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Mon 2nd Jun 2014 - Propel Monday News Briefing

Story of the Day:

JD Wetherspoon looks at four-strong Dublin portfolio: JD Wetherspoon is poised to buy four of Dublin’s most famous pubs, The Irish Independent has reported. The four pubs are part of the former Capital Bars Group, which entered a mixed examinership and receivership process back in 2009. They include The George and The Dragon, the Belle Epoque style super-pub Cafe en Seine, and the popular party and nightclub venue Howl at the Moon on Lower Mount Street. The entire portfolio is on the market for €12m but the pubs are also on sale individually. JD Wetherspoon, which will open its first pub in the Republic next month in Blackrock, Dublin, a €3m conversion of the former Tonic bar to The Three Tun Tavern, is actively looking in detail at the distressed disposal, the newspaper reported. The company wants to open 30 pubs in the Republic in the next few years. Pub property prices trade in Eire have fallen a long way from their height alongside other commercial property – many landmark pubs up for sale at prices up to 70% lower than during the boom. The George and The Dragon, both on South Great Georges Street, along with Cafe en Seine, are now on the market on the joint instructions of receiver Pearse Farrell of RSM Farrell Grant Sparks and O’Dwyers, for €3.5m each. Howl at the Moon has a guide price of €1.5m. Last month, Greene King ruled out opening in Eire – and motorway service stations.

Industry News: 

Young people pre-load out of ‘fear’ of nightclubs: Young people who “pre-load” on alcohol before going out to bars and clubs do so because they find such venues “scary”, according to researchers. A study found that 18-23 year olds drink significant quantities of alcohol at home before venturing out to venues in the evenings as they prefer the feeling of “control” when they drink in private with friends. Researchers at Plymouth University said the findings ran contrary to a popular understanding that young people “pre-drink” or “pre-load” in order to take advantage of cheaper alcohol at supermarkets and off-licences, as opposed to buying drinks in bars and clubs. Dr Adrian Barton, associate head of Plymouth University’s school of government, led the study, published in the current edition of journal Drugs and Alcohol Today. “In our minds, pre-loading is fast becoming a significant cultural shift in the consumption of alcohol in the UK,” Dr Barton said. “But policy-makers’ understanding of the practice is limited, meaning that alcohol policies locally and nationally are failing to reflect its significance. Beyond price, young people seemingly need alcohol to cope when going out and many of the young respondents prefer the comfort and safety drinking with people known to them brings,” Dr Barton added.
Internet guide Pub Rooms buys London Pub Hotel guide: Internet guide Pub Rooms has acquired the internet-based London Pub Hotel guide. Marketing director Peter Jones said: “The Pub Rooms internet guide has invested heavily over recent years to ensure its primary objective of being the best pubs guide for pubs with rooms is reached. Acquiring London Pubs Hotel will allow us to add more pubs to the London section of Pub Rooms.”
Lime Consultancy wins crowd-funding advice gong: Lime Consultancy has been named Acquisition International Magazine ‘Crowdfunding Specialist Adviser of The Year’ in its M&A awards 2014. Lime Consultancy owner Dave Farmer said: “For many commercial finance brokers, crowd-funding remains an occasional or unpreferred funding option. For us it is the cornerstone of small business finance and our clients love having it as an option.”
Starbucks customer orders most expensive drink ever served: A US Starbucks customer has ordered the most expensive drink the company has ever served – at the cost of $54.75 (£32.78). The unnamed customer who ordered the unusual creation in Dallas, Texas, got it for free. A Gold member of the Starbucks loyalty programme, the customer decided to take advantage of an offer that entitles him to one free drink for every 12 that he buys. He opted for a 128-ounce, 60-shot drink that took five days to finish.
Loungers founder Alex Reilley to headline Area summer lunch: Alex Reilley, managing director and co-founder of cafe bar concept Loungers, is to headline the Arena summer lunch in London. He will give an insight into the evolution and success of Loungers. He will also talk about the future plans for expansion and Loungers’ place in the varied and ever-growing casual dining market. Industry commentator Peter Martin will open the event with a specially-developed presentation offering a valuable and up-to-date understanding of the UK eating and drinking out market. Tickets cost £145+VAT for Arena members and £195+VAT for non-members. For further information and to book tickets visit or contact Lorraine Wood on / 07803 853 618.

Company News:

Tenanted pub company code of conduct to appear in Queen’s Speech: Sources suggest a tenanted pub company statutory code of conduct will be included in the Queen’s Speech of Wednesday. It is understood that the proposals will include an ombudsman-type figure to adjudicate on disputes between pub landlords and tenants. However, it is likely that the proposed legislation will stop short of introducing a mandatory free-of-tie option. Last month, CAMRA gave the government a petition signed by more than 42,000 people calling for reforms to the landlord and tenanted relationship to be pushed through. Greg Mulholland MP has also been applying pressure on the government to act. He said last month: “It’s critical the government announces it will be keeping its promise. It made a clear commitment and there’s no possible reason it can give for not doing so.”
Amber Taverns was sold in an off-market deal: Amber Taverns was sold to MXP Partners for £80m on Friday after an off-market approach, joint managing director James Baer has told Propel. Baer said: “There was no formal sale process – we had an off-market approach. I think the sale is a big positive for wet-led pubs – it’s good for the whole of the wet-led pub sector to see a deal like this go through.” The deal saw management roll-over the vast majority of its stake in the business – it now stands at between ten and 14% (the precise figure depends on the performance of the business going forward). The company’s current like-for-like sales are currently at between 1 and 2% and it expects to hit the 100 pub mark by the end of the current year. Its next opening is a pub in Ferryhill near Durham, which is described by Baer as a good example of the Amber Taverns business model. He said: “It’s an ex-Star Pubs & Bars site we have acquired for under £100,000. Investment is a big part of our success and we are spending £400,000 on the site, completely gutting it and creating an internal courtyard. It will be re-named The Demon Chapter.” Amber Taverns will aim to acquire between ten and 12 pubs a year. “Refurbishment costs have risen slightly as the construction industry has picked up but the property market itself in the regions is stable,” added Baer. 
Blanc, Goodman and Hopkins choose Shoreditch for fourth London Cocktail Club: JJ Goodman and James Hopkins, who won a business partnership on BBC2’s The Restaurant back in 2009 with Raymond Blanc, have chosen Shoreditch for their fourth London Cocktail Club. With Blanc as a business partner, Goodman and Hopkins, who opened their first bar on Goodge Street, report the new site bar will have “Motor City” theme – and will roll-out more of their popular blend of eclectic cocktail bar offering. The Shoreditch club will be at Unit 12, Avant Garde, Bethnal Green Road. They have taken a new 25-year lease on a 537 sq ft ground floor area and a 2,025 sq ft basement from landlord Bishopsgate Apartments. Agency director David Rawlinson said: “Shoreditch is an ideal location for JJ and James’ latest venture. Independent eateries, some of the best restaurants such as Conran’s Albion Café and some of the capital’s hottest bars and clubs, such as Beach Blanket Babyloon and Shoreditch House, mean this is now a nightspot to rival anywhere in London.” Said Blanc: “These two dynamic men have created the best cocktail bars in town. My favourite? It is the rose-petal Martini – one or maybe two and I am in heaven”. 
Mitchells & Butlers to open first of a brace of London All Bar Ones this month: Mitchells & Butlers will open the first of a pair of new All Bar Ones at Buckingham Gate, Victoria on Wednesday 11 June. The 380 square metre, 200-cover bar at the Land Securities office and retail space – 62 Buckingham Gate – will include covered terrace seating as well as a tasting and mixology table where customers can book cocktail masterclassses or enjoy a wine tasting. This will be closely followed by a 1,283 square metre All Bar One at The O2, set across three floors with 400 covers at the 02. The top floor, complete with a DJ booth and dancefloor will be available for private hire, pre-and post-events at The O2 and for corporate entertaining. Of the latter opening, Susan Chappell, All Bar One retail director, said: “The O2, complete with its state-of-the-art arena, exhibition space and cinema is one of the most attended and talked about venues in the world, so when a site became available we jumped at the opportunity. All Bar One at The O2 will be a prime location for our brand, not only in terms of its sheer size split over three floors, but what it serves to represent in terms of our latest offering.”
Nightclub abolishes admission charges and standardises prices: Scunthorpe’s biggest nightclub Henry’s is to abolish admission charges for the first time in its 27-year history. The free admission policy at the 1,160-capacity venue in Doncaster Road will take effect from 6 June. At the same time the price of all drinks will be standardised at £2. Henry’s will also trade from 11pm to 4am on Fridays and Saturdays. Director Simon Frankish said: “We decided the biggest barrier for people coming here was the admission charge. Consequently, we will become one of the first thoroughbred nightclubs in the UK to abolish admission charges permanently.”
Coaching inn operator reports strong May: Seven-strong coaching inn operator Bulldog Hotel Group, led by Kevin Charity, has reported like-for-like sales rose 18.15% in May following on from a 4.83% increase in April. A spokesman said: “The increase in May was driven by a capital investment in our site in Holmfirth plus the good weather – sunny days allow for the outside seating areas to come into play. However, this does follow a trend set last year. To the year ending 31 March 2014 turnover increased 37.75% with a like-for-like sales increase of 9.39%.” 
Luke Johnson – PizzaExpress has some issues: Sector investor Luke Johnson has argued, as part of a wide-ranging 6,000 word interview that will appear in this week’s summer edition of Propel Quarterly, that his former business, PizzaExpress, has some ‘issues’. He told Propel: “I would argue that they have some issues. One is they charge about £7.50 for a margherita, I think that is too much for what is not the best pizza on the high street anymore by any means. I would argue our pizza at Strada is better. I think there are an awful lot of new, independent pizza operators now making great pizza. For example, at Franco Manca, margherita costs about a fiver and it’s a much better pizza – so that’s one issue. They are being greedy. However, they discount massively so you get someone paying £7.50 for a margherita sitting next to someone paying half that, and I think that is storing up trouble. Secondly, they are acting as if they are still a growth business, when they have 400 sites now. They are portraying it as a business that can continue to expand ad nauseam in the UK, and I don’t think you can.” 
Mexican restaurant opens in Brakspear pub: A Mexican restaurant, Pachangas, has opened in the former Beer Tree pub in Henley, which is owned by Brakspear. The restaurant has three chefs from different regions of Mexico – Jalisco, Yucatan and Acapulco – who will cook a range of traditional and well-known dishes. Manager Carlos Tovar said: “We want people to try the real flavours of Mexico.” Tovar has been in the restaurant business for more than 22 years. He ran the Poco Loco in Bourne End for 12 years and then Pachangas in Marlow from 2003 until it closed in 2011. For the last two years he has worked in security for British Airways. Brakspear chief executive Tom Davies said: “Pachangas is a different business to our traditional pubs in Henley but it has the same ambition – to serve quality food and drink in a relaxed, friendly environment with great customer service.”
Four brands to open at Lakeside: Four brands are to open at Lakeside shopping centre’s £9 million food court revamp. They are: Five Guys, which opened its first UK restaurant in Covent Garden last July, Rhythm Kitchen, the West Indian restaurant opening its second UK outlet, Mexican restaurant Tortilla has applied to Thurrock Council for an alcohol licence, while chicken chain Nando’s looks set to open its third restaurant at the shopping centre.
JD Wetherspoon to open £3.45m Ilfracombe flagship – seven years after buying site: JD Wetherspoon is to open its flagship £3.45m futuristic site on Ilfracombe seafront tomorrow (3 June) seven years after buying the site. The Admiral Collingwood has been built on the site of the former Victorian Collingwood Hotel at the seafront and has created 74 new local jobs. There is a beer garden at ground level to the front of the building, where smoking will be permitted in a designated area, as well as a large roof terrace on the first floor. The company acquired the seafront site and its Victorian hotel in 2007, but the old Collingwood was gutted by fire and plans revised from a pub, restaurant and hotel to just pub and restaurant. The pub had been due to open on 23 May, but a crack in one of the glass panels on the iconic glass dome on top meant new glass had to be ordered from a company in Germany.
Premier Inn gets Felixstowe go-ahead: Investment in the regeneration of Felixstowe is set to continue with approval being granted for a new Premier Inn. The modern 60-bedroom hotel will replace one of the resort’s oldest, The Ordnance, which will be demolished to make way for the multi-million pound project. Premier Inn officials told Suffolk Coastal councillors that work could start this autumn, with the new hotel opening summer next year.
Seven-strong Indian chain sees Wembley branch closed down after cockroach infestation: An Indian restaurant chain has closed its Wembley branch after food inspectors discovered a cockroach infestation. ChennaiDosa, a restaurant chain specialising in south Indian foods, saw its branch in Wembley High Road issued with a “hygiene emergency prohibition order” last week. Food inspectors can only issue such an order if they deem the hygiene problems are such that they pose a risk to public health. A spokesman for Brent council said: “We closed down these premises because of a cockroach infestation last week and received a Hygiene Emergency Prohibition Order from the courts. I can confirm we have taken action against them in the past.” The restaurant brand has a total of seven branches across London, including another in Ealing Road, Wembley, and three in Newham. On its website, the chain states: “ChennaiDosa made an attempt to recreate the magic of South Indian cuisine in London and has been immensely successful since the opening of its first branch.”
Analyst gives lukewarm reception to McDonald’s refranchise and capital return plan: An analyst has given a lukewarm response to McDonald’s plan to refranchise 1,500 restaurants in the next three years and return $18 to $20bn to shareholders, a 50% and 20% increase on the past three years, respectively. “With McDonald’s previously noting ‘urgency’ around creating short-term shareholder value via optimisation of the capital, ownership and cost structure, investors’ ‘dream scenario’ had aggressive assumptions,” Jeffrey Bernstein, a director of Barclays Capital, wrote in a research note. “The updated return targets likely fell short of that scenario, more at the pace of McDonald’s.” 
Barworks staff to open East London Liquor site this Friday: A bar with its own distillery, producing gin, vodka and whisky on the premises, will open in the former Fat Cat Cafe Bar in Bow Wharf, East London on Friday (6 June). The site will be operated under the name East London Liquor Ltd. The bar will feature a distillery that will produce handcrafted spirits from two copper stills, 450 to 650 litres at a time. There will be two premium gins, a London dry gin, an artisanal vodka and a whisky that will be aged on site for at least three years – the minimum legal requirement. Alex Wolpert, the former operations manager at Barworks, who is behind the new venture in partnership with former Barworks colleagues, said: “We want to revive east London’s rich legacy of spirits manufacturing. The craft spirits trade went through a huge and successful resurgence in the US and now the UK is experiencing a similar renaissance, with several city distilleries popping up across the capital over the past ten years.”
Yendle family opens third Suffolk pub: The Yendle family, which transformed a Bury St Edmunds pub with a 1920’s train and travel theme, has given another West Suffolk pub a makeover from a bygone era – this time with an African twist. Together with owner Greene King, Corrine Yendle and her family have refurbished The Red Lodge Steakhouse & Bar to capture the age of explorer Dr Livingstone and feel of a rip-roaring 1920s African adventure. With a menu of exotic meats, visitors will be able to dine in the replica body of an aeroplane while crates that could have housed animals and features reminiscent of hunting lodges form part of the unusual decor. It follows a recent similar revamp of The Station, formerly The Linden Tree, in Bury, inspired by a round the world trip by Ms Yendle and her family. She said: “At the Station we have designed it to feel as if you are setting off on your travels, at the beginning of an adventure. The Red Lodge’s new look focuses on the journey and arriving at your destination.” The Yendle also runs The Littleport Steakhouse & Bar, in Littleport.
£70m portfolio of 21 Holiday inn sites met with great interest: A portfolio of 21 Holiday Inn hotels up for sale with agent Christie + Co already experiencing great interest. The hotels stretch from Washington, Tyne and Wear to Portsmouth in the south.  Offers in excess of £70 million are sought for the whole group, although offers for small groups or individual hotels will be considered – guide prices for individual hotels are being made available to serious potential bidders. Jeremy Jones, director of Corporate Hotels at Christie + Co, said: “Strong interest has already been shown in all the hotels, which are being offered free of management and with an interim Holiday Inn franchise agreement until the end of this year, and as such we have set a first round offer deadline of 11 June.” Offers for any, some or all the hotels, should be made by 12 noon on Wednesday 11 June.
Manchester building to be converted in boutique hotel: A Grade II listed building is to be transformed into luxury townhouse hotel in Manchester city centre. King Street Townhouse will have 40 bedrooms and suites, gym, restaurant, bar and wine cellars as well as a rooftop spa pool with city views, including the spires and clock tower of Manchester Town Hall. The building, which used to be a bank, dates back to 1872. The project is being run by Electric Hotels who currently operate four other hotels and have previously converted historic buildings. Eamonn O’loughlin, who runs Electric Hotels, said: “ We have worked closely with Manchester city council and our design team to create a luxury townhouse hotel within the King Street conservation area. We are very grateful to the city’s planning department for their support and guidance.”
Diageo airs views on Scottish independence issue: Diageo, the world’s biggest producer of Scotch whisky, has weighed into the debate on Scottish independence. Ivan Menezes, Diageo’s chief executive, said that although the decision was for “the people of Scotland to make,” it was “extremely important” for Diageo and the Scotch whisky industry to remain part of the European Union so it could benefit from “free-trade agreements around the world”. An independent Scotland’s immediate membership in the EU has been cast into doubt because it would require the approval of all existing member states, often a drawn-out process. In his first substantive statement on the future of Scotland, Menezes said possible changes to tax regulation and uncertainty over a future Scottish currency could be damaging for Scotch whisky distillers. “What we will fight for is keeping our industry competitive and thriving, and we’re very clear on what that requires,” Mr Menezes said in an interview with The Wall Street Journal. Diageo makes about a quarter of its £11.3 billion ($18.88 billion) in annual sales from Scotch.
Eataly Chicago engineers short-listed for award: The structural engineers who designed Eataly Chicago are finalists in an annual “Excellence in Structural Engineering” award presented by the Structural Engineers Association of Illinois. The two-story, 63,000 square foot emporium offers 23 dining options, including eight restaurants, a wine and cocktail bar, and a coffee bar. It is the largest of 17 Eataly locations in the world. Co-owned by celebrity chef Mario Batali, it opening on 2 December 2013, on East Ohio Street in space previously occupied by Texas de Brazil and ESPN Zone. Among the challenges for The Structural Group, based in Deerfield north of Chicago, was designing to support nine brewery tanks weighing 31,700 pounds, ovens weighing 40,000 pounds, and tons of meat, seafood, cheese, wine, and pasta in cases suspended from ceiling racks.
Molson Coors to invest a further £28m in its Burton brewery: Molson Coors UK is to invest a further £28m in its Burton Brewery taking its total to £75m and making it one of the biggest single capital investments in British Brewing for decades. The additional capital will be invested in brewing technology and infrastructure as part of the brewery’s five year redevelopment plan to support the production of 1.2 billion pints of beer, including brands such as Carling, Coors Light and Cobra. The announcement coincided with a visit to the brewery by Prime Minister David Cameron to view the brewery’s recently completed £21m bottling line. Cameron said: “Giving businesses the confidence to invest is a key part of our long term economic plan. Molson Coors’ commitment to spend £28 million on this innovative brewing technology demonstrates that this plan is working – encouraging business investment and giving hard-working people economic security for the future.” A new energy centre will be built as part of the redevelopment plans, helping the brewer to achieve its target of reducing energy use by 25% and cut greenhouse gases by 20% by 2020.
Restaurants and pubs invited to Join Mayor Boris Johnson’s waste scheme: Restaurants, pubs and hotels are being invited to save thousands of pounds and massively cut the amount of food they waste, under a free scheme supported by London Mayor Boris Johnson. The Food Save scheme has already helped 15 of the capital’s small food businesses save more than £100,000 a year and prevent 70 tonnes of food going to waste. One of the businesses, The Imperial, in south west London, is on track to save £10,000 and prevent almost one tonne of food waste a year by offering different portion sizes and using leftover food for their soup of the day and special menu items. Research by WRAP indicates that more than 1.3 billion meals are wasted annually in UK’s hospitality and food service sector. Food Save helps small businesses to stop throwing profits down the drain, with results from the first 15 businesses taking part showing average annual savings of over £6,000 in direct food costs and a reduction of 1.6 tonnes of actual food waste, equivalent to two dozen 180-litre bins. The Mayor’s Environment Adviser Matthew Pencharz said: “With Food Save cafes, pubs and restaurants are learning simple ways to reduce the amount of food they throw away and saving thousands of pounds in the process. The Mayor now wants hundreds more businesses to get on board this great free scheme and help us dramatically reduce food waste across the city.”
UK top 100 foodservice brands out-perform US counterparts: The UK’s top 100 pub, restaurant and foodservice brands out-performed their US equivalents in sales growth and unit number growth in 2013, a new report on the UK’s top 100 brands produced by insights and research firm Technomic has found. The UK’s top 100 brands saw sales growth of 6.4% in 2013 compared to 3.4% among the US top 500 brands. “In the US, we’re definitely seeing a maturing of the marketplace,” Technomic executive vice president Darren Tristano said. “By comparison, we’re seeing much stronger (growth) in the UK marketplace (among the leading UK brands).” Unit numbers among the top UK brands rose 4.1% compared to 2.1% among the US’s top 500 brands. Total sales among the top 100 UK brands grew to £15.5bn in 2013, which compares to a figure of £10.9bn in 2008. UK sales among the leading 100 brands are still dwarfed by the 500 leading brands in the US, which achieve total sales of $264.4bn. Total site numbers operated by the UK’s top 100 brands rose to 19,025 in 2013, which compares to 14,920 in 2008. The fastest growing segment in the full service menu category is Asian with 12.2% sales growth, followed by French (11.9%), Bar & Grill (8.4%), Italian (7.9%) and steak (6.9%). Overall, the full service category among the top 100 brands grew sales by 6.8%. The fastest growing full-service brands were Bill’s, Ed’s Easy Diner, Byron, Chimichanga and Loungers. “Bill’s proves an offer across the day-parts and is particularly popular with females,” said Tristano. Within the limited service menu category, patisserie was the fastest growing segment with 17% sales growth followed by coffee café (10.9%), Italian/pizza (8.2%) and sandwich (7.1%). Overall, the limited service menu category grew by 6.2%. The fastest-growing brands within the category were Papa John’s, Patisserie Valerie, Sayers, Costa Coffee and Itsu. The limited service burger category grew by a modest 1.6%. “The ability to grow is a struggle for some of the burger brands,” said Tristano. The fast casual category has produced a 12.6% Compound Annual Growth rate between 2008 and 2013, followed by the pub sector (10.6%), casual dining (7.4%) and quick service (5.3%). Technomic concluded that transparency is playing a more important role in consumers’ food purchasing decisions and UK menus show a battle between health and indulgence for customers’ attention. “One solution has been to give indulgent menu offerings a healthy makeover,” said Technomic vice president David Henkes. Technomic also noted an increased ranging of menu items across a broader range of price points. To obtain more information on the Technomic 100 Top UK brands report or to buy it, e-mail Technomic and Propel are holding a UK and US food and beverage menu trends conference on Tuesday 10 June in London. E-mail on for more details

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