An interim dividend of £1.6m was declared.

Pizza oven boosts Camden Eye food sales by 25 per cent; considers private members’ club: New Pub Company, led by Peter Linacre, has reported that the installation of a wood-fired pizza oven at its award-winning Camden Eye pub, which is overseen by BII Licensee of the Year Mahdis Neghabian, has boosted food sakes by 25 per cent. Linacre told Morning Briefing: “Trade is up by 25 per cent. The pub didn’t serve food three years ago and now we’re about to hit the £10,000-a-week mark. In the New Year we’ll start doing takeaways as well. “ Linacre said the company is now considering converting the pub’s second floor and gabled area into a private members’ club and smoking terrace. “There isn’t a private members’ club in Camden at the moment,” he added.

Star Pubs and Bar reports turnover of £92m in 2011: Star Pubs and Bars, the company that was formerly known as Scottish & Newcastle Pub Company, has reported turnover dropped to £92,446,000 in 2011 from £113,951,000 the year before when it managed a larger portfolio of pubs. The company’s parent Heineken acquired the freeholds of the 918-strong RBS estate it had previously managed on 1 December 2011. Accounts filed at Companies House report that the company was owed £17,009,616 at the end of December 2011 and this sum has been treated as an “exceptional administrative expense” given the “expectation that these amounts will not be recoverable”. The company had a loss after tax of £29,734,000 compared to a profit of £15,191,000 the year before. 

Crown Carveries launch Kids Eat Free on Sunday offer: Crown Carveries, the budget carvery chain owned by Mitchells & Butlers and operating 116 sites, has launched a Kids Eat Free on Sunday offer that applies to every Sunday from 23 December until 10 February. The offer is valid for children under ten eating with an adult that has ordered a full-price Sunday roast.

Bob Ivell stepped in as executive chairman at Mitchells & Butlers for £600,000 per annum: The Mitchells & Butlers annual report shows that Bob Ivell stepped in as executive chairman on 26 October 2011 for remuneration of £600,000 per annum – the appointment was terminable by either party on one month’s notice. He earned £582,000 during the financial year as he was not executive chairman for the entire year. Ivell stepped down as executive chairman to become non-executive chairman, on a salary of £275,000 per annum on 12 November this year, with either party able to terminate the agreement without notice. The new chief executive Alistar Darby was appointed on a salary of £525,000 per annum. Deputy chairman Ron Robson is being paid £200,000 per year.

Breakfast Club adds two new sites: All-day licensed café chain Breakfast Club has completed the acquisition of two new London sites, following a reported 25 per cent increase in sales year-on-year. Davis Coffer Lyons has secured units at 5-9 Battersea Rise SW11, formerly Le Bouchon Bordelais restaurant, a triple-fronted 3,703 sq ft unit next door to the Strada. The concept has also acquired a site currently being refurbished at 11 Southwark Street, SE1, a shell unit close to Borough Market and London Bridge underground station. A new lease was granted at the 3,907 sq ft property, residing close to nearby occupiers Roast, Brindisa and Monmouth Coffee. Both acquisitions have A3 planning use, occupying ground floor and basement. The new restaurants complement the Breakfast Club’s existing portfolio comprising Hoxton, Angel, Soho and Spitalfields. The Spitalfields site also includes the concept’s first foray into the bar market with an ancillary 40-cover speakeasy and cocktail bar called the Mayor of Scaredy Town. The Breakfast Club was founded in 2005 and has grown steadily during the recession. It is centered around an ethically sourced, freshly prepared breakfast range from traditional English to Pancakes and Eggs Benedict, to mueslis, porridge and fruit salads. Its all-day offer also includes wraps, burgers, burritos, pies, sharing plates and salads.

Marston’s chief executive Ralph Findlay sees £51,000 pay rise: Marston’s chief executive Ralph Findlay saw his total remuneration increase from £696,004 to £747,490 in the most recent year – his earnings were boosted by a £192,000 bonus on top of a basic salary of £480,000. Chief operating officer Alistair Darby, who resigned from the board on 10 September to join Mitchells & Butler as chief executive a month later, earned £300,000 and did not receive a bonus. Finance director Andrew Andrea earned £447,957, only slightly more than the £443,329 he earned the year before – he earned a bonus of £120,000 on top of his basis salary of £120,000.

Harrison Design rolls out new look to 30 US TGI Friday’s: UK-based Harrison Design is overseeing the roll-out of a new design to 30 existing TGI Friday’s sites across the US, and in new restaurants, most recently in Nashville, Tennessee. Founder Philip Harrison said: “TGI Friday’s has to be one of the most iconic restaurant brands in the western world. It has over 900 sites globally. One of our key areas of focus for the TGI Friday’s product is on ‘brand drift’. As is usually the case with high profile names in long-term existence, market positioning gradually ebbs away from some of its key values. We are helping owner Carlson re-connect with the brand’s core propositions and re-invigorate its unique selling points in an impactful way for a modern customer marketplace. The concept is moving from one of functionality to one of personality.” Harrison explained that the changes the company are currently making to the brand reflect the complex nature of service positioning in the US’s diverse hospitality market. He said: “Zoning is very evident in the new layout, with the bar, dining and flex areas merging effortlessly and creating an effective flow for the infectious TGI Friday’s energy. This whole approach has been fully supported by Carlson, and this is manifesting itself in the high quality of materials and fixtures that we are able to specify.”

Cleethorpes operator opens third site: Cleethorpes operator David Butler has opened his third site in the town – he has re-opened Harvey’s Bar as Harvey’s Lounge and Kitchen with a strict over-25s policy after a £250,000 refurbishment. Butler also operates the Coach House and opened The Wine Bar and Kitchen on Sea View Street, formerly Mercer’s, earlier this month. Manager of Harvey’s Andrew Fisher said a bar for older people is exactly what the resort needs. He added: “There are plenty of bars for the 18-25 age group but nowhere older people can go and enjoy a nice drink in a safe and calm atmosphere. The surroundings are very nice and in-keeping with the boutique-style bar which the new owner is trying to create in this area.”

Honeystreet Ale re-opens “crop-watchers” pub headquarters: Wiltshire micro-brewer Honeystreet Ales, whose brews reference crop-circles and other UFO folk-lore (it has a brew called Area 51), has re-opened the unofficial pub headquarters of crop-circle watchers, the canal-side Barge Inn at Honeystreet. The 200-year-old tavern closed at the end of October after it had been run as a community project with the aid of £430,000 Lottery funding. Honeystreet Ales is building an oak barn next to the pub. Officially known as The Barefoot, but affectionately just known as The Shed, it will open next summer as an inspirational space for the arts.

New Malaysian restaurant opens in Westfield: A new Malaysian restaurant has opened at Westfield London with plans to add two more next year. Penang offers 128 covers over two floors and serves Malaysian classics, with a focus on sharing. Penang communications director Louise Mackintosh said: “Malaysian cuisine is varied and sensational but relatively unknown in the UK - there are fewer than 70 Malaysian restaurants across the whole country, compared to over 1,000 Thai restaurants within the M25 alone.”

Arizona Group saves Close Imperial pub from residential development: Arizona Group has acquired the Alma Bar and Restaurant in Chelmsford from Close Imperial Pub Company. Arizona provides the licensed retail sector with specialist business services and solutions and is now expanding its services into acquiring freehold public houses. Bill Colquhoun, director at agent Christie + Co, who handled the sale, said: “We sold The Alma on behalf of a corporate operator, with the sale simultaneously exchanging and completing to enable the incoming purchasers to benefit from seasonal trade. Our marketing generated multiple offers from buyers considering a range of alternative uses, including residential development of the site, which has a large car park to the rear. We are pleased to report that the business will continue to trade as pub and restaurant under the new ownership.”

Starbucks opens first “Evenings” outlet in an airport: Starbucks has opened its first “Evenings” venue, serving alcohol, in an airport location. The site, at Dulles International airport in Washington DC, serves wine and beer from midday. Various small plates (truffle mac and cheese, warmed rosemary and brown sugar cashews), salads (baby arugula with fresh basil and pickled beets) sandwiches (fire grilled chicken and goat cheese), flat breads (roasted artichoke, zucchini, tomato and Parmesan) and desserts (chocolate fondue with strawberries, marshmallows and cookies) are also a part of the Evenings offer. Evenings is being trialed in the Seattle and Chicago areas. 

Sushinho to open second site in London: Brazilian-Japanese restaurant concept Sushinho is to open its second site in London next year. The first Sushinho opened in Chelsea four years ago, focused on the cuisine enjoyed by Brazil’s Japanese community in the streets of Rio and São Paulo – the city is home to the largest Japanese population outside of Japan. The new site will be located in Devonshire Square in the City of London, close to Liverpool Street.

Restaurant Group lines up Frankie and Benny’s for Barrow: The Restaurant Group is planning to open a Frankie & Benny’s in Barrow in the second quarter of 2013. Fabien Dore, recruitment manager for The Restaurant Group, said: “It is about 90 per cent certain that a new Frankie and Benny’s will be opening in Barrow. It should be in the second quarter, so around April or May next year.”

Smashburger opens first Saudi Arabian site: Highly rated US better burger concept Smashburger has opened its first Saudi Arabian location in the city of Riyadh. At 7,700 square feet, it is, by some distance, the largest location Smashburger has opened globally. It is the first of 20 locations planned for the area by franchise partner Al Taqa Alia, who is hoping to open two more locations in 2013, including an airport site. “There is a strong appetite for premium American brands in the Middle East. Smashburger is at the top of the list,” said Kamel Ismail, a spokesman for the franchise partner. Smashburger chief executive David Prokupek said: “We’ve seen the excitement and energy for Smashburger here when we opened our first restaurant in Kuwait earlier this year. Now Kuwait will end the year with three units open. We expect to see the same growth and strength for our brand in Saudi Arabia.” Saudi Arabia is Smashburger’s fourth international territory. 

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