JD Wetherspoon’s Tim Martin claims pubs are “in trouble” if beer excise duty not reduced: Tim Martin, founder of JD Wetherspoon, has claimed that “the on-trade is in trouble if excise duty is not brought down to European levels”. His comments come as the British Beer and Pub Association’s (BBPA) Beer Barometer reports a huge six per cent drop in beer volumes in the first quarter of 2012 – while off-trade sales rose five per cent. Excise duty has seen a 42 per cent hike since March 2008. Martin told Morning Briefing: “The momentum against pubs is increasing. By and large there’s been an unstoppable tsunami heading in our direction with the increase in beer duty. You have to be really good at what you do to keep your head above water. (The pressure has) been slowly building up over 30 years. It started when VAT rose from eight per cent to 15 per cent in 1979. Pubs have gradually become more and more uncompetitive - supermarkets haven’t had to pay VAT on food. Currently, Osborne and Cameron bear the brunt of responsibility for the situation pubs are in. There were two stealth taxes in the most recent Budget - the late-night levy and machine duty. These two will cost Wetherspoon alone £4m while supermarkets had nothing more to pay.” Martin told Morning Briefing that he was thinking of producing a special publication that featured photographs of all the closed pubs in a particular northern city and then placing face pictures of the politicians responsible on the front – Tony Blair, Gordon Brown, Alastair Darling, David Cameron and George Osborne. Brigid Simmonds, chief executive of the BBPA, said: “These figures show the Chancellor was totally wrong to raise beer tax again in his Budget, as this discredited policy continues to hit pubs hard. This key British industry could be an engine of growth for the economy – but poor tax policy is damaging our potential.”

Horizons – innovation key to sector buoyancy: Innovation in the market, in terms of outlets and menus, is partly responsible for the sector’s buoyancy, along with the continued growth of coffee shops, managed food-led pubs and casual dining outlets. Horizons’ managing director Peter Backman told a breakfast briefing audience that while food and drink sales through the eating out sector had risen to a value of £42.8bn in 2011, there had been an actual decline when inflation was taken into account. “But there is now some excitement in the market and sales are likely to grow by at least one per cent over the next 18 months. By the end of this year they will return to 2006 levels, and by 2013 they will get back to 2008 levels. The signs are that things are beginning to level out – the population is growing, particularly amongst the restaurant-using over-40s, and employment is starting to rise. This is all good news for a sector that has performed better than the retail sector and emerged fairly unscathed from the downturn.” Peter Backman said that the biggest growth area would be seen in the casual dining sector, where average spend was between £10-£20. Currently worth some £1.9bn, casual dining is expected to grow by three per cent this year. “This sector offers what the customer wants, at a price they can afford, and continues to adapt and change its offer to keep customers interested.” Giving an overview of new eating out concepts, Horizons’ director of services Paul Backman identified that the most growth was evident in pub restaurants, healthy eating concepts, coffee shops, gourmet burger chains and Japanese quick service outlets.

Starbucks names China as number one opportunity: Starbucks chief executive Howard Shultz has said China is the company’s number one growth opportunity – he thinks it will be the company second-largest market by 2014. However, the company faces challenges, according to Reuters. Customers tend to stay for hours and hours and sometimes don’t even buy a drink. Starbucks has 570 stores in 48 cities. By 2015, it plans more than 1,500 stores in 70-plus cities. However, consumers in China drink an average of just three cups of coffee per year, according to an industry study. Total Starbucks sales are $358m but margins are 22 per cent because labour costs are much lower. 

Antic Pub Company to open Clapton Hart next month: Antic Pub Company, the London operator of 23 pubs, is to open its latest site, The Clapton Hart, on 10 May. The venue, on Lower Clapton Road, was previously called the White Hart. Antic spokeswoman Fi Collettt said: “We are really excited about this new project, the pub is such a great building and we are looking forward to returning it to its former glory. “I personally can't wait to get my hands on the back yard which we will convert into a spacious beer garden so that you have somewhere to sit and enjoy a drink in the sunshine this summer.”

Leon issues its own Premium Bonds: Leon, the healthy eating chain headed by Henry Dimbleby, has launched its own Premium Bonds, according to the Times. For an investment of £1,500, the bonds pay a coupon of eight per cent and offer discounts at sites. The marketing literature states: “It is very simple. You lend Leon the money and we give you the interest along with some edible and non-edible perks. We’d rather pay it to you than to the banks.”

Jamie Oliver to open first Union Jacks outside London next month: Chef Jamie Oliver will open the first Union Jacks pizza restaurant outside of London in Winchester, Hampshire, at the end of May. Oliver said: “It’s fantastic that our first Union Jacks outside of London will be in Winchester. “Union Jacks has really captured the imagination of people in Chiswick and central London and I hope the same will be true when we get to Winchester.” Oliver said he hoped to support Hampshire producers: “I hope we can get some local suppliers and even foragers to come to us.”

Tamara Beckwith invests in London pub: Tamara Beckwith has invested in The Imperial Arms on London’s King’s Road alongside her agent Ghislain Pascal and owners Iain and Amelia Heggie. The pub is selling street food from the popular collective Eat St. She told the London Evening Standard: “I don’t know if any of my friends drink pints — pints of vodka maybe, not pints of Foster’s.”

Greene King starts work on Corby new-build Hungry Horse: Suffolk brewer and retailer has started work on a new-build Hungry Horse in Corby. It’s being built on land near Aldi, off Rockingham Road. A Greene King spokesman said: “Hungry Horse is Greene King’s range of community pubs which provide good food, outstanding value and an inviting atmosphere for the whole family. We expect the build to be completed in approximately six months' time.”

Frankie’s Italian Bar & Grill opens in Wirral restaurant next week: Frankie’s Italian Bar & Grill, the concept owned by Marco Pierre White and Frankie Dettori, opens its doors next week in the former Kings Gap Court Hotel, Hoylake. The hotel, now rebranded as Holiday Inn Express Hoylake, is five minutes from the beach and close to Royal Liverpool Golf Club. White and Dettori operate two sites and franchised the concept in Dublin – the Wirral site is thought to be franchised.

Brunning & Price get new pub go-ahead at Chester racecourse: Brunning & Price, the gastro-chain owned by the Restaurant Group, has won backing from planning chiefs to open a new pub near Chester Racecourse. The proposal will see the former St Martins Lodge, which was last used as offices by Cheshire Constabulary until it was abandoned in 2003, torn down in part and rebuilt as part of a major transformation. Resident Iain Lough said: “Brunning and Price has a good reputation for restoring and landscaping properties and in providing food-led pubs of a good quality, along the lines of The Grosvenor Arms and Pant-yr-Ochain. They ought to be a good custodian of a prime Chester site that is becoming more derelict by the day.” Brunning & Price operates 16 pub in the north-west.

Fierce Leisure opens third Hanley site: Fierce Leisure has opened its third venue in Hanley - a venue in Foundry Street, which has previously been called Zenn and Logic. The nightclub has been renamed Foxy’s and will feature the drag artist Miss Foxy Divine every Friday, Saturday, Sunday and Monday. Its other venues are Fierce Music Bar in Goodson Street and Project, the former Yates’s, in Brockley Square.

Orchid Pub Company appoints energy manager: Managed company Orchid has appointed Paul Hill as its energy manager. In the last six months the group’s carbon footprint has been reduced by more than six per cent and pubs are now using smart meters to keep an eye on their energy use and bills. A staggering 21,000 energy-saving bulbs have been bought in the last year to replace traditional filament lighting, saving over two million KW of electricity and circa 1000 tonnes in CO2 emissions.

Greggs to pump out smell of bacon rolls and fresh coffee at “smelly” bus stops: Greggs has launched a £1m marketing campaign to promote its breakfast products and Fairtrade coffee. It features Professor Gregg T Bud, a new ‘tastebudologist’ character who will feature heavily on a specially created microsite and in a series of online videos exploring food tastes. The bakery chain will also be rolling out sensory advertising boards at bus stops in London, Manchester and Glasgow. These ‘smelly bus stops’ will waft the scent of a bacon roll and fresh coffee. Seven shops across the country will also receive a full makeover to become Greggs ‘Taste Rescue Centres’.

Heineken unveils nightclub concept at Milan Design Show: Heineken has unveiled a concept nightclub at the Milan Design Show, the result of a year-log collaborative exercise. Six key areas that combine to set the right mood and energy for an enjoyable nightlife journey are at the heart of the design solutions presented in the concept club.

Brain freeze hits Propel: Momo Leisure operates Jongleurs comedy clubs, not Walkabout as suggested in yesterday’s Briefing. Walkabout is operated by Intertain, headed by John Leslie. 

Getting a business partnership right by Paul Charity: The partnership between a brand or property owner and a dynamic, motivated site operator can be a powerful thing. Look at Domino’s Pizza in the UK where motivated franchisees earn more than £100,000 per site and the company is set to reduce its capital expenditure from just £5.8m this year to an even more negligible £3m by 2015. Franchisees keen to expand in the UK (and also in Germany where Domino’s UK holds the master franchise rights) are taking up the capital expenditure slack and very happy to do so. Meanwhile, analysts are forecasting Domino’s will have around £250m of free cash flow over the next five years, with circa £82m returned to shareholders via dividends or share buybacks. This happiest of marriages rides on the back of the relative lack of pizza delivery competition in the UK market. Chief executive Lance Batchelor reports that the company’s most popular pizza, the Pepperoni Passion, has an average sale price of £10.50 after discounts. Over in the US, Papa John’s is regarded as having a slightly risky strategy in holding an equivalent product at around £8, a fair bit higher than competitors. But for now, Domino’s Pizza UK seems to have forged a pretty much perfect union between brand owner and dynamic, devolved site management. Over in the US, the dial is being re-set. There’s been a strong current towards devolvement as a way of creating more profit. One of the key strategies at Burger King is to follow in the footsteps of McDonald’s and Subway and unload as many directly managed units as possible to franchisees. Burger King sold 278 company-owned sites to franchisee Carrols Restaurant Group at the end of last month. The deal saw sites sold for around £40,000 on the basis that Carrols pledged to upgrade 450 sites to the next generation Burger King fit-out. In other words, the capex requirement passes to Carrols. The deal showed the varied and imaginative way in which these sorts of deals can be sliced and diced because Burger King also took a 28.9 per cent equity stake in Carrols to enjoy some of the upside. Back in the UK, the direction of travel for swathes of the tenanted sector is about re-balancing control and dynamism from a different status quo. None of the brand owners mentioned above could be accused of lacking operational control (operating manuals are thick as the Yellow Pages) or retail input. For tenanted operators, the challenge is been about exerting far more retail influence and imposing operational disciplines. This week, Spirit became just the latest company to indicate that it wants to leverage its managed skills to create a better-performing leased division. It makes no sense to own vast amounts of freehold property – and not be doing your utmost to ensure the best returns. Even, a traditionally non-interventionist company like Enterprise Inns has decided the time has come to enter the trenches to create a different future at struggling pubs. These things can be cyclical of course. It wasn’t so many years ago that Charles Wells and Batemans were getting rid of their managed operations. Now the former is trialing franchised while the latter has re-embarked on a small-scale managed operation. This is a journey that’s really only just begin in the tenanted sector - and has a heck of long way to travel this time around, producing many more and varied iterations. 

How I would turn a pub around by Ann Elliott: I know I keep talking about our two village pubs but that’s because to me, they represent everything that’s great about the local pub. One, The Crown, is a free house, has been in the same hands for years and has built up a solid following in the village even though its tiny with no room to swing the proverbial. They are participating heavily in the Diamond Jubilee celebrations, run local teams, serve great food and are central to the village with direct access to the village green - a slightly inflated term for the patch of land just off the high street. The second pub, The Swan, is a Charles Wells tenancy and whilst it had the same landlady for years, it’s seen three changes of tenant in the last 12 months or so. Its very difficult to see how The Swan can find a niche and be commercially successful in such a small village with one successful pub (considering its size) there already. As I was running this morning in preparation for the London marathon this Sunday I was wondering what I would do if I was the new tenant in The Swan. How would I make a difference? It must be a problem for thousands of licensees every year when they take over a new pub and wonder how they are going to make it a success. Firstly, I would have a drink with the licensees at The Crown and discuss together the best way to co-exist rather than compete. It would be beneficial to work out which nights and events each of us should promote, which teams we want to encourage, what beers we are going to serve and what food each of us might specialise in. The last thing I would want to do is to compete directly, antogonise the landlord and alienate a small customer base so they feel as if they have to be loyal to one pub and one pub only. I would then visit every single house in the village with a ‘come and see us’ message with offers against different dayparts to attract a broad spectrum of customers on a range of dayparts. That way I would appreciate the layout of the village (and know who lives where) and the villagers would get to know me. Chances are I could then recognise some, if not all of them, when they come into the pub. The local press and free newspapers would be my next port of call to help my understanding of stories their editors think would be of interest to their readers. It would also help to know local clubs and societies that I could approach about events, group bookings and parties - getting involved in as many as I can would be useful to build crucial local bonds. I would also call on every local hotel, guest house and B&B to ensure that, if they are ever asked to recommend a local pub, they recommend The Swan. The church and local undertaker should also be on my list – being involved in the church has often proved invaluable in building links with key village opinion formers. Building a local email database would be paramount so I could regularly communicate what’s going on via email and twitter. Sorting out a Facebook page too would be vital so my customers feel part of an involved and active pub community - not just a virtual one but a real one. What else? Well I would smile whenever anyone came through my door and make sure my team do, too. That’s why the previous two landlords failed.

The key drivers of restaurant success by Kevin Higar: Every day thousands of restaurant operators ponder the best way to drive traffic and sales. Could it be the true answer to achieving this success lies in accepting a chicken as your role model? In my new new book “Always Let The Chicken Lead”, I suggest that’s exactly what the successful concepts I’ve witnessed do, whether they realize it or not. Each year, I travel around the United States and abroad, strategically dissecting the winning and losing game plans of hundreds of restaurants. What I’ve found is that while every winning restaurant has its own unique dynamics, as a whole they also possess a set of seven core common success elements referred to in my book as NOWs, or Nuggets of (Restaurant) Wisdom. While all seven NOWs are essential for enduring restaurant success, one in particular forms the foundation upon which the others are built. Enter the unlikely connection between rotisserie chicken and something I call consumer Purchase Decision DNA. Simply put, how each person subconsciously determines what is really appropriate for them is a product of their cumulative life experiences. These experiences create each person’s Purchase Decision DNA. When people make decisions inconsistent with their Purchase Decision DNA, it creates a subconscious condition known as perceived discomfort. No one is a fan of perceived discomfort, and ultimately they look for some way to eliminate or reduce it. What is the restaurant implication? In the long run, restaurants aren’t going to fundamentally change consumers’ Purchase Decision DNA. When concepts create a message or product that leads consumers to ignore their Purchase Decision DNA, it’s typically going to be a short-term proposition best described as a fad. People who have spent their hard-earned money on a fad typically don’t feel it was a wise investment when viewed through the eyes of time. This ultimately leads to perceived discomfort. The response? Customers will seek to minimize the source of this condition. In order to return to a balanced state, they will reduce or eliminate purchases from the restaurant that created the perceived undesirable condition. So what does this have to do with agreeing to accept a chicken as your role model? Ask yourself this question. Why do people so often choose a rotisserie chicken when they make their first prepared meal purchase from a grocery store? Answer: It creates a strong sense of Perceived Value, which is viewed favorably by consumers’ Purchase Decision DNA. It offers a solid, predictable flavor profile, the ability to feed an entire family, enough different parts that pretty much everyone will find a piece they enjoy eating, and it’s adaptable (what may be a drumstick tonight could be chicken tacos or chicken soup tomorrow). It’s the perfect co-star. It doesn’t look to butt heads with or attempt to fundamentally change anyone’s Purchase Decision DNA. Instead, it seeks to play the supporting role, creating positive reinforcement. The successful restaurants I have observed do exactly the same thing. They consistently offer customers product and service elements that reinforce their personal Purchase Decision DNA. Every customer touchpoint the restaurant offers as part of its total dining experience supports the true stars of each dining occasion movie: the customers and their built-in Purchase Decision DNA.

Kevin Higar is a director of Chicago-based research firm Technomic. His book “Always Let The Chicken Lead” analyses all seven Nuggets of Wisdom (NOWs) that successful restaurants exhibit. The book can be ordered at www.alwaysletthechickenlead.com or by contacting Kevin Higar at kevin@alwaysletthechickenlead.com.