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Morning Briefing for pub, restaurant and food wervice operators

Wed 2nd Jan 2013 - Arkell’s, Bill’s Restaurants, December trading

Story of the day:

Two companies report December trading figures; Christmas Day provides growth: Two food-led companies have provided the first reports on the all-important December trading period. Oakman Inns and Restaurants, led by Peter Borg-Neal, has reported that “trading exceeded expectation throughout the month with the exception of the final weekend when there was, understandably, a bit of a pre-New Year’s Eve lull”. Borg-Neal told Morning Briefing: “Overall, for the 31 days of the December calendar month we achieved comparable like-for-like growth of 7.7 per cent. The average sales per Oakman Inn over the period was in excess of £41,000 net per week. Following the very strong comparables growth we achieved last year, we are delighted with this performance. Our sense of things is that the growth came mainly through advance bookings. There appeared to be an increase in businesses treating their staff to Christmas parties with the kind of generosity we haven’t seen since pre-credit crunch days. However, the biggest daily year-on-year growth came on Christmas Day when all our Oakman Inns were fully booked. The British Larder did even better achieving year-on-year growth of 12 per cent boosted by sales of The British Larder: A Cookbook for all Seasons, which was recently named as best UK cookbook by a female chef for 2012.” Meanwhile, six-strong TLC Inns, led by Steve Haslam and Jo Drain, reported that its four larger sites netted over £100,000 for the month, with its White Horse in Ramsden Heath venue growing sales by 24 per cent after the installation of a synthetic ice rink. Haslam reported lunch trade had been subdued at weekends but a strong Christmas Day had grossed £50,000 across the six pubs. He added: “Overall, we are pleased with result but believe there is still a tightening of spending in certain areas especially company spend. We have given out 15,000 bounce backs for January so we’re hoping for strong sales to boost the period. An early spring is needed after such a wet summer overall – we are just short of budget going into Quarter Four but confident of our chances of pulling back. The introduction of a skating rink was a big hit and we are currently exploring new innovations for spring and summer to further enhance trade.” On the prospects for 2013, Borg-Neal added that he is “cautiously optimistic”. “In particular, the lack of major sporting events will prove extremely positive for food-led businesses without televisions. Our key objective for the year will be to further develop our offer with a particular emphasis on all-day trading. We are also committed to investing heavily in our people and, thereby, driving quality – we will leave discounting to others.” How was December trading in your business? E-mail

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 to book places.

Propel Quarterly magazine available online: The winter 2012 edition of Propel Quarterly magazine is now available to view online at

Industry news:

Record numbers used Wi-Fi in pubs and restaurants over Christmas: The UK’s biggest high street Wi-Fi provider The Cloud has reported a three-fold increase in usage over Christmas Eve, Christmas Day and Boxing Day at its network of hotspots in pubs, cafes and restaurants compared to last year. In total, consumers spent more than 60 million minutes connected to Wi-Fi this Christmas. The increasing trend is consistent over the past few years, with the amount of information downloaded across the three days up by a factor of ten since 2009. Christmas Eve was the busiest day over the Christmas period for Wi-Fi with peak traffic on Christmas Eve around a fifth higher than an average weekday and four times higher than the same day last year. It reached its peak in pubs at midnight, when people updated their social media accounts as Christmas Day arrived. And on Boxing Day pubs up and down the country experienced another big spike in Wi-Fi hotspot use compared to last year - twice as high as last year - as people continued their seasonal celebrations while watching some of the big Boxing Day football matches, said researchers. Vince Russell, managing director at The Cloud, said: “We used to think Christmas would be a relatively quiet time on our network, but that isn’t the case any more. Even on Christmas Day, our pub hotspots are heavily used.” An estimated five million people every day pass through The Cloud network by visiting one of its partners, including major outlets like JD Wetherspoon, PizzaExpress, Caffè Nero, Eat, Greggs, Pret A Manger and Wagamama. The Cloud’s users connect to its hotspots for over 100 million minutes each week, the company reports.

Landlord receives British Empire Medal: Pub landlord Lino Pires, 79, who owns The Butcher’s Arms in Priors Hardwick, Warwickshire, has also been awarded a British Empire Medal in the Queen’s New Year’s Honours list. He has been recognised for services to charity, having twice paid for major restoration projects at St Mary’s Church in his village as well as making significant contribution towards the setting up and running of the privately funded local village primary school in neighbouring Priors Marston. In addition he has over the years, raised more than £350,000 for national charities such as the NSPCC, Motor Neurone Disease Association and most notably, for a leading cancer research programme at the Royal Marsden Hospital. He has worked tirelessly for more than 38 years to transform what was a run-down village inn, in a relatively remote corner of Warwickshire, into a landmark country pub restaurant. Elsewhere, Anna Lise Hansen, chef proprietor of the Modern Pantry, received an MBE for services to the restaurant industry while Ruth Evans, chief executive of the Brewing, Food and Beverage Industry Suppliers Association was awarded a MBE for services to exports. Dick Turpin, vice-chairman of Hospitality Action and chairperson of the Ark Foundation, received a MBE for charitable services to the hospitality industry. In a varied career, Turpin served as managing director for the Berni Inn Group, where he oversaw 285 steakhouses and 21 million meals served annually.

Council lists 20 pubs in Lewisham: Twenty pubs in Lewisham borough have been listed by the local authority. Mayor of Lewisham Sir Steve Bullock has approved the measure, which recognises their architectural or historical interest, though does not offer legal protection against demolition. New additions now include Albertines in Lewisham Way, Sydenham’s Kirkdale, The Brockley Jack and Brockley Barge, along with Blackheath’s Hare and Billet.

One in five Irish country pubs at risk of closure: One in five of the country pubs in southern Ireland is at risk of closing its doors after one of the worst years for the industry on record. A total of 800 businesses and 4,800 jobs are claimed to be at risk after an estimated 34 per cent drop in sales over the last five years. Vintners Federation of Ireland chief Gerry Rafter said: “The future is bleak and the majority of our membership is very downbeat to put it mildly. The year just gone saw our government put further pressure on an industry already on its knees with a massive increase in excise. It saw some major suppliers increasing prices in an untimely and unwelcome manner and we saw no leadership from local government with regard to local charges and rates.”

Middle-aged women out-drinking their daughters: Middle-aged professional women are consuming more alcohol than teenage drinkers for the first time, according to the Office of National Statistics annual General Lifestyle Survey. The latest survey shows that those over 45 drink more than any other age group. Women aged 16 to 24 consume just 8.4 units of alcohol a week – about 20 per cent less than they did several years ago. Men are consuming roughly twice the amount of alcohol as women. 

AA Gill – more restaurants will offer obvious value in 2013: Sunday Times food critic AA Gill has forecast that the coming year will see more restaurants offering “obvious value, perhaps less absurd extravagance”. He also forecast “more expensive Mexican food, more single-dish dinners, more exposed subway tiles and brick”. Gill said his one wish would be for “a seasoning of sophistication, not pretension, not etiquette, but elegance, panache, wit and culinary finesse”.

Visitors numbers dropped by four per cent after the Olympics: Office of National Statistics data shows a four per cent drop in overseas visitors in the wake of the Olympics – in line with the four per cent drop seen in the three months to 30 September. As a result, the UK’s tourism deficit widened to £5.7bn from July to September, up from £5.3bn in the same period in 2011. Meanwhile UK-bound tourists’ spending declined by 11 per cent year-on-year in October. Tourism leaders link the decline to factors including high-priced accommodation and a complex visa process for non-EU visitors. “From a tourism perspective there is a danger that we won’t really see a legacy at all from the Olympics,” Ufi Ibrahim, chief executive of the British Hospitality Association (BHA), told The Financial Times.

Company news:

Wetherspoon to open 30 pubs in 2013; runs January sale for the whole month: Managed operator Wetherspoon is to open 30 pubs and create 1,200 jobs in 2013. The company is to invest more than £35 million developing the pubs across the UK, including new outlets in Cardiff, Fort William, Selby, Whitby, New Brighton and Fraserburgh. At present, Wetherspoon has 866 pubs and bars in the UK. Wetherspoon chairman Tim Martin said: “We are looking forward to opening the new pubs, many of which will be in areas where Wetherspoon is not yet represented. We are also pleased to be creating so many new jobs, especially during a recession. There is no question that we would open more pubs and create more jobs in 2013 if the increasing tax burden on pubs was reduced.” Meanwhile, the company will extend its traditional January sale to run the entire month, from 2 January until 31 January. Among the sale items are Gordon’s and slim-line tonic for £1.99, a bottle of Beck’s for £1.49, bottles of Erdinger and Staropramen for £2.69 and Birra Moretti for £2.99. Guest ales are priced at £1.99 a pint. On the food side, sweet chilli egg noodles, Wiltshire cured ham and eggs, jacket potatoes with a choice of fillings and soup with a malted grain bloomer are all priced at £2.99.

Andy Murray buys Dunblane hotel: Tennis star Andy Murray is reported to bought a hotel near his home town of Dunblane off an asking price of £2m. He was one of three bidders for the 14-bedroom Cromlix House Hotel, on the market trough Savills, which was the venue for the wedding of his brother Jamie and his Colombian girlfriend Alejandra Gutierrez in 2010. The four-star hotel, which has been closed since February 2012, occupies 36 acres of landscaped grounds within a 2,000-acre estate and includes four fishing lochs and two mineral springs.

JW Lees reports 40 per cent increase in pre-tax profits: North west brewer and retailer JW Lees has reported a 40 per cent per cent jump in its pre-tax profits to hit £4.9m in the year ending 31 March 2012. Turnover was up £2.9 million (5.3 per cent) at £56.3 million. During the year, JW Lees disposed of its Lakeland Vintners business to House of Townend as well as purchasing one pub restaurant, The Turnpike in Rishworth. Since the start of this financial year, the company has purchased two pub restaurants from the Deckers Group and another two pubs from Spirit , as well as disposing of six small tenanted pubs and its pub restaurant La Perdrix Noir in Flaine in France. JW Lees has also just commissioned a new kegging line in its brewery, which was officially opened by Jim Dobbin MP before the Christmas break on Friday 21 December. Managing director William Lees-Jones said: “It has been a rollercoaster of a year and it feels like we have finally got back to where we were going before the ban on smoking in public places came in five years ago. Managed houses have been driving sales and food is now responsible for 43 per cent of sales in managed pubs. All of the ten pubs that we purchased from Punch in 2009 have now been refurbished and we are keen to buy more pubs at sensible prices – we have recently agreed new funding to do so with RBS. Our joint venture with Marco Pierre White to brew and market ‘The Governor’ is going well and we are enjoying wider distribution for our beers both in the UK and USA. We are recruiting a new director of operations to run the tenanted estate and have been impressed with the calibre of applicants and will be making an appointment early in the New Year. We have strong positive momentum in our business despite the government’s misjudged beer duty escalator and high VAT charges, which disadvantage pubs in particular. To this end we have subscribed funds to Jacques Borel’s VAT Club to see if the government will listen to sense and do something to kick-start the hospitality sector with the new jobs than a cut in VAT would bring.”

Ebitda at Bill’s doubles to £1,633,460: Bill’s Restaurants, owned by Richard Caring, has reported turnover rose to £9,998,529 in the year to 29 July 2012, up from £5,948,126 the year before. Ebitda before pre-opening costs rose 107 per cent to £1,633,460 with gross profit margin climbing to 74.1 per cent compared to 71.4 per cent in the period before. Pre-tax profit was £932,319 compared to £410,215 the year before. Figures reflect a year in which five sites traded for the entire period and four more – Islington, Soho, Wimbledon and Exeter – traded for part of the year. Since the year end, a further five sites have opened. The company stated: “Like-for-like sales were positive during the year despite the overall state of the economy. Some key risks the company faces include competition for new sites, particularly in London and the Home Counties, but the directors believe that the unique offering Bills has compared to these competitors will continue to set it apart.” Bill’s Restaurants changed its name from Bill’s Produce Store in July last year.

Arkell’s reports profits up as it switches to accommodation and food; places five pubs on the market: Swindon brewer and retailer Arkell’s has reported pre-tax profits pre-tax profit rose to £1,803,000 in the year to 31 March 2012, compared to £1,785,000 the year before. Turnover was £18,737,00 compared to £18,150,000 the year before. Chairman James Arkell said: “Over the past few years we have been investing more in rooms and the provision of food to increase profitability. To further this aim, we purchased The Kings Arms in Malmesbury and the Fox and Hound in Haydon Wick. Trying to curb expenditure on our pub estate is always challenging with our high standards of maintenance. We try to continually reappraise our estate, investing wherever our return can be improved. We sold three pubs this year and we have five on the market, which we hope to sell in the current year. “ The company’s pension deficit increased from £2,287,000 to £3,418,000 – Arkell’s pays £240,000 per annum into it as part of a “deficit recovery plan”. Arkell said: “Our old final salary pension scheme continue to cause headaches as it is governed by ever more regulation which does not appear to assist the beneficiaries at all.” Overall, managed sales rose by three per cent and rental income grew by six per cent, aided by the transfer of some managed pubs to tenancies. Arkell’s is repaying its long term loan at the rate of £600,000 per annum but, overall, borrowings grew by £824,000 as a result of buying the two pubs. Since the year-end, Arkell’s has agreed a £9m loan facility with Svenska Handelsbanken and a £3m overdraft facility with Lloyds Bank. 

Spirit opened almost entire estate on Christmas Day: Spirit Pub Company opened almost its entire 750-strong managed estate for Christmas day lunch - nearly all its managed pubs were booked for two lunch sittings, and some for dinner as well. The Financial Times reported that Spirit’s all-out push for the Christmas day market is one of many initiatives taken by pub groups and landlords to woo the public in what Numis leisure analyst Douglas Jack described as a “golden age” of innovation for the sector. The Financial Timed stated: “The smoking ban of 2008 and damaging beer duty rises triggered the industry’s quest for new products to sell and new gimmicks to get customers through the saloon doors. Coffee, breakfast and craft beers are some of the older innovations but fresh ideas keep coming. Bookings on Twitter, mystery visitors, takeaway food, delicatessens, X Factor competitions, an outdoor ice rink, patisseries and “speed-plating” (chat-up opportunities across a multi-course dinner) are now part of the UK pub industry’s repertoire.”

Marston’s to introduce free Wi-Fi at managed pubs: Midlands-based Marston’s is to introduce free Wi-Fi across its 550-strong managed estate – it has chosen Ruckus Wireless to provide access to the internet for customers. “Access to Wi-Fi is becoming more and more important for our customers,” said operations manager Rob Derbyshire. “A key part of our strategy is to create an environment that is comfortable for families to visit and there is a huge opportunity in providing the same wireless connectivity as they have at home.” Meanwhile, its plan to open between 20 and 25 new-build pubs in 2013 is expected to crate as many as 1,000 jobs.

SFI shareholders get Christmas pay-out: Shareholders in SFI Group, the company that collapsed into administration in 2004, received a long-awaited pay-out just before Christmas. One shareholder dryly told Morning Briefing: “I got a cheque during Christmas for £6.54 - not a bad return on my £2,000 investment!”

Draft House declares ten days of Hamburger Monday: Draft House, the London operator headed by Charlie McVeigh, has declared the first ten days of January “Hamburger Monday”. The company’s usual “Hamburger Monday” offer of a hamburger special with hand-cut fries and a pint for £10.75 is on offer every day until 10 January.

M&B introduces centralised data management: Mitchell & Butlers (M&B) has centralised all of its data, which was being stored in a legacy system and across hundreds of spreadsheets, into one master data management (MDM) tool. The data from 1,600 pubs and restaurants, which includes 1,300 live recipes, more than 80,000 items, 250 suppliers and 3,500 stock items, was fragmented and stored in silos. “We had a central database for all of our product information, but that was supplemented by a large number of spreadsheets. There was an awful lot of cross referencing of that data to ensure we had data quality in all of the applications across the supply chain,” said Alison Vasey, head of business change at M&B.

RMAL Hospitality to open more Marco Pierre White branded restaurants: RMAL Hospitality has revealed it plans to open up a new Marco Pierre Steakhouse & Grill at the upcoming Conrad Dubai hotel. Chief executive Anthony Liddiard said there are plans in the pipeline to further develop the Marco Pierre White brands across the region. “We’ve worked with him for six years and he is extremely happy with what we do with the brand. We are the custodians of his brand in this part of the world and where we develop in other parts of the world.”

Crown Carveries launches New Year offer: Mitchells & Butler budget carvery brand Crown Carveries, which as 115 sites, is offering its small plate carvery for £2.99 when customers order a drink. The offer runs between Monday and Saturday up until 16 February.

Beefeater Grill offers 50 per cent off food bill: Whitbread’s Beefeater Grill brand is offering 50 per cent off all food between Monday and Friday until 18 January. The offer includes all main menu items, starters, sides and desserts. 

Harvester offers 20 per cent off for bills of £25 or more: Harvester, the 206-strong Mitchells & Butlers brand, is offering 20 per cent off of all food and drink for orders of £25 or more. The offer is valid until Monday 11 February.

Brewdog reveals target list of cities: Scottish brewer and retailer Brewdog has unveiled a list of target cities for 2013 that includes Liverpool, Sheffield, Brighton, Cambridge, Oxford and Cardiff as well as south and west London, The company is offering £1,000, plus a “lifetime discount at the new bar”, to anyone who finds a site. Brewdog said the criteria included sites currently on the market with a valid licence and a capacity of 80-130. It prefers corner units and is happy to consider freeholds or leaseholds - a 20 January deadline for submissions has been set. The company will open its eleventh site in Leeds early this year.

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