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Thu 5th Jun 2014 - Propel Thursday News Briefing

Story of the Day:

Tragus landlords and creditors given 20 June deadline for vote on CVAs: Tragus has confirmed that it is to sell Strada and has launched a renegotiation of rents and debts with landlords and creditors through company voluntary arrangements (CVAs). All Strada restaurants and those under CVA proposals will continue operating as normal in the near-term. Subject to successful completion of the restructuring process, the company plans to open 12 Bella Italia sites in the next 12 months, with more than 50 openings expected over the next five years. Tragus’s chief executive, Steve Richards, said: “The core of our business is strong; we have a loyal customer base and valued brands. But some of these brands, such as Bella Italia and Cafe Rouge, require innovation and substantial investment to secure their futures. Similarly, Strada is a popular restaurant brand beloved by customers, but it needs separate attention and investment to realise its full potential. We hope that creditors will accept our proposals, which will provide us with the necessary financial strength to be able to access new market opportunities and resume growth and development in our core estate to the benefit of all of our stakeholders.” Detailed CVA proposal documents were made available to Tragus creditors yesterday, with a vote on the proposals due on 20 June.

Industry News:

BBPA – Government regulation of tenanted pub companies should not tamper with the tie: The British Beer and Pub Association has urged that the planned statutory regulation of tenanted pub companies should not interfere with beer tie. Chief executive Brigid Simmonds said: “It is important for the health of the pub industry that this legislation is implemented as currently proposed and calls for free-of-tie options remain unheeded. Proponents of legislating for landlords to be forced to offer a mandatory free-of-tie option fail to see that reducing the commercial buying power of the pub companies would destroy the model and threaten the closure of vast numbers of pubs throughout the country with thousands of vital jobs lost – as acknowledged by the government’s own economic analysis. Why would the pub company invest capital in a business if they did not know that at the end of five years they would still be making a reasonable return from their drinks tie? Regional breweries, often major local employers, would be under serious threat of closure without the guaranteed route to market via their tied pubs.”

Company News:

PizzaExpress – retail sales have hit £93m and we’re looking to expand the offer: PizzaExpress is looking to recruit a £50,000-a-year senior brand manger as it seeks to expand its £93m-a-year retail offer. The company said: “In 1989 PizzaExpress launched the first product into retail, our famous house dressing. Over the coming years we have added pizza, breads and pasta to the range. Now, 15 years later, we sell 27 different products through nine different grocery retailers. Last year at retail sales value we sold £93m of PizzaExpress products. We operate a successful royalty model working in close collaboration with our partners to ensure our offering in retail delivers the PizzaExpress experience at home. We have ambitious growth plans for our retail business over the coming years looking to further consolidate our strength in our existing categories and also to extend the PizzaExpress offering into new areas.”
New Giraffe/Restaurant Group brand opens at Heathrow: Wondertree, a new casual all-day dining concept, opened yesterday at Terminal 2 in Heathrow Airport. Wondertree is a collaboration between Russel Joffe, co-founder of Giraffe restaurants and the Restaurant Group. The largest restaurant in the new terminal, Wondertree occupies more than 5,000 sq ft, with 190 covers and has been designed to take advantage of the airfield view over the airport. Wondertree gives customers a choice of either self-service cafe with food to-go, or table service dining. Food will be cooked to order from an open plan kitchen. Passengers can order a coffee or beer through to a full family meal from a menu that includes flat breads, sandwiches, small and large plates, all-day breakfast dishes, smoothies, freshly-pressed juices and shakes. The quick-service cafe aims to serve all dishes within 15 minutes. Joffe said: “I’m hugely excited to be opening Wondertree, the terminal’s largest restaurant site. We aim to deliver on quality, efficiency and great value dishes in a unique environment morning, noon and night – we have achieved similar results with TRG before and hope Wondertree will share the same success as our airport Giraffe restaurants.”
Tesco seeks operator for London pub: Supermarket chain Tesco is still looking for a pub operator to take over the popular Catford Bridge Tavern in South East London. The pub, formerly run by the pub company Antic, has been listed by the local authority to stop plans to turn it into a supermarket. The award-winning pub was closed down at the end of last year and has remained boarded up. Meanwhile, Antic have opened a new venue just up the road, the Catford Constitutional Club. A spokeswoman for Tesco said: “We are still in the process of looking for tenants and remain committed to finding a pub operator to take the space. We will let the community know when we have more information.”
Panera Bread commits to ‘clean food’ policy: The American bakery chain Panera Bread has pledged to remove artificial additives and preservatives from its menu by the end of 2016. The company, with more than 1,800 units in the US , issued a comprehensive food policy that also called for making its menu more transparent in its ingredients and creating a positive impact on the food system. The company said it intends its food policy to be a roadmap for improvement and accountability. “Panera was founded on the belief that quick food could be quality food,” said Ron Shaich, Panera’s founder. The company said it was advocating “clean food” and was committed to serving foods without added monosodium glutamate (MSG) or artificial trans fats. Panera said the artificial additives it would remove include colours, sweeteners and preservatives.
Beds and Bars to open a cider bar in Covent Garden: The pan-European hostel provider Beds and Bars, led by Keith Knowles, is to open a cider bar, the Tree House, above its Belushi’s venue in Covent Garden, central London. The venue opens next Wednesday (11 June) and offers ciders served 100 ways, with draught and bottled ciders from across the globe. The venue will also cider-infused cocktails, and meat and cheese boards.
Heineken wins appeal over ‘misleading’ Kronenbourg ads: Heineken has won a rare victory for a well-known brand over a ruling by the Advertising Standards Authority (ASA) that two of its ads for Kronenbourg 1664 lager were misleading. The ads, one for TV and one in the press, both spoke about the French hops used in the beer, and although both ads carried lines saying “brewed in the UK”, both were ruled in February this year to be “misleading” by the ASA, which said consumers would believe the entire brewing and manufacturing process for Kronenbourg 1664 took place in France, not just that the hop is grown there. The ASA went on to tell Heineken not to emphasise a connection with France in future ads because the beer is brewed in the UK. Heineken appealed to the independent reviewer of adjudications, Sir Hayden Phillips, who referred the case back to the ASA Council, which on a second look said the focus of the ads was the French hops, rather than the brewing process and the ads were not in breach of the advertising code after all. According to Marketing Week magazine, successful appeals against ASA rulings are rare, and it is rarer still for well-known brands to win their cases. In 2013 the independent reviewer of ASA adjudications reviewed 64 cases, of which just five decisions were reversed, none understood to be high-profile advertisers.
Douglas Jack – we’d be buying Spirit shares as it is set to pick up 20 Orchid sites on reversion: Numis Securities’ leisure analyst Douglas Jack has issued a ‘Buy’ note, with a target price of 110p on Spirit shares ahead of the company’s third quarter trading update. He said: “We expect Spirit’s Q3 IMS, covering the 12 weeks to 24 May, to be strong aided by like-for-like sales growing 8.3% in March. As a result, full year forecasts (£57.6m PBT; consensus £56.2m) should be at least held, in our view. These assume 2.5% managed like-for-like sales and 0.4% leased like-for-like net income. Average cash returns have risen to 28% from 26%, aided by lower capex on Flaming Grill conversions, of which another 50 are expected by spring 2015. This process should be supplemented by Spirit gaining circa 20 trading sites (which are profitable overall) from Orchid. These sites should be rebranded as Flaming Grill and Fayre & Square and benefit from Spirit’s superior infrastructure and cost structure. Spirit’s trading should be ahead, allowing for tough comps in Q4. In our view, the 7.6.x EV/Ebitda rating does not properly reflect Spirit’s management and brand quality, earnings growth (13% in H1), progressive dividend (up 6% in H1) and de-gearing (to 4.4x net debt/Ebitda this year).”
Costa UK boss – good leadership the key to high street regeneration: Strong local leadership is crucial to successful town centre regeneration, a review of four “Portas pilot” towns led by the head of Costa UK, Jason Cotta, has found. The Future High Streets Forum published a report analysing what lay behind the successful reinvention of Bedminster, Dartford, Rotherham and Sydenham. The report sets out five steps that make up its “Great High Streets” model. These are: development of a shared local vision; creation of a strategy and plan; delivery of this plan; data gathering to review the strategy and plan; and the sharing of insights and learning from the data. Cotta said: “We know what makes a high street great and what can turn a poor one around – good leadership – so the forum has developed a way to galvanise local leaders around a coherent game plan.”
Restaurant Group launches new Frankie & Benny’s menu: The Restaurant Group’s Frankie & Benny’s brand will launch a new menu on Tuesday 10 June with more than 30 new dishes. The breakfast menu sees the introduction of a blueberry pancake stack and a smoked salmon bagel. New to the specials menu are chilli meatballs, the Italiano burger and the bourbon toffee pudding. There are four new speciality pizzas, including a flat iron steak pizza.
Fuller’s re-opens £3.4m Hammersmith pub after refurbishment, opens Heathrow airside pub: Fuller, Smith and Turner has re-opened its new pub, the Distillers in Hammersmith, West London, which was acquired in late 2013 for £3.4m. The pub, just a few hundred yards from the river, now offers dining and events space across two floors. It will also be hosting weekly entertainment events, including jam nights, live music, DJs and more. The upstairs bar will be serving classic cocktails Thursday to Saturday. In addition there will also be live music at weekends with a broad selection of craft beers. Meanwhile, the company has also opened its pub at Heathrow airport’s new Terminal Two, London’s Pride. Jonathon Swaine, managing director of Fuller’s Inns, said: “London’s Pride is in a league of its own and we are incredibly proud to have this as the latest addition to the Fuller’s estate. It is set to be one of our flagship pubs and it is very exciting to see Fuller’s on an international platform.”
Bierschenke opening day set: Bierschenke, which claims to be London’s biggest German restaurant, is reopening in its new home at 4 London Wall Buildings in the City, near Liverpool Street Station, on 12 June. The 8,500 sq ft premises traded most recently as a Henrys Cafe Bar, which closed in 2012. Bierschenke’s original home in Essex Street, Islington was bought by the City Pub Company in March and renamed Bier Palast.
Wetherspoon’s sixth Heathrow pub to feature an observation tower: JD Wetherspoon opened its new pub at Heathrow Airport yesterday with the creation of 50 new jobs. The company has spent £1.9m developing the outlet, at the new Terminal 2. The pub, which will be called the Flying Chariot, will be the company’s sixth pub at Heathrow. It takes its name from a comment in a book, written by Dr John Wilkins, rector of Cranford, the village at the east end of Heathrow Airport. He wrote in Discovery of a New World in the Moon, published in 1638, that it should be possible “to make a flying chariot, in which a man may sit, and give such motion unto it, as shall convey him through the air.” The new pub will be open from 4am until after the last departing flight, seven days a week. Food will be served throughout the day, until an hour before closing every day. The Flying Chariot will specialise in real ales, serving a wide range of beers, including those from local and regional brewers. It is on three floors, ground/concourse, mezzanine and tower, with a bar on both the ground and mezzanine levels. A heavy emphasis is being placed on the design, with the Heathrow control tower by Richard Rogers referenced, as well as a number of aerodynamic fluid forms, to give the pub the feel of aircraft and modern engineering. The tower can be accessed from the customer area and customers will be able to look out over the runway and boarding gates using fixed telescopes. The Flying Chariot will have an open kitchen, a dedicated deli and coffee area for fast fresh meals, a coffee lounge area, and table service in an area behind the bar. Photos and information boards relating to events, history and characters of the area will be displayed, as well as a moving mural on an 80-inch plasma screen, which shows “the Best of British”, and includes great British icons.
TLC Inns reports 9% like-for-like growth in May: The pub and restaurant operator TLC Inns has reported 9% like-for-like sales growth in May, with overall sales up 29%. The company opened its second Grand Central Bar and Grill in Ely, Cambridgeshire, which hit weekly sales of £33,000 over the second May Bank Holiday. The company, which is lining up a third Grand Central opening in East Anglia with a site in legals, also saw growth at its second site in Ely, The Cutter, an Enterprise Inns sites, which saw 15% like-for-like growth despite being located 100 metres away from the Grand Central venue.
Davy’s introduces free coffee for their Premier Cru Card holders: London wine bar and restaurant operator Davy’s have introduced complimentary coffee all day Monday in their wine bar and dining rooms for ‘Premier Cru’ card holders. The Premier Cru card assigns points on all wine bar purchases. The points can be redeemed online via its wine merchant for complimentary wine. Simon Gaske, head of sales and marketing, said: “It’s the most active database I have ever worked with. A general promotion can see over 10% of registered users redeem the offer, equating to 30% of our sales for the day.” Operations director Sarah Weir added: “As an extremely loyal group, we wanted to recognise (Premier Cru cardholders) further by extending rewards to our wine bars with free coffee with no hidden terms and conditions.”
Spirit’s Taylor Walker brand launches ‘History and Ale’ app for London sites: Spirit Pub Company’s Taylor Walker brand, which is more than 100 sites, has launched a ‘History & Ale’ trail app with six individual tours. Each tour takes the user on an immersive journey through some of the oldest pubs in London, while rewarding their progress with discounts to be used on food and drink – including each pub’s independently selected range of ales and local brews. For example, the ‘Famous Faces’ trail will take customers to the pub where Charles Darwin first conceived the theory of natural selection whilst the ‘Bright Lights’ trail explores pubs such as The Leicester Arms which was previously a children’s work house in the Victorian era and has underground tunnels to fellow Taylor Walker pub The Glassblower. Steve Worrall, brand director for Taylor Walker, said: “Many of our Taylor Walker pubs are famous for their rich history and are popular with visiting tourists looking to discover traditional British pubs. Our History and Ale Trail app combines the modern and the traditional to provide a tour experience that offers a truly authentic British pub experience, while also taking in the sights of the UK’s capital. With its ready-made themed trail routes, users simply have to pick their nearest trail and let the app take them on a journey through London.”
Brakspear reports 10% uplift in mystery customer scores: Pub operator and brewer Brakspear has moved into its fifth year of mystery visits with a 10% uplift in the average customer satisfaction score since the scheme’s launch in 2010. Mystery customers visit every Brakspear pub twice a year and answer more than 100 questions covering all aspects of hospitality from cleanliness and service to marketing and merchandising. The overall customer service score averaged over 80% – an increase of 1% on the previous year. Within each group, several licensees are achieving average scores in the high 90s. The top five performing pubs will be announced at the Brakspear Awards later in June and rewarded with a prize of up to £2,000 each. Brakspear chief executive Tom Davies said: “These results are positive proof of how regular, robust mystery visiting can benefit a pub business. In four years, our pubs’ average score has risen from 70+% to 80+%, a huge leap which will have turned customers’ experience from ‘satisfactory’ to ‘very good’. Importantly, when customers score a pub at 80% or higher, they are much more likely to return, or to recommend the pub to others.”
James Horler’s La Sala secures first site: La Sala, the Spanish restaurant chain hugely popular with celebrities holidaying on the Costa del Sol, has secured its first UK site. The first La Sala in the UK will be a prominent site in Chigwell, Essex, formerly occupied by The White Hart Inn. James Horler, chairman of La Sala UK, said: “I’m really excited about this opportunity, as La Sala is a totally different concept, and the right brand to bring to the UK at this time. The La Sala brand already has international recognition and we’re aiming to transfer this proven formula of atmosphere, quality, exceptional service and value to the UK.” After the huge success of its four Spanish sites, La Sala is aiming to transform the building in Chigwell to create a dining and entertainment experience with a menu based on its flagship restaurant in Marbella. The UK venture is backed by a host of big names from the world of football, including Alex Oxlade-Chamberlain and Stephen Carr. Horler, who made his name growing La Tasca restaurants from 16 venues to 74 before selling the chain for £135m in 2007, said: “I’ve already been out to Spain with our design team so that they can embrace the entire La Sala experience and recreate its unique essence here in the UK. We will be looking to roll out a second site within 12 months, with a third to follow, maybe in West London.” Horler is also currently chief executive of 3Sixty Restaurants and a non-executive director at Red Hot World Buffet, both of which are backed by Luke Johnson’s Risk Capital Partners. 
Enterprise inns lessees to open a micro-pub: Two ex-Enterprise inns lessees, Tansy Harrison and Graham Newbury, are to open a micro-pub in Newcastle under Lyme, Staffordshire. Newcastle Council has given planning consent to convert an old antiques shop on Bridge Street into the Bridge Street Alehouse, creating four jobs. The micro-pub, which will focus purely on beer and conversation, opens at the end of the month. The couple have been running the Red Lion, an Enterprise Inns-owned pub in Hartshill, Stoke on Trent for the past three years, and said they were delighted to strike out on their own. Harrison said: “It’s going to be really exciting to be a free house, and it’s nice to strip away everything and get back to the essentials.”
Nando’s lines up New Malden opening: Nando’s is eyeing an opening in New Maldon, Surrey. It hopes to open a restaurant at 197-199 High Street, on the site of a former bed shop. The restaurant would open from noon to 11pm, according to a noise survey submitted to Kingston Council on behalf of Nando’s. Planners have submitted an application to change the building from a retail site to a restaurant.
Admiral Taverns – tenanted companies have to win the right to work talented licensees: Admiral Taverns has welcomed the end of a prolonged period of uncertainty with the government’s plan to introduce statutory regulation. Strategy director Andy Clifford said: “Whilst we’re disappointed that the government has opted for legislation, we welcome the end of a prolonged period of uncertainty for licensees and pub groups. We look forward to working with industry and government to support the creation of this new legislation – and to moving on from more than a decade of debate on the relationships between licensees and pub groups. We believe that, increasingly, tenanted companies like Admiral must win the right to work with talented licensees by creating a culture of positive working relationships that genuinely deliver excellent service and tangible business support to the individuals who chose to run tenanted or leased pubs – this is what will drive industry standards beyond any legislation. It is a huge focus for Admiral, as borne out by recent independent industry research conducted by HIM, examining pub licensee experiences, which found that nearly eight out of ten Admiral licensees would recommend us to another publican. We believe this strong result is due to the fact that we do indeed work hard to support our licensees, and to build genuine and positive working relationships. As such, disputes between licensees and Admiral are very rare. We will, of course, continue to support the voluntary approach until this proposed legislation is enacted, and do all we can to ensure that the new statutory code does not negatively impact our licensees in any way.”
Punch Taverns launches industry-leading machine initiative: Punch Taverns has launched a new machine reporting suite for its partners to maximise their machine activity and income. Punch licensees can now access these reports through the Punch Buying Club website. Partners will be able to log in and view their machine history for their pub, to understand how much profit from machines they are making, as well as easily identify trends to maximise their machine profitability. The new feature will also be accessible to pub accountants where requested, and will also provide financial information relating to Machine Games Duty and VAT. Julie Clamp, machines development manager at Punch Taverns, said: “This industry-leading tool has been launched as a direct request from our partners. A number have found Machine Games Duty difficult to understand and account for and this fits within our strategy to provide greater, more personal support for our partners.”
Pizza Hut to roll out new ‘American-style’ diners across 60 outlets: More than 60 Pizza Huts outlets are being transformed with a new look and feel by the end of 2014, which will include new uniforms, a new menu, and Budweiser beer, ribs, chips, waffles and shakes made available for the first time. The first outlet with the new look is at the Intu Trafford Centre in Manchester, which is now open to customers after a £500,000 makeover. Pizza Hut’s operations director, Mike Spencer, told the Manchester Evening News that the major revamp is part of a £60m investment programme secured through private equity investment from Rutland Partners in late 2012. He said: “Trafford Centre is a flagship restaurant for us. That’s why this is a good place for us to start this new concept that will continue to be put in place across the region. In total we are investing about £1m in Manchester in the course of 2014 and in Urmston too. And in 2015 we have the likes of Oldham, Bolton, and Rochdale being refurbished in this new style. We will be investing around £2m in total in the Greater Manchester region over the next two years. That will lead to us creating at least 100 jobs.” Spencer said the company saw its direct competitors as Nando’s and Frankie & Benny’s. He said: “There has been longevity with Pizza Hut but we needed to go to the next stage because of how much competition has come to the market in the past six years. There is a new menu now, uniforms and new design will put the guest experience at the top of the menu. The design of the restaurant also reflects the American spirit, with a more open and inviting dining space.”
BrewDog trials letterpress studio for packaging: Scottish brewer and retailer BrewDog is considering a packaging change, and is currently in the process of working on trials using real wood-cut and metal letters. The company said: “First and foremost, what we do at BrewDog is about creating a craft product. We don’t cut corners. We don’t add anything artificial. We strip things back to the basics and we turn them into something awesome. And we think our packaging should reflect that. In an effort to ensure the look and feel outside our bottles matches the craft and passion inside them, we’ve started some experimental trials using real wood-cut and metal letters at one of the UK’s few remaining letterpress studios. No computers. No Photoshop. It’s time for our packaging to become as hand-crafted as our beer. Everything you see on these labels will be real. Real texture. Real ink. Real layers of colour. Hand-cut prints with character you can feel.”
Shepton Mallet Cider Mill unveils new table cider serve: The Shepton Mallet Cider Mill, part of C&C Group, has launched a new table serve, the Shepton Cider Hog, which it says is set “to transform the on-trade sharing experience for cider drinkers”. The Cider Hog, a four-legged three-litre container with a tap, “encourages sociability and allows the on-trade retailer the option of offering drinkers self-serve West Country cider at the table,” the company says. Shepton Mallet Cider Mill has developed a West Country still cider that is mean to be matched to table dispense. Somerset Snuffler (4.8% abv) is a medium-dry cider, with a bright, golden and fruity character.
Leeds social media agency wins three sector clients: The digital and social agency Engage Interactive has added a trio of sector companies just one month after announcing a record turnover of more than £1.2m in the latest financial year. The Leeds-based agency has won social media accounts for Taylors of Harrogate, Beefeater Grill and the tea brand Bubbleology. The Beefeater win comes after a long-term relationship with parent company Whitbread, and a highly successful Boss of Beef campaign in 2013, which introduced Beefeater Grill into social for the first time and grew “likes” to more than 150,000.
Itsu planning ten to 12 openings in 2014: The healthy eating brand Itsu, headed by Julian Metcalfe, is planning to open between ten and 12 new restaurants in 2014. Property director Tom Byng told Premier Construction: “We aim to open between ten and 12 sites this year, with as many as possible within the first six months of 2014. By June we aim to have half of the sites opened and operating well. We are satisfied that we are meeting the demand for our products and we conduct a great deal of analysis on where we see new opportunities. We are starting to look further afield, at cities around the UK which would work for us.”
New pizza concept Bite Me Pizza to open: A new pizza concept, Bite Me Pizza, is to open in Westbourne Grove, West London on 16 June. The concept starts with homemade dough and Italian tomato sauce made daily on the premises. Customers then add as many toppings as they fancy, mixing and matching. Prices therefore vary depending on the number of toppings added. A freshly made 12-inch classic margherita will cost just £6. The brand’s founder is Chris Manessis, a 22 year-old “eco-friendly pizza obsessive” who says he grew up in Geneva, Switzerland with a dream to become an entrepreneur while giving back to the environment.
Hannah Bass and Nathan Herrmann take senior food roles at Selfridges: Hannah Bass, who previously developed new concepts Jackson & Rye and Grillshack for Richard Caring, is to become Selfridges’ director of restaurants next month. Meanwhile, Nathan Herrmann, a former McKinsey consultant, will become Selfridge’s food and restaurants director, having previously been director of business planning at the retailer.
Byron Exeter to open mid-June: The latest outlet for the Byron gourmet burger chain is due to open in the middle of this month in the former La Tasca premises in Princesshay, Exeter. The restaurant, in Bedford Street, will have a yellow tiled open kitchen and bar, with neon signage, timber and concrete flooring, and a mixture of vintage and contemporary furniture and fittings. It will create 40 new jobs. Byron is now up to more than 40 outlets, seven years on from when founder Tom Byng opened his first restaurant on Kensington High Street in West London. The Exeter restaurant is more than 120 miles from the nearest other Byron outlet, in Oxford.

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