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Morning Briefing for pub, restaurant and food wervice operators

Fri 18th Oct 2013 - City Pub Company, PizzaExpress, Wagamama and Whiting & Hammond

Story of the Day:

City Pub Company buys 30-bedroom hotel, plans £10m fund-raising: City Pub Company, the Enterprise Investment Scheme company led by Clive Watson, has acquired the 30-bedroom Georgian House Hotel in Norwich in an off-market deal. The purchase means the company now has around 42 bedrooms in the estate, with its boutique Church Street Townhouse in Stratford upon Avon offering a further ten. City Pub Company will refurbish the site in early 2014 to create a much-improved food and beverage offer. Non-executive director John Roberts told Propel: “It’s a big old building and we think it’s got great potential.” The acquisition comes as the company prepares for its third round of Enterprise Investment Scheme fund-raising next month with a view to raising a further £10m, taking the total raised to £28m, which is close to the total permissible under EIS rules. The last £10m will be split equally between City’s two subsidiary companies, City Pub Company West and City Pub Company East. The company launched its third brewpub in Bath a few weeks ago and the venue is going “gangbusters”, Roberts reports. A fourth brewpub is planned for Winchester in 2014. The site has a sitting tenant who is due to leave in June 2014 and City Pub Company plans to site its brewhouse in the courtyard outside the pub. “The earliest we expect to open in Winchester is in the summer of next year,” Roberts said.

Industry News:

Wisconsin set to allow bars to sue underage drinkers: The Wisconsin state senate has passed a bill that would allow bars and liquor stores to sue underage customers or their parents for $1,000. The measure previously passed the assembly and now heads to state governor Scott Walker. The Republican-sponsored bill would allow anyone with a liquor licence to bring civil lawsuits against underage patrons. A parent or guardian could be sued if the underage drinker is a minor.

RPI increase will mean £58m bill for sector: Licensed hospitality may be hit with an increase in business rates that the ALMR estimates could cost the sector up to £58m, after the Office for National Statistics’ announcement earlier this week of a rise in the RPI of 3.2% for September 2013. The annual business rate increase for April is currently set by reference to the previous September’s rate of RPI. The snapshot is applied irrespective of annualised RPI levels and, historically, September’s figures have been higher than the annual average.

Marketing spend increases as confidence returns: The UK’s biggest brands increased their marketing budgets by the largest margin for 13 years in the third quarter as marketers became more confident about the prospects for their companies and industries. The latest Bellwether report, a quarterly survey of 300 senior marketers from the UK’s top companies and a respected barometer of confidence in the industry, found a net balance of 12.3% revised their budgets upwards in the three months to 30 September, up from the 7.3% seen in the previous quarter and the steepest quarter-on-quarter revision since the survey began in 2000.

McDonald’s launches premium wrap in the US: McDonald’s has introduced a new Southwest Chicken Premium McWrap as a limited-time offer through to the end of the year. The item, available at McDonald’s more than 14,000 US restaurants, contains either grilled or crispy chicken glazed with a coriander-lime sauce, spring greens and lettuce, tomatoes, Cheddar-Jack cheese, tortilla strips and a creamy habanero-ranch sauce, served in a flour tortilla.

Tortillas now outselling burger in the US: Tortillas are now outselling burgers in the US thanks to the country’s growing Hispanic community. But part of the popularity of Tortillas is linked to their ubiquity with many American no longer regarding them as ethnic, according to a report by the Tortilla Industry Association. Hispanic food has also enjoyed broad adoption because it is easy to cook at home. Health-aware Americans are also switching to tomato-based salsa, which is outselling ketchup on a two to one basis. 

PizzaExpress commissions research on the perfect pizza: PizzaExpress has commissioned research on the perfect pizza that has found it is better to go large to avoid a soggy bottom. Dr Eugenia Cheng found a larger pizza allows for a “more even spread” of toppings and smaller pizza mean proportionately more crust, with an uneven amount of toppings in the centre. A formula devised by Dr Cheng suggests those buying a 14in pizza should pay that same as those eating a 11in pizza because the amount of toppings and dough are the same, just spread more evenly and thinly.

Company News:

Rita’s Ice looks to open 100 units in UK: Rita’s Ice, the 30 year-old US Italian ice and gelato brand, is looking to open 100 sites in the UK in the next seven years once it has signed a master franchise licence. Scott Schubiger, vice-president of worldwide franchise development, has been in London this week talking to prospective franchisors. He told Propel: “We are working on a deal for a UK master licence, although nothing is inked as of yet. We’d like to open 100 units in the UK over six or seven years, including mobile units and kiosks – Rita’s Ice is a very scaleable and differentiated product without the competition you see in the better burger and yoghurt categories.” Rita’s Ice has expanded to Canada and India, and opens its first site in China next month. Other territories being targeted by Rita’s Ice include Turkey and the Middle East.

Whitbread hosts Gherkin event to set out Premier Inns requirements: Whitbread hosted a reception at the top of the Gherkin – 30 St Mary Axe, in the City of London – on Wednesday evening for developers and professional advisers in which it outlined its expansion plans, particularly within the M25, where the company is believed to be looking to double capacity over the next few years. Whitbread said: “We have more than 650 hotels and 50,000 bedrooms trading across the UK and Ireland. We also have a demand for six million square feet of development space over the next three years. We’re keen to work with partners who can help us achieve our goal to increase the size of Premier Inn by 45%, to 75,000 bedrooms by 2018.”

Wagamama launches eight new dishes: Wagamama has launched eight new dishes on its autumn/winter menu. New dishes include a grilled fish ramen topped with grilled dory, prawns, mussels and clams; teriyaki salmon ramen served in a spicy miso soup; and a pork ramen with a miso, ginger and chicken soup. The Wagamama ramen is being re-launched with a new recipe to include mussels and barbecued pork. One returning dish is the chuchee curry. The yasai pad thai now has a version with chicken and prawns. A taster dessert has been launched that includes a trio of chocolate, ginger and passionfruit cheesecakes. Wagamama is also bringing back its chocolate and passion fruit frozen yoghurts. It has also introduced a new blueberry, apple and ginger juice.

Planning delays and bats cost six months at Whiting & Hammond site: Planning delays and the possible discovery of bats have cause a six-month delay to the opening of Whiting & Hammond’s flagship eighth site. The company had planned to re-open the King’s Head in Bessels Green, Sevenoaks, Kent this month after a £700,000 co-investment with Punch Taverns. The latest delays involve an investigation into whether there are bats in the loft. Managing director Brian Whiting said: “We’re not touching the loft in the refurbishment but the local authority requires 21 days to read a report, which concludes that the expert is not sure whether bats are still there.” The start of refurbishment work has been put back to 6 January 2014, with a view to opening in March 2014. Of the decision to take on a Punch pub, Whiting previously said: “Punch has really pulled out the stops to recruit us to the estate. I don’t think Punch will get much change out of £500,000 and we’ll be spending around £200,000. It’s a beautiful site opposite the village green, right in our heartland.” Last night, Whiting & Hammond hosted Albert and Michel Roux at its Chaser Inn in Shipbourne, Tonbridge, where the father-and-son chefs cooked to raise money for the Saint Giles church and Farmers’ Market.

Cavern Club complex in Liverpool sells for £4.13m: The Cavern Walks shopping centre in Liverpool, which contains the Cavern Club and a Flares site operated by Stonegate Pub Company, has sold for £4.13m at an auction run by Allsops. It produces total rent of £1.14m, which means the unnamed buyer is earning a 27.74% yield on their investment.

Greene King opens first Realpubs site outside London today: Greene King will open the first Realpubs site outside London with the conversion of the Anchor on Silver Street in Cambridge city centre to the premium format today (18 October). It will feature a 50-cover first floor serviced dining room and a refurbished lower bar area with five changing cask ales and a selection of craft beers and cider served from a back bar dispenser. Five more site conversions are under way: the Golden Fleece on Queen Street, near St Paul’s, in the City will open in November, with conversion work also taking place at Boaters, Kingston, Surrey; The Salt House, St John’s Wood, West London; The Wilmington, Exmouth Market, North London; and The Kew Gardens Hotel in Kew, South West London.

PizzaExpress unveils autumn menu: PizzaExpress has rolled out an autumn menu with six new main dishes and two new starters. The main dishes are Toscana Romana (fennel and chilli sausage, tomato, baby mozzarella, Gran Moravia cheese, basil and extra virgin olive oil); Caprina Rossa Romana (beetroot, goat’s cheese, red onion, mozzarella and tomato topped with rocket, pesto and a wedge of lemon); Calzone Verdure (goat’s cheese, chargrilled vegetables, sweet baby onions, spicy arrabbiata sauce, baby fresh spinach and pesto); Cavatappi Formaggi (Taleggio cheese, mozzarella and cavatappi spirals in a four-cheese sauce, served with dough sticks); Lasagne Verde (chargrilled vegetables, capers, olives, mozzarella, béchamel and passata with spinach pasta and arrabbiata sauce): and Oven-Baked Taleggio Cheese (chunks of taleggio cheese with rosemary and a four-cheese sauce, served with warm dough sticks). The new starters are Dough Balls Doppio (a double portion of dough balls to share, served with three dips, pesto, garlic butter and spicy n’duja sausage and olive oil); and Risotto Pollo Funghi (creamy white wine risotto with chicken, pesto, chestnut mushroom, pine kernels, parsley and garlic, finished with rocket – also available as a main course).

Harvester adds seven puddings: Harvester, the Mitchells & Butlers brand that serves just under 30 million meals a year, has added seven puddings to its menu. They are: blackcurrant and white chocolate and cherry cheesecake (£3.99), chocolate orange sundae (£3.89) and toffee apple sundae (£3.89), Black Forest brownie (£3.89), bread and butter pudding with orange liqueur (£3.99) and raspberry jam roly poly (3.79).

Revere set to launch two further sites: Revere Pub Company, Marston’s premium pub brand, is to open two more sites next month, the White Lion in Tenterden, Kent and the Florentine in Fulwood, Sheffield, to add to the existing six. Designed by Concorde BGW, each pub will provide boutique hotel-style contemporary décor, bespoke furniture and textured fabrics In-room facilities such as luxury bed linen, flat screen TVs, spacious bathrooms, complimentary Wi-Fi and homemade luxury welcome baskets come as standard. The White Lion is a 16th century coaching inn with 14 bedrooms inclusive of five super-king rooms, five king-size rooms and three deluxe family suites, in addition to a 128-cover dining room, and a 16-cover private dining area. The Florentine, formerly called the Fulwood Inn, is two miles from the centre of Sheffield, with 11 bedrooms: four super-king, five king, one double and one family room. Dishes in the restaurant include 28-day aged prime cuts of beef from John Penny’s farm in Yorkshire cooked with a Josper charcoal flavour, and a range of homemade pizzas, cooked in an Italian wood-fired oven.

Domino’s launches hybrid dessert: Domino’s UK has launched its own hybrid dessert, the twisted chocolate doughball. The dessert consists of fresh pizza dough twisted with chunks of rich Belgian chocolate. It launched via Domino’s Facebook page on Wednesday and goes on sale at sites from Monday (21 October). Domino’s dough master, Walter Currie, said: “It’s simple really. Everyone loves pizza and most of us are partial to a nibble of chocolate.” The company’s sales and marketing director Simon Wallis added: “There are a lot of hybrid desserts on the market at the moment with some truly unusual flavours, but we’re confident that our Twisted Chocolate Dough Balls will stack up against even the most tempting of treats.”

Turtle Bay seeks to open venue number eight in Bath: The Caribbean-themed restaurant chain Turtle Bay is seeking planning permission to open its eighth outlet, in a former music shop in Bridge Street, Bath. Turtle Bay, headed by Ajith Jayawickrema, who co-founded Las Iguanas with Eren Ali, has opened five restaurants since 2011, in Leicester, Bristol, Nottingham, Southampton and Milton Keynes, with more openings due in Birmingham and Leamington Spa. In June, the private equity firm Piper Private Equity took a £6m stake in the company. Public consultation on the Bath application ends on 4 November.

Snug Bars reports profits doubled: Snug Bars, the five-strong operator led by Giles Fry, has reported like-for-like sales growth has hit 15% in its current financial year which ends in February 2014 – profit doubled in its most recent financial year. The company is looking to add two more sites before the end of this financial year. Fry said: “We are working closely with three different pubcos (on finding new sites) and looking at a private leasehold and hope to announce some positive news before Christmas.” The company’s Snug venue in St Albans has just been named the town’s best venue in an online competition. The site offers hand-made gourmet burgers and more than 160 premium cocktails.

JD Wetherspoon to open £1.2m Oakham pub next month: JD Wetherspoon will open a £1.2m pub The Captain Noel Newton, which is opening in the former Royal British Legion building, in Oakham High Street, on 12 November. JD Wetherspoon is also planning to open a new £1.2m pub in nearby Stamford, Lincolnshire. The company has received planning permission to open a venue at the Mercury offices in Sheep Market but is currently in negotiations with South Kesteven District Council over its opening hours.

Stonegate looks to boost pre-booked sales with new role: Stonegate Pub Company has put plans in place to boost pre-booked sales across its businesses with the appointment of Alex Griem in the newly created role of head of pre-booked sales. Reporting to Richard Bruce, Stonegate’s marketing director, Griem, who brings with him eight years of experience in marketing and pre-booked sales, has been tasked with developing and growing Stonegate’s revenue streams in pre-booked sales across the 548 pubs and bars in the estate. Griem said: “The Stonegate estate is really diverse, with a variety of businesses that cater for a range of occasions, so for me, there’s a huge amount of potential to grow pre-booked sales.”

Prezzo to open 16 new restaurants before Christmas: Prezzo, led by Jonathan Kaye, is to open 16 restaurants between now and Christmas. The company is opening ten Prezzo Italian restaurants, three Chimichanga Mexican restaurants and three Cleaver restaurants, specialising in burgers, ribs and chicken. It is investing more than £8m on the new restaurants and creating more than 300 jobs. The restaurants will be spread across the UK, including Ripon, Preston, Birmingham, Oxford, Gloucester and Trowbridge. The new openings will bring the number of restaurants run by the group to 239. Kaye, Prezzo’s chief executive, said: “Many of the restaurants will be opening in towns where we are not yet represented. We are looking forward to further expansion throughout 2014 and beyond.”

Home Grown Hotels reports £3.6m turnover in first full year: Home Grown Hotels, which operates the Pig brand and is led by Robin Hutson, has reported turnover of £3.6m during its first full year of operation in 2012. A Companies House filing stated that with an operating profit of £428,000 and Ebitda of £900,000, the business has gone “from strength to strength”. The 26-bedroom Pig in Brockenhurst, Hampshire, which launched in July 2011 and the 12-bedroom Pig in the Wall in Southampton, launched in October 2012, enjoyed average occupancy of 90%, peaking during the year, and 96% in August and October. Average daily covers in the restaurant during 2012 were 146, with a high of 163 in August. The directors’ report said: “Behind these excellent statistics lies the ability of the hotel’s management to efficiently handle such large numbers.” Home Grown Hotels acquired the Manor House hotel in Studland, Dorset, on a leasehold basis from the National Trust for around £3m at the end of 2012. The 23-bedroom hotel is currently being refurbished and will re-open as The Pig on the Beach in spring 2014. 

Online training massive hit as Admiral passes 100 mark: Admiral Taverns, the current pub company of the year, is celebrating a milestone, with well over 100 licensees successfully completing training through its recently-launched e-learning programme. The online courses are designed to ensure licensees and their staff can receive training as and when they need it, at any time of the day, fitting around the demands – and diverse working hours – associated with running pubs. Launched in partnership with training specialist CPL, the new range of courses are available to all Admiral Taverns licensees through an online portal accessed through the group’s website and via PC or tablet. The courses include compliance training as well as a range of business-building modules. Suzanne Smith, head of licensee recruitment and training at Admiral Taverns, said: “I’m delighted that we have reached this milestone so quickly. It’s been a really important and positive move for Admiral, as the delivery of training online fits so well with the demands placed upon licensees. We think that is why we are seeing such strong take up of e-learning. Being legally compliant is business critical. We have partnered with CPL so that our licensees can ensure they are compliant by having access to this innovative platform that makes learning fun and interactive, as well as being accessible to all.”

Sticks ’n’ Sushi confirms opening date in Covent Garden: Sticks ’n’ Sushi has confirmed it will open its second London restaurant, at the site of the former Walkabout on Henrietta Street, Covent Garden, on Saturday 9 November at 3pm. Kim Rahbek, chief executive of the Danish operator, said: “We came to Wimbledon as an unknown with big dreams and were made very welcome by the locals. We have nerves, but are courageous in our team and what we do, so we can only hope to enjoy the same excitement for our new central location.”

Duke of Gloucester opens Sheffield’s newest pub: The first pint at The Millowners Arms in the heart of Kelham Island Museum in Sheffield has been pulled by the Duke of Gloucester. The Millowners Arms is the museum’s latest attraction, dedicated to bringing to life the history of Sheffield’s brewing industry and the role that pubs played in quenching the thirst of hot and dusty steelworkers in Victorian times. John Hamshere, chief executive at Sheffield Industrial Museums Trust, said: “It’s entirely fitting that Kelham Island Museum should have a fully working pub display, as pubs played a key role in the story of Sheffield’s industrial past. Pubs were central to the lives of steelworkers – when shifts finished, workers often retired to the pub, and even wages were paid in the pub. Victorian Sheffield is reported to have had more than 1,400 licensed premises at its peak.”

Spirit sells Lake District pubs off an asking price of £350,000: Spirit Pub Company has sold an historic pub in the Lake District has been sold off an asking price of £350,000. The Ship Inn at Sandside, in Milnthorpe, dates back to 1671 and was sold by Spirit to Guardian Pensions of North Lancashire. The two-storey pub, which is currently undergoing a refurbishment, occupies a one-acre site and has former letting accommodation and a self-contained flat. It was sold by the North West office of real estate adviser Colliers International, acting for Spirit. Jeff Wraith, associate director in its licensed and leisure team, said: “The Ship Inn is an excellent example of a sensibly priced business opportunity which generated good levels of interest from a wide range of bidders.”

Jamie Oliver’s fish supplier sold to Bidvest Fresh: The fresh fish merchant that supplied Jamie Oliver’s Barbecoa and Jamie’s Italians, as well as the Queen, Restaurant Gordon Ramsay, Harrods and Rockfish Bristol, has been sold to the food service giant Bidvest Fresh. The Devon-based Channel Fisheries, whose boats land bass, lemon sole, monkfish, brill and sole at Brixham and Bideford in Devon and in South Wales, as well as catching crabs, lobsters and scallops, and collecting cockles and mussels, went into administration earlier this month. Its core business was sold to Bidvest, while its restaurant and Welsh wholesale operation, centred on the Fish At 85 restaurant in Cardiff, which opened in 2011, has been sold to a Cardiff-based shell company, Mandaco 777.

Six Town and Country sites on the market: Six Town and Country Pub Company leasehold sites are on the market through Colliers International after the company went into administration. The portfolio comprises properties across London, Berkshire and Oxfordshire, including three London pubs: Bollo House in Chiswick, the Bridge Tavern in Barnes, and the Ealing Park Tavern in South Ealing. The two Berkshire properties are Casanova in Hungerford and the Spring Inn in Sulhamstead, Reading. In Oxfordshire, Colliers is offering for sale the Flowing Well in Abingdon. Ross Kirton, a director at Colliers International, said: “The administrators will continue to operate the businesses as a going concern for the time being while the sales process is undergoing. The sale of this portfolio will especially appeal to independent and small multiple operators, who will have the opportunity to acquire excellent food-led businesses in popular neighbourhood locations.”

‘Lack of trust will colour market place’: A “chronic lack of trust” is going to colour the consumer landscape over the medium term, according to Paul Flatters, chief executive of Trajectory Partnership, the consumer insight consultancy. Although the UK economy is doing “significantly better” than economists thought it would be this time last year, people are “really fed up at being let down by institutions”, Flatters said, citing the horsemeat scandal that hit the UK food chain, the newspaper phone hacking scandal, the furore about MPs’ expenses, the Jimmy Savile scandal at the BBC and cover-ups in the NHS. “There’s a bunch of consumers out there who are actually looking to get even with brands,” he told delegates from dozens of hospitality firms at Fourth’s Customer Conference 2013 at the British Museum in London yesterday. However, Flatters told delegates, in a presentation on trends affecting the hospitality industry, there were other trends about that were purely driven by the economy. One was low consumer confidence, “which, if we are going to go into an upswing, will soon right itself.” Attitudes to corporate social responsibility, which covers whether or not people care about how green a company is and so on, was something that people had become less concerned about during the downturn, Flatters said – “people had more pressing concerns, they had monetary matters to think about, and not so much how environmentally friendly you were.” However, he said, price consciousness and “discretionary thrift”, while caused originally by the recession, “might turn out to be part of the new normal. All our research has shown that even among the most affluent consumers, in some cases particularly among affluent consumers, there’s a real appetite for getting deals.” That, he said, had happened irrespective of the state of the economy: “It’s a social values thing, it’s a cultural think, it’s linked to getting back if you think you’ve been screwed over by businesses that have not been paying their taxes, you can get something back.” A survey had shown that 58% of consumers now say the cheapest price is important, while only 38% say a trusted brand is important. Technology trends, meanwhile, “have steamed ahead regardless of the state of the economy,” including rapid developments in mobile and tablet commerce. England said “leisure”, broadly defined, “didn’t have such a bad recession, overall.” It had been tough over the past five years, he said, “but you could have been in a worse sector. What this recession has shown is that we do live in a ‘play’ society, where people value their leisure and they’re voting with their wallets even during the downturn. If we’re looking at a slightly more upbeat picture next year, that will continue.” However, he said, it looked as if there would continue to be a legacy of “underemployment”, with the number of people working part-time who wanted to work full-time but could not get the hours continuing to rise. “It will be quite an uneven recovery,” he said. Earnings look set to continue to fall behind the rise in the official cost of living, Flatters said, and people may not feel more affluent, despite a rising GDP. However, “if the economists are right” that will correct itself by 2016 to 2018, he said.

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