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Morning Briefing for pub, restaurant and food wervice operators

Fri 25th Oct 2013 - Beer negligence, Jamie's Italian, Punch, YO! Sushi and Yummy

Story of the Day:

Nick Miller attacks beer industry failures over three decades: Nick Miller, the former chief executive of Miller Brands UK and current head of the London-based Meantime brewery, has attacked the beer industry for being “generally negligent” in a host of areas, including the way it has marketed itself. Writing for Propel Friday opinion, Miller says: “The beer industry in the UK has declined by over 50% during the last three decades. Coffee, wine, cider, spirits have all stolen from the category. The ‘coffee’ category alone shows what can be achieved – 14,000 outlets selling numerous styles of coffee; it is dispensed in several ways (walk into Currys and see what you can buy to serve your coffee at home) and supermarket aisles are full of information about roasts and countries of origins. So what have these categories done that beer hasn’t? They have celebrated the intrinsics of the product – where it comes from, how it’s made, how it’s served and why it’s a high-quality option for the drinker. The beer market, for as long as I can remember, has marketed itself in an emotionally ‘laddish’ way, focusing on ‘herd mentality’ messages that have not promoted the diversity and complexity of the beers on offer. The beer industry has been generally negligent – it has cut corners in production, it has stifled choice, it has not focused on quality, it has under-talked the diversity of beer, it has lacked innovation and has homogenised itself.” Miller also argues that the current industry debate on craft beer is counter-productive. He says: “Arguing among ourselves at a trade level is no way to enhance a momentum of positive change in the beer category’s performance. Brewers have a responsibility to beer itself. I would like retailers to help us define the sub-categories to ensure that the consumer gets and understands their choices based on the products’ qualities, ingredients and methods of production. That in itself would end the debate of whether there is a craft category or not and therefore lead to a more positive drinking future led by beer.” (See the separate Friday Opinion e-mail for the full article)

Industry News:

Lambeth plans EMRO: The London borough of Lambeth is planning to use an Early Morning Restriction Order to ban the sale of alcohol after midnight. Lambeth, with support from the Home Office, is in public consultation on imposing the curfew in part of Clapham to deal with noise and disorder linked to four licensed premises: a nightclub, two bars and an off-licence. It would be the capital’s first early morning restriction order. If implemented, the EMRO will ban the sale of alcohol from midnight to 6am. Lambeth residents have complained about the Artesian Well nightclub, the Lost Society and Mist on Rocks bars, and the Vesco News off-licence in Wandsworth Road and North Street for eight years.

Panera Bread admits problems amid slowdown: Panera Bread, the cafe bakery chain with 1,600 sites that has been one of the US’s top performing restaurant companies in recent years, has blamed inadequate equipment in its kitchens and slow service for a slowdown in sales. Like-for-like sales last quarter grew only 1.7% at managed sites and 0.9% at franchised locations, and that was due to higher prices. The number of transactions dropped as customers turned away. Panera’s chief executive, Ronald Shaich, said: “The competitive environment is extraordinarily red-hot.”

Pub People Company site first in the UK to try Orderella app: The Pub People Company’s Keyworth Tavern in Nottingham has become the first pub in Britain to trial the new Orderella drinks-ordering phone app before nationwide roll-out begins next month. The app allows customers to use their smartphones or iPads to order food and drink remotely. Andy Crawford, operations director of the Pub People Company, said: “The way you order drinks in a pub hasn’t changed for a thousand years.” Keyworth Tavern manager Adrian Clarke said customers were “quite excited about it because they can order the drinks while they’re walking down the road.”

15 restaurant brands open at new Wembley Designer outlet: The London Designer Outlet, the first shopping centre offering discounted branded goods within the M25, opened at Wembley Stadium yesterday. The £100m shopping centre offers 70 stores, a nine-screen cinema and 15 restaurants. Operators at the site include Cabana (opening its fourth site), Caffe Nero, Coast to Coast (making its M25 debut), Costa Coffee, Frankie & Benny’s, Handmade Burger Co, Las Iguanas, Nando’s, PizzaExpress, Pret, Prezzo, Starbucks, TGI Friday’s, Wagamama and Zizzi.

Financial Conduct Authority sets crowd-funding rules: The Financial Conduct Authority has issued a set of regulations to govern the burgeoning crowd-funding industry. Investors will, for example, not be permitted to invest more than a tenth of their wealth in crowd-funding schemes. The crowd-funding industry currently accounts for about £350m of lending to small businesses. (Luke Lang, founder of Crowdcube, will present at the next Propel Multi Club Conference on Thursday 7 November).

British Property Federation advises members to take bigger deposits: The British Property Federation has advised members to take bigger deposits from tenants to mitigate against “manipulation” of the insolvency system. The federation said it had “reluctantly” advised members to take deposits of up to three months rent and extra security to protect against the widespread “tactical” timing of insolvencies. Current rules allow businesses placed in administration after rent quarter day to continue to use the property for up to three months without paying rent.

Company News:

Jamie Oliver goes Hard Rock route at Bluewater: Jamie Italian’s at the Bluewater Shopping Centre in Kent has been adapted for its location, with Hard Rock Café-style use of Jamie Oliver memorabilia. Oliver said: “I think what we have done at Bluewater is build it for this place, which we hadn’t done before.” ‘Jamie memorabilia’ – including a scooter – and TV screens showing Oliver’s programmes animate the walls in what he describes as his take on the Hard Rock Cafe “but for my funny little world”. He has also personally re-written the menus for Bluewater, which now includes pizzas and burgers – with doughs, buns and patties all made on site. Oliver said: “I write every single menu. I am over everything like a rash – sourcing products I am incredibly geeky about.”

Yummy seeks GMs keen to own a pub: Yummy Pub Company, the four-strong operator led by Tim Foster and Antony Pender, is looking to recruit five trainee general managers to its Yummy Academy, where they will undergo two years of training before being fast-tracked to owning their own pub in partnership with Yummy. A blog on the company website says: “It’s time for Yummy to have a growth spurt. We’ve argued for a very long time that the aspiration of our industry should not be to find great GMs, but to find great owners, the next generation to take our trade forwards, beyond sticky bars and branded glassware, beyond food, into the next phase of ‘pub’, be that what it may.” Applicants will be interviewed in the first week of January 2014. Meanwhile, Yummy will open a multi-purpose cocktail bar called Cosy Kettle in the basement of its Somers Town pub in Kings Cross, London, a Charles Wells site, next month. The expansion will help the pub cope with demand – it is rumoured to be selling more cask ale than Fuller Smith & Turner’s nearby Parcel Yard site in Kings Cross, which is selling 1,000 barrels a year.

Punch chairman earns £130,000 less than ex-chief executive: Punch Taverns’ executive chairman, Stephen Billingham, who took on the role after former chief executive Roger Whiteside left for Greggs, is earning £130,000 a year less than his predecessor. The 2013 annual report shows Billingham earning a base salary of £300,000, against Whiteside’s £430,000 a year. The highest paid director is finance director Steve Dando who earned £561,000 in the most recent year, with a base salary of £275,000 and a bonus of £210,000, up from a bonus of £100,000 the year before. Former Punch chief executive Ian Dyson earned £42,00 as a non-executive director. Overall, executive and non-executive directors earned £1.24m, down from £1.55m the year before, when Whiteside earned a total of £706,000.

YO! Sushi signs for Whiteley site: YO! Sushi has signed a new lease for a 1,800 sq ft custom-built, standalone glazed pod at the Whiteley retail and leisure destination in Hampshire, a joint venture development between British Land and Universities Superannuation Scheme (USS). Occupancy has now reached 94% at the 320,000 sq ft scheme which has welcomed more than two million visitors since it opened in May. Claire Barber, head of shopping centre asset management for British Land, said: “YO! Sushi will broaden Whiteley’s appeal even further and extend the centre’s trading hours by continuing to establish the scheme as a night time destination. Whiteley’s first phase now provides a range of quality day and evening food and drink options, ensuring there is something to suit every taste and occasion.” Kieran Sherlock, head of property at YO! Sushi, said: “We’re thrilled to be opening in the brand new retail experience at Whiteley. Our new and uniquely designed restaurant will allow an entirely new audience to discover the fun, fast and fresh YO! Sushi dining experience.”

Birmingham nightclub to double capacity in £2m move: Birmingham’s oldest nightclub, Snobs, which has seen more than 2.5 million people pass through its doors, is making a £2m move across the city. The venue will shift to a new home in Smallbrook Queensway in April, in a move that will double capacity and create new jobs. Owner Wayne Tracey said: “It is the same formula, the same design, music, features and staff, but the new place will be bigger and better. We know people are attached to this place and we want the same customers – and hopefully a few more – to enjoy the new place.” The new Snobs is expected to allow for up to 1,400 people, double the current number, although the fine detail still has to be passed by Birmingham City Council.

Sandpiper to open 70 Costa Coffee sites in Spain: Jersey’s biggest retail group is setting up in Spain with the launch of Costa Coffee in the country. Sandpiper CI intends to open more than 70 Costa outlets around Spain as it takes its first steps away from the Channel Islands. Chief executive Tony O’Neill said: “The Spanish move is a game-changer for us as it takes our franchise operations out of the Channel Islands for the first time. But otherwise it is business as usual and no changes in our local operations.”

Cheesecake Factory posts 1% like-for-likes: Cheesecake Factory, the US brand that averages $11m turnover per site, has posted a like-for-like sales increase of 1% in its most recent quarter. Cheesecake Factory operates 165 namesake restaurants and 11 sites of a sub-brand called Grand Lux Cafe, which saw like-for-like sales down 2.6%. Chief executive David Overton said: “Our performance outpaced the industry by one of its widest margins during this time frame, which is noteworthy in the context of soft industry trends and a highly promotional environment.”

Levy Restaurants wins top honours in Customer Experience Awards: Levy Restaurants, the sports and leisure division of Compass Group UK & Ireland, has won top honours in the UK Customer Experience Awards 2013, taking gold place in the Best Hospitality, Leisure, Retail and Tourism category. The contract caterer was recognised for its revolutionary approach to enhancing the customer experience at Chelsea Football Club through its “Home from Home” programme. Levy Restaurants worked with the club to create a warm welcome to visiting teams’ fans and revamped the entire customer journey from greeting guests at the Tube station, to ensuring the visitors’ stands become an extension of their home ground. In the areas for away fans, Levy Restaurants’ employees wear the visiting team’s colours and offer these guest the club’s signature food and beer. The approach ensured that the dwell time at the stadium is extended and good behaviours are encouraged.

Nando’s and Prezzo set to open in Northampton: Nando’s and Prezzo are set to open on the Sixfields development in Northampton. Construction will start on the branches of Nando’s and Prezzo next year. The original plan was for four restaurants, but this has since been reduced to two. Prezzo’s chief executive, Jonathan Kaye, said: “We can confirm that we will be opening a Prezzo at Sixfields. We are looking forward to opening and believe Prezzo will be a great addition to the eating-out scene in the area.”

Former Caprice chief confirms second opening details: Former Caprice chief executive Des McDonald will open a new 150-seat restaurant at The Rosewood London Hotel, Holborn, London in February 2014. It will be located on the ground floor of the five-star, 306-bedroom hotel which opened last week after an £85m transformation from the Chancery Court hotel. McDonald left the Caprice Group after two decades in January 2012 to launch his own restaurants. He opened his first outlet, the Fish & Chip Shop in Islington, North London, in May this year.

Cask-less Spirit leased pub re-opens with eight handpulls: The Fleece in Farsley, Yorkshire, a Spirit leased pub, has re-opened under a new licensee, Gina Howard. A two-week refit has seen the Fleece opened up, creating greater connection between its front bar and its rear snug, the introduction of a new menu, and from serving no cask ale, it now sells eight – Black Sheep, Timothy Taylor Landlord and Tetley’s as well as five changing real ales.

Yum opens 40,000th restaurant: Yum! Brands has unveiled the opening of its 40,000th restaurant, a flagship KFC store in Goa, India. By 2015, India is expected to have $1bn in system sales, which includes company and franchise restaurants. By then, Yum! will have over 1,000 KFC, Pizza Hut and Taco Bell outlets in more than 100 cities. The company plans to open a record 1,450 new restaurants in emerging markets this year. Emerging markets represent tremendous growth potential for the company. David Novak, Yum! Brands chief executive, said: “With only two restaurants per million people in the top ten emerging markets, versus 58 restaurants per million in the US, we are only on the ground floor of global growth.”

Pizza Hut narrows UK losses: Pizza Hut UK, which runs 330 sites, has narrowed its operating losses to £4.7m in the 12 months to 2 December from £17m in 2011. The company has made a loss in the UK since 2006. At a pre-tax level, the results for Pizza Hut UK show a profit of £1.3m for 2012, a turnaround from last year’s £24.2m pre-tax loss. But a spokesman for the group said the figure was flattered by several one-off transactions. These included the sale on paper of Pizza Hut UK’s delivery business to Yum! which decided to retain the takeaway operation. The restaurants business also offloaded the defined benefit pension scheme as part of last year’s takeover deal with Rutland Partners. Jens Hofma, managing director of Pizza Hut UK, said the improved trading has continued into 2013 “as we continue to implement our strategy for growth”.

Zizzi and Nando’s line up sites in Bracknell: Restaurant brands Zizzi and Nando’s have secured sites in Bracknell. The two brands have signed up to the scheme through the Bracknell Regeneration Partnership, a 50:50 joint venture between Legal & General Property and Schroder Property. Zizzi will be taking a 3,300 sq ft site on a 15-year lease, with Nando’s taking a 6,000 sq ft unit on a 20-year lease. Both brands will be situated in the new Northern Retail Area of the town centre, next to the cinema. 

Historic Wiltshire hostelry enter administration: A 16th century pub, the Angel Inn, Upton Scudamore near Warminster, Wiltshire has fallen into administration, but will continue to trade while a buyer is sought. Chris Stevens and Ian Vickers of the insolvency practice FRP Advisory were appointed joint administrators to the Angel Inn Ltd on 4 October. This restored 16th century coaching inn has a terrace, a walled garden for dining and ten ensuite double rooms, some of which are located in Angel Cottage opposite the pub, priced at £98 per night. Stevens said: “The Angel Inn continues to service the local area and enjoys a loyal customer base but has recently suffered from the wider downturn in trade affecting the pubs industry. By entering into administration, the company can continue to trade while the joint administrators seek a buyer.”

JD Wetherspoon buys Cleethorpes nightclub, to open in Hemsworth next Tuesday: JD Wetherspoon has exchanged contracts to purchase the freehold of the Amishi nightclub, in High Street, Cleethorpes. More than £1 million will be spent on the development of the venue and about 40 jobs are expected to be created. It anticipates to complete the deal mid-November, when the firm will apply for planning permission to change signage and variations to the existing licence. JD Wetherspoon chief executive John Hutson said: “We have been keen to open a Wetherspoon pub in Cleethorpes for a number of years.” Meanwhile, it will open The Blue Bell in Hemsworth, West Yorkshire (population: 13,311) next Tuesday (22 October). The company has spent £1m converting the former Crosshills Tavern, which was issued with a closure order under licensing legislation in the early hours of New Year’s Day 2011 after police were called out three times during the course of the evening for public order and drugs offences.

Vapiano wins toilet recognition: The Italian fresh casual dining restaurant Vapiano has won acclaim for the quality and standards of its toilets in the Loo of the Year Awards 2013. Both of its London restaurants (Bankside and Great Portland Street) have been awarded a platinum rating by inspectors – the highest award possible. The platinum rating is given only to outlets which offer “exceptional” toilets. The awards are aimed at highlighting and improving standards of “away from home” toilet provision across the UK. Authorised inspectors make unannounced visits to hundreds of toilets at sites across the UK in order to judge them. Vapiano UK’s managing director, Phil Sermon, said: “I am delighted that the excellent toilets at both our restaurants have been recognised by the inspectors with the highest rating possible.” The managing director of the Loo of the Year Awards 2013, Mike Bone, said: “Vapiano’s toilets are outstanding, in terms of design and cleanliness. Both restaurants thoroughly deserve their awards.”

M&B’s Browns brand launches apprenticeship second phase: A second phase of Browns Bar and Brasserie’s catering and hospitality management apprenticeship scheme, in conjunction with Apprentice 1st, will be launched on October 30th after the successful first round of apprenticeships. The scheme will see Browns take on a further 20-plus apprentices. The new arrivals will add to the 60 apprentices already hired by Browns since it started its scheme in October 2012. Participants of the first round will now graduate from Level 2 Food & Beverage Apprenticeship and Level 2 Professional Cookery Apprenticeship respectively and progress to a Team Leading qualification, setting them up for Level 3 next year. Richard Cox, for Browns, said: “Catering is not often a young person’s first choice of career, and yet we have a large demand for skilled staff. By providing a structured framework for training and career progression, our apprenticeship scheme allows young people to learn while they earn and has enabled us to recruit and retain a number of excellent team members to join our very loyal and highly skilled existing work force.”

Catering firm opens second ‘public’ restaurant: The Suffolk-based catering company Churchill Catering is opening only its second “public” restaurant, at the Buttermilk Centre in Ipswich. Churchill has one other shopping centre restaurant outlet, in the Guildhall shopping centre in Stafford. All its other establishments are in leisure centres and workplaces and cafes in shops, including canteens for, among others, Hertfordshire Police, the Forestry Commission and DHL, and cafes for Bury Leisure Centre, Mansfield Central Library and the Pods Leisure Centre in Scarborough. The new outlet, to be known simply as The Restaurant, is in a unit previously used by Cafe Giardino. The opening brings Churchill back to Ipswich: it used to operate the cafe at the Carr Street Co-op. Managing director Tony Nicholl said: “We are delighted to be returning to Ipswich. Recent openings of our high street restaurant brand have proved to be highly successful, indicating that it’s a good time to invest in the high street again.” The Buttermilk Centre’s food court closed recently and is not expected to reopen in the near future, because work remodelling the shopping centre is due to start in the new year, which will see the creation of units for new family restaurants.

Star Pubs & Bars pays £50,000 standards bonus: Nearly 70% of Star Pubs & Bars new lessees on its first year support package are on track to receive cash bonus payments averaging £1,500 each for high customer service scores. The company will pay out a total of £50k in cash bonuses. The amount paid to each lessee is determined by the marks each pub is given by independent mystery visitors who visit the pubs two times in their first year. As well as identifying problem areas and areas of excellence, the assessors, highlight potential solutions and opportunities at each outlet which are shared with lessees.

Eclectic reports Ebitda up 2%; PBR contract ends: Late night operator Eclectic, majority owned by Avanti Capital, has reported sales up 7% to £21.197m in the twelve month period ended June 2013. Ebitda before head office costs was up 15% at £5.81 million (2012: £5.06 million) and company Ebitda was up 2% at £2.92 million (2012: £2.85 million). In the 12 months the company acquired one new venue and signed a contract in August 2012 to manage all the day-to-day operations of 33 businesses on behalf of PBR Leisure, taking the total number of venues owned and operated from 16 to 50. The management contract with PBR Leisure came to an end this month. The net income from this management contract during the year ended 30 June 2013 amounted to £650,000. Madame Geisha in Brighton was acquired in March 2013 and brings the total sites currently owned by the company to 17. During the year, Reading and Manchester Sakura both had minor refits to create additional dance floor areas, which enable them, when required, to trade two different events concurrently. Avanti said: “The strong performance this year of Eclectic’s owned sites have been underpinned with quality service, strong product, table service (with over 80% of tables pre booked at the weekends), strong music and premium student nights throughout the weekdays. In addition the company has demonstrated its ability to run and operate a significantly larger estate whilst continuing to deliver increased sales and Ebitda. The team continues to search for suitable sites to further roll out its brands. With a good pipeline of potential opportunities and funding in place from Barclays Bank, Eclectic’s management will continue to look to acquire two to three sites a year, targeting a 30% Ebitda return on new sites and a 25% Ebitda return on existing sites which may be rebranded or refurbished.”

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