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Morning Briefing for pub, restaurant and food wervice operators

Wed 5th Jun 2013 - Chipotle, Giraffe and Punch

Story of the day:

Punch Taverns to open second Champs sports bar in August; two more openings lined up: Punch Taverns and Sheffield multi-site operator Danny Grayson will open a second Champs sport bar in August. The pair will co-invest around £500,000 in converting the Yew Tree in Hillsborough to Champs. Punch and Grayson re-opened The Ecclesall on Ecclesall Road pub as Champs on 4 August last year. Grayson said: “Punch has been absolutely unbelievable – fantastic to work with. The company has treated me like royalty. I know your hear horror stories but working with Punch has been a real partnership.” The first Champs site, a modern re-invention of the sports bar with 31 plasma screens showing sports and offering an American themed menu, is currently 194% up in like-for-like sales terms on the previous year – weekly takings average £25,000. The next opening takes place in a pub with a larger trading footprint close to the Sheffield Wednesday ground. Grayson said: “It has a massive car park and this second Champs has two levels.” Grayson has the rights to open the Champs brand within a 50 mile radius of Sheffield – he is already looking at opening in Nottingham, Manchester and Leeds, which fall within the catchment area. Grayson also operates Punch’s White Lion in Sheffield and will add a fourth Punch site in August when he takes on the Sportsman, which will be subject to a £200,000 co-investment to turn into a smaller version of Champs. “There is a lack of sport this summer compared to last summer so we’ve focused on a Pimm’s offer linked to Wimbledon and The Ashes,” reported Grayson. Meanwhile, Punch Taverns has plans at an advanced stage to open a Champs in the north east and one in Greater London. Champs was developed by Punch after doing an innovative deal to buy the name of the popular Champs sports bar in Sheffield’s Ecclesall Road from Thornbridge Brewery. The original Champs was turned into a real ale bar and restaurant by its new owner BrewKitchen, a joint venture between Richard Smith restaurants and Thornbridge Brewery.

Industry news:

Luke Johnson – we’re set for a mini-boom in merger and acquisition activity: Sector investor Luke Johnson has forecast a mini-boom in merger and acquisition activity as deferred deals reach the market. In his Financial Times column, he wrote: “Merger and acquisition activity has been subdued for a long time. Many probably believe these low volumes are the new normal. But there are thousands of transactions that have been deferred over the past five years as disposals and retirements were put off until profits and prices revived. Those elements are steadily being restored, so I predict an M&A mini-boom in the next couple of years. What is my particular justification for this bullish view? I am busier with prospective deals than I have been for some years. It seems that buyers and sellers are feeling the moment has come to act. Of course, many acquisitions will collapse. But quite a few will surely proceed. The general rise in confidence tells me better times lie ahead for business.”

CAMRA – 60% of pub tenants earn less than £10,000: The Campaign for Real Ale (CAMRA) has claimed that 60% of pub tenants earn less than £10,000 per annum in evidence submitted to the government’s consultation of statutory regulation of tenanted pub companies.

New Cambridge local pub set to get the green light: Construction of the first new ‘local’ pub in Cambridge in many years is set to be given the go-ahead today. The city council’s planning committee is recommended to approve an application to demolish the existing Queen Edith pub in Wulfstan Way, which closed in December 2011, and to replace it with a development including a Georgian-style pub. There would be three apartments on the upper floor of the pub, plus 12 two-bedroom flats in a three-storey block to the rear of the site.

New York’s largest hotel abolishes room service: New York’s largest hotel, the Hilton Midtown, will be discontinuing room service from August. Crain’s reports that guests will instead have to head down to the lobby where a self-service cafeteria called Herb n’ Kitchen opened this month. A spokesperson for the 50-year-old venue, which charges an average of more than $200 a night, said the move reflects the changing ‘needs, wants and lifestyle’ of customers. In 2012, room service represented just 1.2% of total hotel revenue, down from 1.3% the previous year, according a survey conducted by PKF Hospitality Research.

Health Minister concerned by Wetherspoon motorway opening: Opening pubs at motorway service areas would be of “concern”, a health minister warned yesterday. Dr Dan Poulter, a hospital doctor who is now an MP, was surprised to learn of the proposal by pub chain JD Wetherspoon. “It’s quite an extraordinary story,” he told Sky News. “We know that even minimum alcohol in the bloodstream can affect people’s reaction to drive. So that’s something that I would certainly, as a doctor, have some concerns over.”

Chipotle to expand is second brand – Asian version of lead brand: Chipotle Mexican Grill has signed four leases in the Washington, DC and Los Angeles markets for its new ShopHouse south east Asian Kitchen concept, bringing the planned locations to eight by mid 2014. The Denver-based chain opened the first of its fast-casual Asian restaurants in Washington in 2011 on Dupont Circle and plans to open a second there in a few weeks in nearby Georgetown. Two more units are under construction in the Los Angeles area, in Santa Monica and Hollywood. Chipotle said it is planning to add another four of the ShopHouse restaurants to both markets. Chipotle founder Steve Ells said the response to the ShopHouse concept has been similar to that of Chipotle in its early days. “People love the food and the experience, and appreciate that we are giving them something that is unique and flavourful, and doing it in a way that is accessible and affordable,” he said. The primary focus remains the eponymous Chipotle brand, which has 1,450 locations in the North America and Europe. The company expects to open between 165 and 180 Chipotle restaurants this year.

Company news:

Tesco approaches ex-Mitchells & Butlers chief executive to chair Giraffe: Tesco has made an approach to Adam Fowle, the former Mitchells & Butlers chief executive and chairman of Bramwell Pub Company, to chair its family restaurant chain Giraffe, acquired for £48.6m earlier this year, according to The Times. Fowle spent part of his career as a retail director at J Sainsbury before returning to M&B.

All Star Lanes tipped for Initial Public Offering: The boutique bowling business All Star Lanes, which was founded by Mark Westenholtz and operates five sites, has been tipped to seek an Initial Public Offering (IPO) by The Daily Telegraph. The company, which opened its first site outside London earlier this year, in Manchester, will seek an IPO when it reaches ten sites, the newspaper claimed. Existing company backers include fund manager John Duffield, who owns 20%, and eco-entrepreneur Ben Goldsmith, who holds a 5% stake.

Smashburger debuts first TV advert: Smashburger, the better burger concept looking to expand into the UK, is to launch its first TV adverts in the US. The first television campaign showcases what differentiates Smashburger from other burger restaurants – its unique smashing technique that sears each burger to create a juicy Smashburger full of flavour. The advert emphasises the visual appeal and taste of the product through a narrative that dramatises Smashburger’s signature tagline – “Smashed Fresh. Served Delicious.”

McDonald’s advert highlights ‘things in common’: McDonald’s latest advert aims to show the similarities between an old man and a group of young people living in a London estate as part of its ongoing “We all have McDonald’s in common” campaign.

Beefeater aims to fill post-5pm slot with free Father’s Day steak: Whitbread’s Beefeater brand is looking to fill the post-5pm day-part on Father’s Day, Sunday 16 June, by offering a free 6oz steak – when another adult meal is ordered. A 10oz rump is £2.00, an 8oz sirloin is £2.25, a 10oz ribeye is £2.75 and a 8oz fillet is £5.00 when another adult meal is ordered.

Kenny Atkinson reveals new details of new opening: Former Michelin-starred chef and Great British Menu winner Kenny Atkinson has disclosed details of his new restaurant which will open in Newcastle later this year. Atkinson, who left the five-star Rockliffe Hall in County Durham in April, has bought the leasehold interest in a listed, former merchant house. Located on the city’s Quayside, it occupies the first two floors and will have circa 70-80 covers and offer a more relaxed dining experience than Atkinson’s Rockliffe Hall restaurant The Orangery. Its name will be revealed later.

Greene King launches campaign to replace St George with St Edmund as patron saint: Greene King has launched a campaign to usurp St George and reinstate St Edmund as patron saint of England. Greene King hopes an e-petition could even find its way to Parliament while sparking “fun and light-hearted banter” over the patron saint claim across the country. Rooney Anand, chief executive officer of Greene King, said: “This is not an attack on St George or those that support him. It is a fun, yet serious attempt to reinstate England’s former patron saint and encourage the nation to celebrate on 20 November, instead of on 23 April.”

Buffet restaurant chain Cosmo to open in Edinburgh: Pan-Asian restaurant brand Cosmo is to open its first all-you-can-eat outlet in Edinburgh in the space of former nightclub Mood at the Omni Centre. The company has been granted a 15-year lease in the premises for their second restaurant in Scotland and will invest £1.5m. Cosmo’s acquisition advisor John Menzies said: “We had been looking at opportunities in Edinburgh for some time, and the size and location of the new restaurant makes it the ideal choice for Cosmo. The focus is now on sourcing further new restaurant openings in the other principal Scottish cities this year.” The restaurant will serve cuisine from nine countries with dishes from China, Japan, Korea, Malaysia, Thailand, Mongolia, Singapore, Vietnam and India featuring on the menu. There will be a range of 120 dishes served at the 300-seater restaurant with live cooking stations. It will open on Wednesday 3 July. Cosmo currently has 16 sites around the UK.

Vapiano UK reports £373,633 pre-tax profit after operating loss the year before: Vapiano UK, which is led by Phil Sermon and has two sites operational with a third in the pipeline, has reported pre-tax profit of £373,509 in the year to 31 December 2012 on turnover of £6,584,200. The company made an operating loss of £298,074 in 2011 before on turnover of £5,199,076. However, it reported a profit of £7,498,004 in 2011 after intercompany debt of a similar amount was waived. Vapiano opened its Great Portland Street site in June 2008 as a strong flagship location to gain awareness of the brand. A second site was opened at Bankside in February 2011. A total of £606,684 is owed to Vapiano Franchising International in respect of franchising fees. Vapiano’s third site, in Soho, is expected to open in December this year.

JD Wetherspoon scraps Bloxwich pub plan: JD Wetherspoon has scrapped a plan to open at a closed pub in Bloxwich, Walsall, Staffordshire (population: 40,000). The company had planned to take over The Bulls Head, in Park Street. Planning permission had been granted in March last year to extend and refurbish the 80-year-old pub. Eddie Gershon, spokesman for Wetherspoon, said: “This was a site Wetherspoon was considering but is not now proceeding with it. But it is still looking at the town.” The pub which closed in 2007, was badly damaged in a suspected arson attack in 2011.

TLC Inns reports like-for-like sales up 40% over last week in May: TLC Inns, the six-strong operator led by Steve Haslam and Jo Drain, has reported sales across its six sites were 40% on the year before in the last week of May to hit £165,000. Haslam said: “It was solid weather across the week and we got lucky with the Bank Holiday – and the weather was very warm on Bank Holiday Monday. More broadly, we were well ahead in May on the year before with high double digit sales increases in a number of our sites.” 

Administrator of Heritage Inns generates £165,000 in receipts: The administrator of Heritage Inns, the company that was led by industry veteran Andrew Marler, who sold JD Wetherspoon founder Tim Martin his first site in Muswell Hill, has raised £150,000 by disposing of the lease of The Old Manor in Potters Bar. A further £15,000 was raised from the return of the sub-lease at Baroque at St Alban to JD Wetherspoon – the site has been subsequently let to Bill’s Restaurants. HSBC was owed £141,000 and unsecured creditors are owed £442,504.

Spirit pub installs ticket machine in car park: A Spirit Pub Company pub on the outskirts of Northampton has installed ticket machines in its car park. The Trumpet in Wellingborough Road, Weston Favell, is close to a number of shops and a primary school. A spokesman for the Spirit Pub Company said the decision has been made to install ticket machines because people were using the car park who were not customers of the Trumpet. He said: “We decided to implement a pay and display parking scheme at the Trumpet to act as a deterrent against those who were not guests of the pub but were taking up parking spaces for long periods of time.” Tickets to park in the pub car park cost £1 for three hours or £5 for all day.

Simon French – managed companies’ strategy differs: Panmure Gordon leisure analyst Simon French has argued that managed pub companies strategies differ markedly. He said: “Managed pub companies continue to report divergent sales trends reflecting their differing strategies: Spirit Pub Company is focussed on growing margins; Mitchells & Butlers on protecting them, whilst at Wetherspoon margin continues to be a product of their volume and value approach rather than any strategic goal. London and the south east continues to outperform the regions, although we think the latter market is stable. Food cost inflation (as measured by PPI) continues to rise sharply reflecting the last year’s wettest summer for 100 years and this year’s coldest Spring for 50 years. This has been compounded by last summer’s drought in the US. Menu price inflation has continued to moderate meaning that theoretical gross margins continue to reduce. Companies have become increasingly adept at offsetting these pressures with management teams employing a variety of techniques including long-term, fixed-price contracts, hedging and menu management.”

Boardman leaves Thwaites to join Moorhouse’s: Mark Boardman has left his post as national trade manager at Thwaites to become national accounts controller at Moorhouse’s. Boardman, who has almost 30 years’ experience in the brewing and drinks industry, will look to expand Moorhouse’s export business. He said: “I had a great job at Thwaites and enjoyed a huge amount of growth. I saw an opportunity at Moorhouse’s because, if you go back five or six years, it is like where we were at Thwaites. There is a new brewery and it is a great opportunity to help grow and shape Moorhouse’s national business. I want to take a successful brewery out of its heartland and into new markets.” Boardman joins the Moorhouse Street brewery as it revealed it had surpassed the five million-pints-a-year milestone at its two-year-old £4.2m brewing complex, which trebled former brewing capacity to more than 1,000 brewer’s barrels a week.

Hotel Du Vin executive buys Harrogate hotel for new brand: The Balmoral Hotel in Harrogate has been acquired by a team led by former Hotel Du Vin hotelier Nick Lawson. The freehold of the hotel, situated close to the International Centre on King’s Road, was bought for an undisclosed sum from HRH Group, which runs a collection of restaurants, hotels, cocktail bars and traditional pubs throughout Yorkshire. Investment in the acquisition and refurbishment of The Balmoral Hotel will be more than £1.2m. Lawson, a hotel executive with more than 12 years’ experience with Malmaison and Radisson Edwardian Hotels, aims to launch a number of “contemporary high quality townhouse hotels” under the Bonne Nuit brand. He formerly managed Harrogate’s Hotel du Vin.

Nightclub to open in Birmingham for larger ladies: A new nightclub set to open in Birmingham for larger ladies and the men who appreciate their ample curves has divided opinion. Big Girls Paradise revealed it will open its doors in September at the Loft Lounge in Hurst Street in the city. The opening has been branded ‘ridiculous’ by many who say it will spark discrimination. Nicki Morris posted on social network site: “How will people be turned away, ‘Sorry love, we have a strict bingo wing dress code’.” The club already operates regular nights in London, Manchester, Glasgow and other cities. Big Girls Paradise was founded 18 years ago by Linda Koch, a “plus sized” woman herself, who was fed up with the lack of entertainment for curvier women. “It is for big girls and the many men who admire a larger more voluptuous figure,” she said.

Upham Pub Company to refurbish former Powdertrain site: Upham Pub Company will refurbish The George Inn in Longbridge Deverill, near Warminster, the former Powdertrain pub, at the end of the year. The new owner is the sister company to the Upham Brewery, which acquired its first pub in Berkshire last month, and plans to increase the scale of its pub portfolio. David Butcher, director of Upham Ale Company, said: “Upham Pub Company is delighted to have secured this pub. It is an impressive site and location and we believe that with a focused investment it can generate further and significant returns.”

Deal nears completion on Newcastle boutique hotel: Administrators of the boutique Grey Street Hotel are nearing completion after a marketing exercise attracted seven bidders. Offers in the region of £3.75m were being sought for the freehold of the boutique Newcastle hotel, which includes rental income from the Living Room site located within the building. Grey Street Hotel has 49 bedrooms. Paul James Bates and Francis Graham Newton, partners at accountancy firm BDO, were appointed joint administrators of owner and operator Grey Street Hotel Ltd on 25 October 2012. Sales dropped from £1.4m in 2010 to £1.2m in 2011 – linked to a drop in room rates resulting from increased competition in Newcastle city centre. A deal with an unnamed buyer is now close to completion.

McDonald’s helps 3,000 Games Makers earn a formal qualification: Thousands of London 2012 Games Makers have received recognition of their hospitality and skills with a formal qualification created by McDonald’s. Almost 3,000 Games Makers, three times more than expected, have completed the level two City & Guilds award in the principles of customer service as a result of their involvement in the London 2012 Olympic and Paralympic Games. McDonald’s created and funded the qualification to help prepare and recognise the volunteers with quality training before, during and after the Games. “Last summer, the Games Makers showed Britain how the combination of high-quality training, a strong work ethic and a desire to do the best job possible can lift British hospitality to a world-class standard,” said Lord Coe, chairman of the British Olympic Association.

Coca-Cola campaign changes brand perception: Coca-Cola’s biggest ever UK summer campaign, which has seen the drinks company replace its branding with 150 of the country’s most popular names across 100 million packs, has moved consumer perception of the brand towards the positive end of the scale. YouGov BrandIndex’s measure of the positive and negative things said about the brand in the media or through word of mouth - has jumped from -5 to 1.9, a shift categorised as “statistically significant” by the research company.

Travelodge targets booming Hampshire for ten new openings: Travelodge is targeting booming Hampshire with a plan to add ten sites. Lymington, Winchester, Fareham and Portchester are among the places it is eyeing. The chain, which already employs 200 at its 15 hotels in the county, claims this would boost the local economy annually by £11 million. Tony O’Brien, Travelodge’s UK development director, said: “Hampshire is one of our top performing counties within the UK, with demand growing at great pace for good quality branded budget hotel rooms from business and leisure travellers. In response to this growing need, we have extended our target list for the region.”

Marco Pierre White restaurant in Dubai closes: Chef Marco Pierre White and Meliá Dubai have closed the restaurant Titanic by Marco Pierre White in Dubai. The move to shut down the eatery at Bur Dubai’s Meliá Hotel follows an agreement between the two parties to end their partnership, which began last year. “Since I launched Titanic with Meliá Dubai, the hotel has evolved and it became necessary to adapt,” said White in a statement. The chef said it was a “strategic decision on both sides and we part amicably”.

Punch Taverns becomes the first pub company to get code of practice accredited: Punch Taverns have become the first pub company to have their Code of Practice accredited by BIIBAS following the release of version six of the industry framework code in March of this year. The Code of Practice, which now needs to be reviewed and accredited every three years, covers everything from starting up and the day-to-day running of a pub business, to seeking advice and what to do at the end of an agreement. David Pawson, central operations manager, said: “The code continues to be a really important reference point for our Partners and provides a robust framework for the commercial relationship between us. We encourage our Partners to familiarise themselves with the Code of Practice at every step of their journey with us. We are delighted to be the first pub company to achieve accreditation having undertaken a stringent process with BIIBAS to ensure our code is fully compliant with version six of the industry framework code. I believe that this reflects our continued commitment to working with our Partners in a fair, open and transparent manner.” Every Punch partner will have access to the Code of Practice online and hard copies will be provided to all new Partners and any existing Partner who requests one. BII Chairman Bernard Brindley said: “We are pleased to accredit Punch Taverns’ Code of Practice in line with the Industry Framework Code version six and are also pleased to see that they have gone over and above the IFC providing further clarity to the way they will do business with their partners.”

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