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Morning Briefing for pub, restaurant and food wervice operators

Tue 8th Apr 2014 - Propel Tuesday News Briefing

Story of the Day:

Enterprise develops ready-made food formats at three sites: Tenanted pub company Enterprise Inns has stepped up its focus on food with the development of ready-made formats at three pubs. The move is part of a initiative by Enterprise that has identified key pubs for major development. The food concepts are being offered at three pubs initially – The Cross Keys in Rotherham, The Crooked Spire in Chesterfield and The Stoops in Dronfield. The Cross Keys and The Crooked Spire are both soon to become pub and pizza kitchens while The Stoops will offer high quality coffee, cask ale and British tapas. Enterprise divisional director Duncan Marsden said: “We are always monitoring our estate and the trends across the industry to give us the best picture of what’s working well and how we can best support our licensees. We are seeing that consumers are becoming more adventurous with their food and their needs are changing. We believe there is a huge opportunity in the marketplace for pubs to provide a range of different food offerings. With each of these pubs we identified a gap in the local market. We believe there is a great opportunity for these community pubs to move away from the traditional pub food menu and offer something a little bit different, fulfilling consumer demand in their respective areas.  We have seen significant growth in the market for pizza in pubs, and for this concept we want to create an open kitchen that will not only serve top quality pizzas but also give the pub a modern feel. With The Stoops we’re looking to reposition the pub completely. We want to make it more female-friendly so there will be cakes and coffee available in the afternoon and British tapas for lunch and dinner. These are three special pubs so we’re looking for three special operators who can really help develop the concepts and make sure these businesses are a huge success.” Anyone interested in finding out more should visit the recruitment team on 0800 953 0072 or e-mail

Industry News:

Punch bondholders signal agreement to covenant waive: A group of senior Punch Taverns bondholders have agreed to the company’s request to waive covenants to avoid default of its securitisations. Punch has earlier asked for a meeting on 29 April for the purposes of voting on covenant waiver requests. The waivers are necessary to avoid the risk of a near-term default in both securitisations, which in the case of the Punch A securitisation is anticipated to be as early as 15 May 2014. A statement from ABI Senior Noteholder Committee said: “The waivers have been reviewed by the Committee. The members of the Committee find the waivers acceptable. They intend to vote in favour of the extraordinary resolutions in respect of their holdings and they will be inviting other ABI members to consider a similar course of action.”

Over 11,000 pints sunk at the UK’s ‘biggest ever’ pub beer festival: The Craft Beer Co. hosted the UK’s biggest pub beer festival at its site in Clapham, London, over the weekend, with visitors drinking over 11,000 pints. Going under the name ‘Craft 100’, the festival showcased 100 beers at the same time, from breweries across the UK, along with a few international guests. Craft Beer Co. managing director Martin Hayes said: “Craft 100 was a huge success, with a range of beers that blew people away – many of the beers were brewed specifically for the festival which made it even more special for those that made it along. This was a very special weekend for us, we’ve never tried to tackle an event on that scale before, but I’m delighted with how the team dealt with the logistics of it all.” The success of the festival comes on the back of last week’s news that the Craft Beer Co. will open a ‘flagship’ West End venue in early May, a Punch Taverns site.
US foodservice provides one in six new jobs created in March: The US economy gained 192,000 jobs in March with the foodservice industry contributing more than 30,000 jobs in the month, second only to professional and business services, sectors that added a combined 57,000 jobs during the month. March marked the 49th consecutive monthly gain in foodservice jobs and the strongest increase since October, the National Restaurant Association said. Over the past year, food service and drinking places have added 323,000 jobs in the US.
Rosinter reports low double-digit sales declines: Russian restaurant company Rosinter, which former Mitchell & Butler executive Kevin Todd led until the end of March, has been seeing low double-digit declines in like-for-like sales in 2014. Founder and chairman, Rostislav Ordovsky-Tanaevsky Blanco told Nation’s Restaurant News: “We had seen things [in Russia] stagnating already, not only at Rosinter but also in the foodservice sector and retail sector, which had seen a drop in consumption. All in all, 2014 will be a difficult year regardless of Crimea. It adds a bit of nervousness to the situation, but the 10% devaluation [of the ruble] makes an impact and brings inflation on the goods we buy. There also will be a slow balancing in the correction of the real estate market.” Rosinter operates 383 restaurants including 33 TGI Fridays units and 28 Costa Coffee locations, and it is the licensee for McDonald’s locations planned for Russian transportation hubs.
Community campaign launched to save London’s smallest pub: A community campaign has been launched to save a neighbourhood pub, famous for its claim to be the smallest in London, from being converted into a house. The Swan & Edgar in Linhope Street, Marylebone, has closed but locals want it to be brought back into use as a pub. Planners at Westminster City Hall have received a new application from developers for permission for a change of use to a residential property and “Save The Linhope Street Local” campaigners are determined to stop it. The council has already turned down one bid for planning consent earlier this year, but the new attempt includes new details about why its owners do not think it is “viable” as a bar.

Company News:

Giggling Squid adds 11th site – “private equity deal quite likely but not certain”: Giggling Squid, the Thai restaurant chain with national ambitions led by Andy and Pranee Laurillard, has secured its eleventh site – an existing restaurant in Sevenoaks, Kent. The company opens its ninth site in Horsham, West Sussex, located at a former Giraffe site, next Thursday (17 April) and has an opening in Maidstone scheduled for later in the year. The company, which is forecast to achieve £1.4m Ebitda this year, is hitting sales of £32,000 per week at its most recent opening in Marlow, a 2,000 square foot site with 114 covers. The company is also in advanced negotiations for two additional sites and in early discussions on three other sites. Andy Laurillard told Propel: “We’re talking to a number of (private equity firms) on an ongoing basis. It’s quite likely (we’ll take investment) but not certain.”
North-east Italian chain Sambuca to expand into Spain: The 12-strong north-east Italian chain Sambuca is to expand into Spain with an opening in Benidorm with a further two to follow in Alicante and Torrevieja. The Benidorm restaurant is on Lavante Beach, opening within the next month for the summer season. “We were encouraged to open in Spain by our customers,” said a spokesman for the company. “They kept saying they loved Spain but that they would love to be able to go to a restaurant like ours with great food at great prices. We looked at where people go on holiday and we decided to try Benidorm. We went across last year during the summer season to see footfall, view prices, competition and premises and we have bought on Lavante Beach. The premises can hold 70 covers and it has been ‘Sambucafied’. It has been kitted out in the same tiles, angels and gold mirrors as our other restaurants and we will be serving the same quality food as we do back in the north of England.” The company’s flagship restaurant, Santanas in Jesmond, Newcastle, opened its doors to the public 28 years ago. The company opened Sambuca nine years ago on Union Quay and operates Cassia Sambuca 100 metres away. The company has added sites in Blyth, Whitley Bay, Forest Hall, Heaton Park, South Shields, Sunderland and Durham.
Pub entrepreneur Michael Thurlby places All Saints Hotel division on the market for £5.5m: Pub entrepreneur Michael Thurlby, who operates six award-winning pubs in the Stamford area of Lincolnshire, has placed the three separate All Saints Hotels sites that he co-owns with his sister Sue Olver on the market. The sites, which are offered individually through agent Christie + Co, are: The Crown Hotel in Stamford, Lincolnshire (£3,800,000 for the freehold), The Exeter Arms, Easton on the Hill, Stamford (£750,000 for the freehold) and The White Hart, Uffington, Lincolnshire (£750,000 for the freehold).
Prezzo adds Edinburgh site to pipeline: Prezzo has added a prime Edinburgh site to its property pipeline with the acquisition of the Bar Roma Italian restaurant in the west end of Edinburgh – it will re-open as the city’s first Chimichanga next month. Bar Roma closed last summer after owner Mario Cugini said he and his wife Bibi wanted to retire and had no-one to take on the business, which had operating in Queensferry Street since 1981.
JD Wetherspoon wins alcohol licence for Alnwick pub: An alcohol licence has been granted for a new JD Wetherspoon pub in Alnwick, Northumberland (population: 8,000). Planning permission was approved to convert the Grade II listed former Corn Exchange, on Bondgate Within, to a JD Wetherspoon pub last month, bringing the building back into use after it was left empty for 20 years. The licensing committee granted the sale of alcohol from 8am to midnight, Monday to Wednesday and Sunday, and 8am to 1am, Thursday to Saturday.
Raymond Blanc to open fine-dining restaurant in London: Raymond Blanc is planning to open a new fine-dining restaurant in London, according to The London Evening Standard: Blanc told The Standard: “I am going to open a restaurant in London very soon. It’s truly exciting. For a long time I have wanted to and it is going to happen.” The chef said he was “about to” secure a premises for the new London venture, but wouldn’t be drawn on a location. “My geography is terrible. Will it be fine dining? Yes. I can’t say exactly when it will open — it is all under wraps at the moment.”
Pug Pubs set to open second Punch Taverns site – with pop-up barber shop: Pug Pubs, led by Matt Crowther and Nigel Pinegar, is to open its second Punch Taverns pub, The Royal Pug, formerly The Sozzled Sausage, in Leamington Spa on Friday (11 April). Situated on Regent Street, the pub was closed for six weeks whilst a £250,000 joint refurbishment was carried out – the investment has created almost 30 new jobs including six new chefs. Inside, the pub has been redecorated in a vintage style with retro features and will have a pop-up barber shop towards the back of the pub. The pub now boasts a new menu featuring a range of pub classics as well as swinging skewers and stone-baked pizzas with a twist, such as ‘rah rah ok yah’ topped with salmon and cream cheese and the ‘chilly billy’ topped with chilli con carne. The drinks selection has also been extended to nine cask ales including the pub’s own ‘Royal Pug Ale’ brewed by the Old Pie Factory, The Fat Pug Ale brewed by Warwickshire Beer Co and will also feature a selection of wines from local Underwood winery. Crowther said: “For Pug Pubs, this is our second Punch pub and we wanted to invest in a pub that had the potential to be at the heart of the neighbourhood with something for everyone and accessible to all.”
Benito’s Hat opens sixth site in London: Mexican brand Benito’s Hat has opened its sixth London site, this time on Leadenhall Street. The latest sites is spread across three floors, features an exclusive ‘hidden’ Margarita and Mojito bar, the President’s Bar, state-of-the-art electronic ordering and two burrito creation lines. The ‘President’s Bar’ is tucked away on the first floor and hidden behind a set of doors – the pop up President’s Bar opens only in the evenings. Founded in 2008 by former City tax lawyer Ben Fordham, Benito’s Hat has branches at Goodge Street, Covent Garden, Oxford Street, Kings Cross and Farringdon. The company’s executive chef is Felipe Fuentez Cruz and the company claims it is the only Mexican restaurant group with a founder native chef.
Pizza Hut UK legal chief reveals the good and bad of legal support review: Sarah Nelson-Smith, who is UK legal chief for KFC and Pizza Hut owner Yum Brands!, has revealed the ‘good and the bad’ of a review of its legal support in an interview with The Lawyer. The review concentrated on whether firms were a good cultural fit and had adequate experience in the market. Firms were asked to identify a significant market trend and how it might affect the business, to come up with an innovative Pizza Hut or KFC menu offering and, more unexpectedly, to share the single best piece of advice they’d ever been given. She said: “Some of the firms carried out internal surveys by ordering in pizza and KFC for their teams and asking them to analyse the products and suggest innovations.” One unsuccessful law firm cited the use of track changes on documents as their idea for how Yum could improve its business. Nelson said surprisingly archaic approaches to pricing were put forward, in particular charging property work relative to the cost of the acquisition or sale. “It seems illogical, particularly when you compare a low-value but complex Scottish transaction with a quick and easy London transaction with a higher land value,” she said. The review led to substantial savings, with firms offering more modern fee structures such as fixed, capped and blended rates. It introduced value-added services that would not otherwise have been offered, such as lawyers being seconded in-house.
BrewDog closes original Fraserburgh brewery site: Scottish brewer and retailer BrewDog is closing its original Fraserburgh brewery site where it began brewing in 2007 – the company now occupies a state-of-the art premises in Ellon. The company stated: “With the imminent opening of our brand new visitor centre and pilot brewing kit on site in Ellon, we will still be brewing loads of small batch, weird, whacky, bizarre and beautiful craft beers, but we’ll be consolidating all our sites into one happy family rather than spread out across the north east coast of Scotland. We will be moving the first ever mash tun from Fraserburgh to London and installing it in our Dalston Brewing Academy, so the students there will be learning to brew on the kit we started our brewery with.”
Burger & Lobster owner reveals details on new brand Beast: Goodman, the operator Burger & Lobster, will open a restaurant called Beast in the basement in Chapel Place, Marylebone on 6 May serving only king crab and steak at £75-a-head. The king crab is caught from small, coastal boats and will be shipped to the UK live by Norway King Crab AS, based at Bugoeynes, in the Arctic Circle. The company holds Friends of the Sea approval for king crab. “The concept will be one fixed price to include starters, main courses, side dishes, dessert,” David Strauss, who heads the UK operations of Goodman, a Russian restaurant company that entered London in 2008, told Bloomberg. “There will be no substitutions, no daily specials.” Diners will eat at communal tables with 100 covers in total – there will be room for another 20 customers on a terrace. USDA prime steak will be served alongside the crab. Goodman currently operates five Burger & Lobster sites.
Radio DJ Chris Evans partners businessman for Hampshire restaurant: Radio Two DJ Chris Evans is partnering Hampshire businessman Rob Smith to re-open a restaurant in the New Forest town of Lymington – the pair will re-open The Haven at Easter. Evans tweeted his involvement in the business: “Absolutely delighted to be involved with Rob Smith and his family in The (new) Haven bar and restaurant in Lymington. Very excited indeed.” Billed as the only seafront restaurant in Lymington, The Haven is part of a marina complex and provides views of the Solent. Smith told the local newspaper: “He used to have a boat at Lymington, which is how we met. I asked him to come down and have a look and he said he’d love to be involved – he’s as excited about it as I am. Apart from loving food, wine and hospitality he also likes Lymington and the New Forest.”
Harry Ramsden’s launches “broader” summer menu: Harry Ramsden’s, the fish and chips brand, has launched a new summer menu which broadens its range of menu items. Free range spatchcock chicken, cooked on a unique vertical grill, will also be introduced and prepared to order with rock salt, hickory BBQ or piri piri sauces – these will be available as whole chicken for two-four people (£17.99) or half chicken (£9.95) and served with Harry’s ‘slaw and chip shop chips. The range of vegetarian options have also been expanded to include griddled halloumi salad served with crisp leaves, olives, cherry tomatoes, lime, thyme and chervil dressing (£7.95), the ‘ultimate vegetarian lasagne’, topped fresh pesto and served with baked garlic bread (£8.95) and vegetable balti pie served with chip shop chips or mash, Harry’s mushy peas and gravy (£7.95). Burger options now include chicken New Yorker with smoked bacon, cheese and smokey BBQ sauce (£9.25), falafel and spinach burger with chunky tomato chutney (£7.95) and British pulled pork with BBQ sauce and dill pickle (£8.95) all served with chip shop chips. The new menu will be launched in Bournemouth on 9 April and will be rolled out thereafter at Harry Ramsden’s seaside restaurants in Blackpool, Eastbourne, Great Yarmouth and Scarborough.
New CenterParcs site, Woburn Forest, to feature first-of-its-kind spa: The new CenterParcs site at Woburn Forest, opening in the Spring, will feature a spa that will offer first-of-its-kind facilities. The spa encompasses a range of different approaches used in many of the leading European therapy centres all gathered under one roof. The spa will be divided into six nature specific sections; Fire and Ice, Mineral and Gemstone, Blossom, Herbal, Sensory and Salt. Each section will provide a range of multi-sensory experience rooms for guests, two of which (the Sensory Experience and Mineral Room) are the first of their kind in the world. Transport hub food specialist SSP is to open three brands at the new CenterParcs site at Woburn, The Shearing House, Dexter’s and Canopy. Dexter’s is described as producing “real honest food” with hand-pressed burgers, Canopy offers “relaxed poolside dining for all the family” and The Shearing House provides “contemporary British casual dining with a playful twist”. The site will also feature a Cafe Rouge opening.

Douglas Jack issues ‘Buy’ note on Spirit shares: Numis Securities leisure analyst Douglas Jack has issued a ‘Buy’ note on Spirit shares, with a Target Price of 110p, ahead of interim results, due on Thursday 24 April. He said: “We are forecasting PBT to be up 9% to £21.9m, driven by 4.8% like-for-like sales growth in managed pubs and a 2.6% increase in leased like-for-like net income. Against soft, weather-affected comps, recent trading should be strong, resulting in the company moving even further ahead. Spirit’s ongoing operational outperformance against its national competitors should justify at least a sub-sector average EV/EBITDAR rating (10.9x), rather than the lowest rating (9.3x), in our view. We believe Spirit’s stronger EBITDA growth, net debt/EBITDA reduction and progressive dividend should now lead to another re-rating.”
Marston’s wins Newcastle new-build go-ahead: Marston’s has secured planning permission for a new-build pub on the former Newcastle College site next to Sainsbury’s in Liverpool Road, Newcastle. Sixteen residents living nearby sent letters of objection to Newcastle Borough Council raising concerns over parking and noise. But planning officers at the authority recommended the scheme for approval, saying residents’ concerns would be addressed, and that the development would create jobs on a currently vacant site. The council’s licensing sub-committee has already granted Marston’s a premises licence allowing the pub to serve alcohol until 1am on Fridays and Saturdays.
Antic London to open Galvaniser’s Union on Thursday: Antic London, the company led by Antony Thomas, is to open a new site called The Galvaniser’s Union in Bromley by Bow on Thursday (10 April). The pub occupies the site of the former Duke of Wellington pub at 2 Devas Street. Thomas told a local newspaper: “It will be a good old pub, what we think a pub should be – a safe comfortable space where people want to spend time and have drinks at a reasonable price.”
C&C Group adds Finnan to board: C&C Group has appointed Emer Finnan to its board of directors as an independent non-executive director with effect from 1 May 2014. Finnan is senior managing director of Kildare Partners, a private equity firm specialising in real estate investment in Western Europe and is responsible for investment origination for the Irish market. She has over 20 years of UK and Ireland investment banking and financial services experience. C&C Group chairman Sir Brian Stewart said: “Emer Finnan will bring valuable expertise to C&C. (The company) is committed to the continuing refreshment and renewal of its board in line with corporate governance best practice.”
Adam Hyman – La Bodega Negra founder to open juice bar: Restaurant consultant Adam Hyman has reported that La Bodega Negra founder Will Ricker is to launch a juice bar on Peter Street, Soho. He said: “Ricker has partnered with diet book author Joe Cross to launch the Juice Well, which opens on 19 May. They are planning more sites across the capital.”
Enterprise Inns launches new induction programme for regional managers: Enterprise has launched a new induction training programme for regional managers joining the company. The initial eight-week programme comprises of both face-to-face learning and mentoring sessions, plus a range of e-learning modules. After the first two months regional managers are then required to complete a series of courses covering topics such as building business, pub food development and marketing before the completion of the 34-week probationary period. Sarah Williams, learning and development manager at Enterprise, said: “The aim of the induction programme is to ensure all our regional managers are fully equipped to provide the highest standards of service to our publicans. As well as financial modules such as business planning, the regional manager induction also covers our Code of Practice and practical areas including licensing, property, gaming, retail standards and health and safety.” The new training programme has been completely rewritten to offer a more structured approach and includes a sign off test plus regular reviews and operational checklists which regional managers complete through a series of on the job assignments in the field. Enterprise employs 125 regional managers.
Co-op leases 54 former Marston’s pub sites: The Co-operative Group’s food division has boosted its growth plans after signing a property deal to lease 54 pub sites, which are to be converted into convenience stores. Its partner in the new venture is NewRiver Retail, a Real Estate Investment Trust (REIT), which recently acquired a group of 202 Marston’s pub. It is some of these sites which will be developed for Co-operative Food. The Co-operative will pay NewRiver up to £2.7m to develop the new stores, which will range in size from 3,000 sq ft to 4,500 sq ft, and will also pay rent on them. Steve Murrells, chief executive of The Co-operative’s retail division, said last month that the food business plans to open more than 100 new convenience stores this year. The new properties are located throughout the country but with a concentration in central, eastern and northern England. The majority will be new-build projects to be constructed on surplus land adjacent to the existing pubs. A smaller number of pubs will be either converted to convenience store use or redeveloped as standalone convenience retail stores, whilst some of the assets will be significantly expanded in size through the addition of an extension or new-build. The first of the new stores is expected to open early in 2015. The lease terms are 15 years with no break clause and an annual RPI-linked rental increase formula capped at 4% and collared at 1%. The rental income agreed varies between £15 per sq ft and £17.50 per sq ft. Allan Lockhart, property director at NewRiver Retail, said: “We are delighted to complete this unique and innovative leasing agreement less than five months since we acquired the (Marston’s) portfolio. NewRiver has efficiently delivered on its stated intention to identify viable demand from major food store operators to expand their convenience store portfolios. The agreement significantly develops the Co-operative Group’s UK footprint and we look forward to expanding our strong relationship with them in the future.” In November 2013 NewRiver announced a £90m acquisition of a portfolio of 202 pubs from Marston’s, with the primary intention of conversion of land and buildings to alternative use, notably convenience stores.
Cider makers predict export boom: Cider drinkers across the world will be enjoying an extra 704 million pints a year by 2018 as interest in the apple tipple explodes – offering massive export opportunities for British producers. Cider industry bosses made the prediction this week and are now travelling around the world promoting cider. Paul Bartlett, chair of the National Association of Cider Makers (NACM) was a keynote speaker at a sell-out conference in Chicago recently. He said: “The cider market both at home and abroad has grown dramatically over the last ten years, and over the next decade we will see another massive increase in the global consumption of cider. This is being fuelled by a number of factors. In some markets – such as the US – consumers are re-discovering cider. There is a growing appreciation from US consumers of cider and recognition that there is an authentic American cider heritage. British producers – such as Aspall, Thatchers and Westons – are driving this cider renaissance forward by investing in this market and expanding the export of their product. In other countries, an increase in the popularity of cider can be put down to the growth of fledgling cider makers, and the investment of UK producers to inform and educate consumers. British cider makers have led the way by demonstrating the positive impact which innovation and investment can have on the market, and cider makers in other countries are now following suit and grasping that opportunity.” The UK produces half the cider in the world – and experts predict the UK market alone will grow by 119 million pints a year by 2018.
Former Novus corporate sales manger joins London conference and events centre The Mermaid: Glenn Mainwaring has been hired as business development manager, responsible for overseeing financial growth and improving The Mermaid conference and event centre’s market position. Mainwaring was previously sales and marketing manager at Searcys at the Barbican, and corporate sales manager at bar and club operator Novus Leisure.
Biershenke takes 8,500 square foot site: An 8,500 square foot former cafe bar in the heart of London has been leased by the City of London Corporation to bierkellar operator Biershanke. The premises on Blomfield Street EC2, forming part of the London Wall Building and a short distance from Liverpool Street Station, traded most recently as a Henrys Cafe Bar. It closed in 2012 when the former tenants, TCG, exercised a break clause. The new lessee, Bierschenke, is looking to reopen the site as a German restaurant and bierkeller split over the ground floor and basement. The company recently sold its premises on the Strand, which had become too small for the burgeoning brand. Anthony Jenkins, associate director of Christie + Co, which acted on behalf of the City of London Corporation, said: “The City of London Corporation is pleased to have secured a tenant for this iconic building in the Square Mile, which will add value to the overall area and provide something different for the people working in the many offices and banks in the area. As to be expected, the site in this excellent location attracted huge interest and multiple bids from up-and-coming operators and brands in the licensed sector.” The new lease was granted for a period of 13 years.

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