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Morning Briefing for pub, restaurant and food wervice operators

Wed 19th Jun 2013 - Cote, Mitchells & Butlers and Peach

Story of The day:

Peach Pub Company sells Leicester city site after deciding it’s unsuited to gastro offer: Peach Pub Company closed its Almanack site in Leicester city centre’s Highcross retail development yesterday after concluding that the city is not suited to a gastro-pub offer. The business opened in November 2009 and was its eleventh site but it has now been sold to Caribbean restaurant chain Turtle Bay – the first time the company has sold a site in its ten-year history. The Leicester Almanack is the company’s only city centre site. A spokesman for Peach told Propel: “Peach has thought for a while that Leicester wasn’t the right site for a Peach gastro-pub offer and after three years, Turtle Bay made the company an offer and agreed to take it on. Peach never lost money day-to-day on the pub, but was unable to make the site, in the Highcross retail development in Leicester city centre, work. Peach continues to focus on gastro-pubs where it can deliver its successful formula of good honest and ethically sourced food, great hosting and service, and is on track to deliver its steady growth plan of three new pubs a year, as long as it can find the right sites. Peach has just opened the doors of The Chequers in Eversley Cross in Hampshire following the refurbishment of the pub, and has another new opening coming up in Edgbaston next year, as part of that solid development plan.” Peach is also understood to be close to securing another new site in Bedfordshire. Meanwhile, The Restaurant Group’s Coast to Coast brand is set to open in a unit at Highcross previously occupied by a designer clothes shop Cruise. Mexican restaurant Chilacas has also moved into the unit occupied by a brand called Urban Pie.

Industry news:

Luke Johnson – Titans can always be cut down to size: Sector investor Luke Johnson has argued that large companies dominating any market can always be out-flanked by innovative newcomers. In his Financial Times column this morning, he writes: “When partners and I took control of PizzaExpress it had just 12 company-owned restaurants. It was a distant fourth behind Pizza Hut, Pizzaland and Deep Pan Pizza. But our offering was superior, and the public knew it. Within ten years, two of the three market leaders had shut down and the other has been in retreat for years. PizzaExpress, meanwhile, has grown 20-fold, and is now the leader. The majors were complacent and unwilling to reinvent their model – and suffered the consequences.”

Global fish pries hit all-time high: Fish prices have hit an all-time high around the world as China’s growing demand for fish puts pressure on lower catches. The UN Food and Agriculture Organisation’s (FAO) global fish price index, an industry benchmark that tracks the cost of wild and farmed seafood, hit a record high in May, up 15% from a year ago and above the peak set in mid 2011. “In the coming months, supply constraints for several important species are likely to keep world fish prices on the rise,” the FAO has warned.

Starbucks to begun calorie listing in the US: Starbucks will follow the lead of McDonald’s and Panera Bread by voluntarily posting calorie counts on its menu boards nationwide in the US ahead of a pending federal requirement to do so. The company said it will note nutritional details on all its drink listings and in its pastry cases in every Starbucks store in the US beginning 25 June. It said the information is already available on its printed brochures and on its website and mobile app. At the chain, a Grande 16-oz. Caramel Macchiato with 2% milk has 240 calories.

Sun Capital Partners buys Johnny Rockets burger chain: The Johnny Rockets burger chain has been acquired by an affiliate of private-equity group Sun Capital Partners. Terms of the deal were not disclosed. Johnny Rockets was sold by RedZone Capital Management. Industry observers familiar with the offer said at the time that the company’s asking price was in the range of $100 million to $150 million, which was about nine to 13 times earnings before interest, taxes, depreciation and amortisation, or EBITDA, of about $12 million.

Oceania murder trial collapses over smelly juror: The murder trial arising from a fatal stabbing at Luminar’s Oceania venue in Kingston has collapsed after a female juror complained that the man sitting next to her in the court smelled. A letter to the Old Bailey judge complained she could not concentrate. The trial into the death of 20-year-old Jamie Sanderson, who was stabbed in Oceana nightclub, was two days into a six week trial when Judge Wendy Joseph discharged the jury. She said: “There is a problem. There is nothing that the poor man can do about it. I am not prepared to force him to sit in another part of the court room. Even if I were to find jurors to sit by him, it would not necessarily resolve the problem. At the end of the day they have all got to sit in the jury room together. We are two days and one hour into evidence and the prospect of many weeks ahead of us. These defendants are entitled to a trial by 12 jurors. Nobody really wants to go on with 11 jurors from a defence point of view.”

Sydenham takeaway wins title of best in the UK: The Millennium Tandoori in Sydenham, south London, has topped a league table of 11,000 restaurants in the UK. The restaurant received five-star ratings for the quality of its food, the speed of their delivery and its overall value for money in a survey by takeaway website Hungry Horse. It also had more repeat customers than any other takeaway in Britain. Customers raved about the restaurant’s £2.10 onion bhajis, £1.80 naan breads and the chicken korma, priced at £4.70, which is one of their best-selling curries along with chicken tikka masala and lamb biryani.

Pizza Hut launches flatbreads across 6,300 US restaurants: Pizza Hut in the US has launched into the flatbread category. Flatbreads, available at US units only, feature a “slightly crispy wood-fired style” crust, cheese and three toppings. The flatbreads come six to a box and can be topped three different ways for $11.99. “We’ve been watching flatbreads closely, talking to our consumers to understand the appeal,” said Carrie Walsh, vice president of national marketing for Yum Brands. “We’ve seen both awareness and excitement around this product type really growing.” More than 6,300 domestic Pizza Huts quietly began offering the flatbreads online Sunday.

Company news:

Cote to add five sites before the end of July: French brasserie chain Cote will add five new sites before the en of July. Today, the company opens in Sevenoaks, June will openings to follow in York on 29 June, Tunbridge Wells on 1 July, St Katherine Docks on 15 July and in Windsor on 31 July. Joint managing director Harald Samuelsson said: “All in all a very exciting time and we are looking forward adding these locations to our current estate.” Cote Restaurants reported turnover increased by 38.7% to £49.3m in the year to 29 July 2012. Ebitda increased £3.3m to £10m, an increase of 46.6% – with Ebitda as a percentage of turnover increasing from 19.2% to 20.3%. Pre-tax profit jumped to £6,916,508 from £3,971,680 the year before. The company has circa 40 sites open.

Pret A Manger replicates in-store experience on mobile: Sandwich chain Pret A Manger has launched a new mobile-optimised site that aims to replicate its in-store customer service experience on consumers’ smartphones. The device will use GPS functionality to determine the location of a visitor’s closest shop and details such as the manager’s name, walking directions, opening hours and contact details. A welcome screen will be customised depending on time of day, reflecting the way its in-store staff greet customers. Once in-store, visitors to the site will be invited to leave feedback for the staff or check in via Facebook. In addition, the site provides detailed nutritional information about Pret’s entire menu. Earlier this year Pret appointed former Green & Black’s marketer Mark Palmer as marketing director, taking over from Mark McCulloch who was leading marketing strategy on an interim basis. 

Tim Martin – we’ll increase vegetarian choice on the next menu: JD Wetherspoon founder Tim Martin has promised that the company will increase choice for vegetarians on its next menu after a customer complained that choice is reducing. A customer from Dorset, a Mr Ferry, told the company in the current edition of Wetherspoon News: “First of all, I would like to say that my wife and I love the new vegetarian sausages. Unfortunately, it is a good job that we do, as neither of us eats meat – and, every time the menu changes, we lose a non-meat item. Last year, it was fish cakes and now the salmon has disappeared. If we go out with our friends on a Tuesday, so that they can have steak, we are reduced to fish ‘n’ chips (delicious, but regularly sold out by 8pm) or vegetarian brunch. The pasta is okay, but not very filling without the salmon upgrade. We always enjoyed the Curry Club, but, now that the roast vegetable makhani and prawn curry have been removed, we are left with just sweet potato curry, take it or leave it. I’m not one for conspiracy theories, but am seriously beginning to wonder if someone in head office has it in for those of us who choose not to eat meat.” Martin responded: “Fair comment. We plan to increase the choice on the next menu.”

Randall and Mascarenhas to open neighbourhood trattoria: Theo Randall, who made his name as head chef at the Riverside Café and restaurateur Rebecca Mascarenhas are to partner to open a new restaurant in Putney, south London. Bibo will launch in September as a neighbourhood Italian trattoria. It will open on the site of a restaurant Mascarenhas has owned since 1995, initially operating as Phoenix before being relaunched as Cantinetta in 2010.It will be the first opening for Randall outside Theo Randall at the InterContinental London Park Lane, where he has been chef-patron since 2006 and will continue to head.

Barnsley’s Oakwell Brewery to sell all its pubs – and stop brewing: Barnsley’s Oakwell Brewery is to sell all its 30 pubs individually and end brewing to stem mounting losses. The Magpie in Carlisle is one pub on the market with an asking price of £425,000. Lynne Booth, the brewery’s managing director, said there had been some interest but none of the offers had been anywhere near the asking price. She added: “We’ve had two low offers. It’s still for sale.” The brewery spent £400,000 on a refurbishment three years ago and the work brought an award from English Heritage. Booth added: “I was involved in that – to me the pub is my baby. It’s one of our best.”

Alastair Scott – Father’s Day bigger than Mother’s Day: Alastair Scott, the former Mitchells & Butlers executive who runs two Punch Taverns pubs through his Malvern Inns company, has reported that sales on Father’s Day have now overtaken Mother’s Day. He told Propel: “In my older pub the food sales for each day were almost exactly identical. This is no surprise – we are full on both days and so we would expect this. But drinks sales were substantially higher on Father’s Day. Of course, with hindsight, this is obvious. When mums come out they don’t drink that much, and dad still has to drive so can’t get stuck in. But on Father’s Day the opposite happens. Dad can have a beer or two and maybe fall asleep in the car on the way home. So we took £600 more on drink on the same amount of food on Father’s Day. In my newer pub the figures were more surprising. We had about the same amount of customers, but starter and dessert penetration were way higher on Father’s Day. Of course they too drank more, which meant we took 30% more on Father’s Day than Mother’s Day. So, on my very robust sample of two village pubs, it’s official. Father’s Day is now bigger than Mother’s Day, and therefore the biggest day of the year.”

Carluccio’s to open 75th site next month: Carluccio’s, headed by Simon Kosoff, will open its 75th site next month in Aberdeen – it will be the company’s second site in Aberdeen. The new restaurant will create 35 new jobs in the city and follows the success of the group’s Glasgow site, which opened in November 2011. Another site will open in July on Newcastle’s Grey Street, which is in the heart of the city’s historic area known as Grainger Town. It will be housed in a Grade 2 listed building adjacent to “Greys Monument”, viewed locally as a central landmark and meeting spot. Kosoff said: “Reaching 75 outlets is a significant milestone for the business and makes me very proud. We have been looking for a site in Aberdeen for some time and are very excited to have found the right one for us and to be opening our second restaurant in Scotland.”

Liberation Group buys six pubs: Liberation Group, headed by Mark Crowther, has bought six of the Channel Islands’ best-known pubs and bars in a deal agreed with Sealyham Investments Limited/Lapwing Trading, for an undisclosed sum. The properties were originally part of the CI Traders group of businesses, but when Sandpiper CI acquired the company’s portfolio of pubs and bars in 2007, these six were not included. The Liberation Group bought the remaining pubs, brewing and drinks business of Sandpiper CI in 2008 and has continued to supply drink products to the six businesses that are part of the agreement announced today. In Guernsey the acquisition includes the Ship & Crown and Crow’s Nest Restaurant, and L’Auberge, both of which are managed sites. The Happy Landings close to Guernsey Airport and the Captain’s Hotel are the two tenanted businesses acquired. In Jersey the Ha’penny Bridge and the Seymour Inn, both tenanted, will also become part of the Liberation Group portfolio. All managers and staff will remain as part of the deal. Liberation chief executive Mark Crowther said: “The pubs have been well invested in and looked after under the stewardship of Lapwing Trading for the past seven years and we are delighted to now welcome these great sites into the Liberation Group family. We have no plans to make any changes to the day to day operation for any of the sites or their employees, other than we will look to integrate the two managed sites into our popular Inndulgence card loyalty programme.”

Mitchells & Butlers to put new retail system out to tender: Mitchells & Butlers, which is currently two-thirds of the way through a total IT infrastructure revamp, is planning to put out to tender on a new retail system that will be rolled out to all of its 1,600 outlets in the UK. Martin Taylor, director of business change and information technology at M&B, said the aim will be to better align interaction between the business and its customers. That will mean encompassing website and social media strategies, making it easier to book a table on the one hand, and to capture orders quickly and efficiently on the other. That may mean, therefore, investigating mobile technologies for taking orders at the table, as well as ways of better capturing customer data. He said: “The tender process will be about finding what is best solution for our outlets. We have great relations with our core suppliers but this is about what’s right for running our individual outlets. One of the big issues in our industry is around payment and making that process as pain-free as possible.” This will mean considering mobile payment systems, such as via digital wallets built into mobile phones, which many analysts suggest will be the “next big thing” in mobile communications, as well as the current vogue for gift cards that can be bought in supermarkets. Computing’s Graeme Burton said: “Despite partnering with computer giant Fujitsu for its outsourced data centre, private cloud and other enterprise IT services, the company intends to put the retail system out to tender. Fujitsu, though, along with IBM, will undoubtedly be one of the front runners given its position in retail systems.” 

Heineken condemns statutory regulation of pubcos as misguided: Heineken, the UK’s leading beer business that owns 1,200 pubs, has claimed moves to impose statutory regulation of the tenanted pub company is misguided. In its submission, Lawson Mountstevens, managing director on trade, said: “Despite good intentions, many of the government’s proposals to reform the pub sector are misguided and there will likely be unintended consequences for pubs across the country if fully implemented. To reverse the current decline, and to get more happy customers through the doors, we need real investment, innovation and professionalism in the pub sector. Star Pubs & Bars’ aim has always been to work in partnership with our publicans to help improve their offering to customers. We have no desire to manage a decline, and we will continue focusing on the factors that will attract more customers back to the great British pub. That’s why we’ve already invested over £600 million in purchasing and improving our pub estate since 2010, and why we will continue to invest heavily to improve our pubs, with £13m invested in 2013 alone. I believe that for the vast majority of tenanted pubs and publicans, self-regulation is working but of course it can continue to improve. Rather than putting in place proposals that will not only fail to tackle the issues facing the sector, but will also make matters worse, we are calling on the government to work with us on a more ambitious agenda for growth.”

Numis – Whitbread has made a strong start to the year: Numis Securities has issued a hold note on Whitbread’s shares, with a price target of 2900p on its shares, after the company reported yesterday that its first quarter sales were up 13.8% and group like-for-likes rose 3.1%. Numis’s Wyn Ellis said: “The company describes this as, “in line with our plan.” and reports no change to market conditions. Costa benefited from the cold weather, with total sales growth of 24.8% and like-for-likes of 8%. We believe that the cold weather may have boosted like-for-likes by as much as 200bps, with the change in half term/Easter providing a further 100bps fillip. Underlying, therefore, we estimate the LFL growth to be circa 5%, which is in line with our expectations. Restaurants were impacted by cold weather with flat like-for-likes, but report an improved performance in recent weeks.”

Burger King re-launches all British and Irish beef Aberdeen Angus burgers: Burger King has re-launched its 100% flame-grilled Aberdeen Angus Beef Collection at its sites across the UK. The Angus Collection features: Angus Classic burger, Angus Smoked Bacon & Cheddar burger and Angus Three Pepper burger. Burger King North West Europe Marketing director Guilherme Ruschel said that Burger King brand is proud to bring back 100% British and Irish beef through the return of the iconic Angus Collection to restaurants nationwide. “Our guests can continue to have every confidence in the provenance and high quality of the locally sourced and great tasting Aberdeen Angus beef burgers,” Ruschel added.

Zizzi opens fourth site in Edinburgh but first new site in the city in seven years: Italian chain Zizzi is adding a new restaurant at Roxburgh Court, Edinburgh, its fourth in the city. The new venue is set to open on Saturday, June 29 and follows sites in Queensferry Street, Ocean Terminal and Edinburgh Quay. Unlike the other Zizzi restaurants in Edinburgh, the Old Town venue will have a walled garden dining area, allowing diners to eat al fresco. The interior has taken its design cues from the neighbouring law courts and Advocate’s Library and has views across Princes Street Gardens.

Orchid pioneers new approach to training: Orchid has launched a brand new training course for ‘sales ambassadors’ designed to roll-out unforgettable service. The first session took place at Warwick University’s theatre and gave selected employees the opportunity to take to the stage for hands-on learning about up-selling and customer interaction. Created by Orchid’s training team - Lucy Craig, Josie Adams, Sam Beckwith and Hannah Lumby - the session gave staff the chance to step into their customers’ shoes and really embrace hospitality. From the moment each attendee arrived, they were treated to a true theatrical experience complete with popcorn and fizzy drinks. Customised programmes had been specially created with a ‘cast list’ showcasing each attendee along with the reason why they had been nominated to attend by their area manager or general manager.

Restaurateurs open Carlisle’s first juice bar: Carlisle’s first dedicated juice and smoothie bar will open its doors next month. Pressé Juice, which will also have an art gallery, will be run by Paul Higgins and Julie Simpson – who have the Pompeii Steakhouse on Annetwell Street. Simpson said: “We have spotted a gap in the market and decided to go for it. We will be making proper fresh smoothies and juices where the fruit is juiced in front of you. We’ve got some fantastic recipes and we just can’t wait to try them out.” Pressé Juice will also sell healthy takeaway food.

Charity looks to buy more pubs: The United St Saviour’s Charity is looking to buy more freehold pubs. The charity has long-owned the freeholds of The Wheatsheaf and The Market Porter pubs in Stoney Street close to Borough Market. Earlier this year the charity acquired the building which houses the Simon the Tanner pub in Long Lane. The rental income that is received from the three pubs helps to support Southwark pensioners at two almshouses and local community organisations through large and small grants. Now United St Saviour’s has signalled its intent to buy more local pubs to add to its property portfolio. Anyone who knows of “historic and iconic public houses” in North Southwark and Bermondsey which are on the market should contact Jim Wintour on 0207 089 9014.

Los Angeles Times – Cheesecake Factory has the highest site gross revenue in the US: The Los Angeles Times has claimed The Cheesecake Factory has the highest gross take per site of any business in the US. Sales are almost $2 billion a year from 162 Cheesecake Factory restaurants along with 11 eateries under the Grand Lux Cafe brand and one RockSugar Pan Asian Kitchen. Cheesecake Factory locations gross on average around $11m each and the Honolulu branch turns over $20 million a year.

New £17m restaurant quarter planned for Newcastle: A planning application for a £17m restaurant quarter within Eldon Square shopping centre in Newcastle has been submitted by owner Intu. It is expected that about 250 permanent jobs will be created once the outlets are open. The new dining quarter will be a covered family dining space set over two levels with views over Old Eldon Square, Greys Monument and the Grainger Town Conservation Area. Intu, formerly Capital Shopping Centres, said it had already spoken to many operators which have expressed interest in the project, and are looking to use the scheme to bring new catering concepts to the UK and Newcastle. Martin Breeden, asset management director for Intu, said: “Newcastle is a vibrant city and Intu Eldon Square occupies the prime pitch with an annual footfall of 36 million. We want to deliver high-quality catering which will meet the high demand from our shoppers.”

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