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Morning Briefing for pub, restaurant and food wervice operators

Fri 21st Sep 2012 - Young’s, Costa and Inventive

Story of the day:

Horizons – lunch sales set to outperform the sector: The UK’s lunch market looks set to grow over the next 12 months as consumers increasingly eat out wherever they are, expect a wide choice of eating out options but often want something quick, cheap and easy-to-eat. Emma Read, director of marketing and business development with foodservice analyst Horizons, predicts that the lunch market, already worth £14.9bn, will occupy a growing share of overall foodservice sales. Speaking at yesterday’s Lunch! trade show at London’s Business Design Centre, Read said: “Britain’s lunch market is worth £14.9bn, that’s 35 per cent of the total foodservice market. Growth over the past few years has outperformed what is essentially a flat market overall. Lunch business has risen by 3.3 per cent on 2009 figures. We expect this growth to continue and expect the lunch market to account for closer to 36 per cent of the total foodservice sector by 2014.” Previous Horizons research has shown that the eating out habit is here to stay, with the average British adult eating out 1.4 times per week in 2012, a rise from once a week in 2011. Consumers continued to eat out despite the onset of the economic downturn in 2008, but opted to spend less and order differently. Average spend dropped in 2012 to £12.30 (including drinks) from £12.69 in 2011. However, while many top-end restaurants have seen lunchtime trade suffer, business through quick service and casual dining restaurants has remained relatively strong as consumers down-trade, preferring something fast to eat-in or takeaway, rather than a more formal sit-down meal. “Driving the lunch market is the fact that time-pressed consumers no longer make their own lunch, preferring quick options wherever they are. They are also prompted to eat out by money-off vouchers and meal deals, many of which are predominantly lunch-based. Work pressure also means that consumers are more likely to opt for a takeaway to eat at their desk,” added Read.

Did you know that Novus has a similar turnover to Wagamama despite having 30 fewer sites? The Propel Info Hospitality Sector Turnover and Profits Blue Book ranks the 200 leading pub, restaurant and foodservice companies in the UK by turnover and profit, provides a five-year overview of performance and lists directors’ salaries. To buy a copy e-mail Jo Charity or Sharon Dickinson on jo.charity@propelinfo.com or sharon.dickinson@propelinfo.com

Industry news:

Molson Coors – 700 Scottish pubs have closed in the recession: A study commissioned by Molson Coors has found 703 Scottish pubs have closed in the past five years. However, Scots are still more likely to head for the pub than a social club or community centre, with almost a third popping into their local at least twice a month. The research has also found that four in ten men believe it is important to have a pub within walking distance of home. Molson Coors is now calling for action to end damaging tax rises on beer, ease the burden of business rates and simplify the process of applying for a licence. Phil Whitehead, managing director of Molson Coors Scotland, said: “Local pubs have long been a cornerstone of Scottish communities and provide people with a great place to meet and socialise. “It’s fantastic to see that the public recognise the key role played by their ‘local’ in the community. This support and seeing more younger people and women visiting pubs will help pull them through times that are challenging for all businesses.”

Technomic – consumers looking for flavoursome sauces: Research company Technomic has reported that sauces present a strong platform for flavour innovation, with consumers looking for a good variety of sauces when they dine out. Half of UK consumers polled by Technomic for its UK Flavour Consumer Trend Report revealed that they want a wide variety of dipping sauces to be available at a restaurant, and 49 per cent said that they like to see a mix of both familiar and unique sauces and condiments on the menu. Particularly on-trend is harissa, a complex Moroccan/Tunisian hot pepper sauce. Some independent restaurants and full-service chains are already on board with this exotic sauce, including: Browns Bar & Brasserie, which features harissa houmous on its vegetarian platter and FishWorks, which serves a roast chicken main course with harissa and rocket. E-mail David Wilkinson on dwilkinson@technomic.com to buy a copy of the report or ring him on 0771 5291530.

Second “prison restaurant” opens: A new 96-cover restaurant open to the public has been unveiled next to a Welsh prison – the food is cooked by low risk Category D prisoners. The Clink Cymru, next to Cardiff Prison, is a new scheme aiming to offer diners haute cuisine at reasonable prices while teaching inmates new skills. Welsh-born Michelin star-winning chef Stephen Terry has been appointed chef ambassador of The Clink Cymru. The restaurant has been designed to look like a high-end restaurant using lighting, furniture and finishing touches that have been created by prisoners from across the UK. UK prisons minister Jeremy Wright opened the restaurant. He said: “Each year we hope to release 50 well trained and highly qualified graduates into employment within the hospitality and farming industry.” The concept was devised by award-winning chef Alberto Crisci, who set up a similar restaurant at High Down prison in Surrey in 2009. The charity said fewer than 30 per cent of those participating in the scheme had found themselves back behind bars, compared with the UK average reoffending rate of 61 per cent.

Five Guys Burgers and Fries named US favourite burger brand: Five Guys Burgers has been named as the US’s favoutite burger brand in a survey of 7,600 customers by Market Force Information. Californian brand In-N-Out Burger, came second with Fuddruckers, A&W and Smashburger making up the rest of the five.

Marketers next in importance to chief executives: A leading web technology company boss, Marc Benioff of Salesforce, has told Marketing Week that directors of marketing are now the second most important executive in any company behind the chief executive. Benioff said marketers’ increased influence over chief finance, operations and information officers has come as a result of the shift from purely using traditional offline media to adopting new technology.

Low alcohol wine sales boom: Sales of low alcohol wine are booming with two million jump in bottles sold last year to seven million. The lower alcohol wine, with alcohol content below 8.5 per cent, is being bought by health-conscious consumers who are also looking to spend less, according to research by Mintel – the average bottle of low alcohol wine costs £3.27 compared with £4.95 for higher strength wine. The wine is also popular with younger drinkers aged 18 to 24. Noel Reid, wine and spirits buyer at family brewer Frederic Robinson, told The Daily Telegraph that low alcohol wines tend to be high in sugar. He said: “Unfortunately, this almost puts them in the alcopops sector rather than the wine sector.”

Northern Ireland bans “all-you-can-drink” offers: Northern Ireland has banned controversial all-you-can-drink offers. The decision follows a public consultation which showed support for the move. The ban is expected to come into force in January 2013 and will outlaw promotions such as “all you can drink for £20”. Colin Neill, chief executive of Pubs of Ulster, said: “Pubs of Ulster welcomes the announcement to ban ‘all you can drink’ promotions as it marks another significant step forward in bringing an end to irresponsible practices within the industry. Whilst ‘all you can drink’ promotions are rare and the majority of licensees continually demonstrate best practice in this area, we do recognise that there are some premises that choose to offer such promotions.”

Marks and Spencer ups the ante on meal deal: Marks & Spencer has launched a national newspaper advertising campaign offering customers a cut-price deal on fish ‘n’ chips. The company has begun offering fish ‘n’ chips takeaway – with a choice of cod or haddock plus two side dishes for two – for £5. 

Company news:

More board changes at Mitchells & Butlers (and a stand-in): Doug Evans is to step down as a non-executive director at Mitchells & Butlers Annual General Meeting on 31 January 2013. He is leaving the business to join Hays as company secretary & general counsel in February 2013. Executive chairman Bob Ivell said: “I would like to thank Doug for his important contribution to the Board and wish him every success in his new role.” Mitchells & Butlers has also announced that Doug McMahon has appointed Richard McGuire as his alternate, acting as a nominated shareholder representative of Joe Lewis’s Piedmont, with effect from 1 October 2012. Doug McMahon is based in the US and is not able to attend every board meeting in person. Richard McGuire will attend those board meetings where Doug McMahon is unable to attend in person. Richard McGuire is currently managing director of Tavistock Europe and is a non-executive director of Timeweave and DCD Media.  He was previously a non-executive director of the company and Bulgarian Property Developments.

Prime Covent Garden site on the market: The 4,500 square foot Walkabout site operated by Intertain in Covent Garden, which has entrances on both Henrietta Street and Maiden Lane, is on the market through agent Davis Coffer Lyons. The venue is available to let from this month onwards and has a passing rent of £400,000 although the lease will be structured with some turnover element. Rates payable are £124,880 per annum. An Intertain spokesman said: “We surrendered the lease voluntarily earlier this year in return for a very significant premium in our favour. We have been trading on a short term lease since then on a minimal rent and expect to vacate early next year. We have used the proceeds to help finance the refurbishment programme on our larger venues. Covent Garden is a very small site and we took the view that it does not really fit the mould now.”

Whiting & Hammond boss sounds chefs shortage warning: Brian Whiting, a former Savoy chef who runs highly rated south east gastro operator Whiting & Hammond, has sounded a warning about the shortage of chefs in the industry. Whiting’s company helps run a £70m catering college in Kent. Writing in Propel’s Friday Opinion, he states: “The drop-out rate for students starting in September is as high as 50 per cent by Christmas. When I went to catering college there was one place for every three students that applied. What has happened? Clearly, young people are not being wowed into our industry like I was.” (See separate Friday Opinion e-mail for the full article.)

Innventure chief executive issues service reminder: Chris Gerard, who rolled out the Vintage Inns brand whilst working at Mitchells & Butlers and now runs the award-winning Innventure, has argued that maintaining service standards renders wide economic trends largely unimportant, especially for those lucky enough to be trading in the south east. Writing for Propel’s Friday Opinion, he writes: “Companies that treat their customers as Gods will prosper.” (See separate Friday Opinion e-mail for the full article.)

Hakkasan founder and Franco Manca buys shares in Pepper Tree: Sami Wasif, co-founder of Michelin-starred Hakkasan, Franco Manca, and creator of Eco Restaurants, has acquired shares in the renowned local Thai restaurant, Pepper Tree, in Clapham in a deal brokered by Davis Coffer Lyons. Restaurateur and investor Sami Wasif is also considering rolling out the Pepper Tree brand, which is famously Rick Stein’s favourite spot for Pad Thai, after the founder Martin Burrell decided to retire after running the restaurant for 15 years. The restaurant is located on Clapham Common Southside, close to Clapham Common tube. Davis Coffer Lyons acted on behalf of Martin Burrell.

Oak Taverns to open pop-up pub preview: Oak Taverns, the multiple headed by Simon Collinson that operates 25 pubs, is to open a pop-up pub at its first Punch Taverns pub, The Black Horse in Barnet, which will run as a brew-pub. The company will operate a three-day pop-up showcasing plan for the venue, which will open in mid-November. The pub, described as a classic Victorian pub in Barnet’s golden triangle, is to receive a £350,000 investment from Punch Taverns. Oak Taverns already operates two brew-pubs in its subsidiary Ridgeway Pub Company - The Swan Inn at Faringdon and The Cross Key at Thame. Director Simon Collinson told Morning Briefing: “We will have some of London’s and Hertfordshire’s best cask ales on and Budvar on Draught. We also have our new burgers being cooked on the BBQ. We open between 5pm and 11pm today and Saturday and Sunday all day as long as stocks last.”

Richoux Group appoints Edward Standring as managing director: Richoux has appointed Edward Standring, 40, as its managing director, working alongside Salvatore Diliberto, the company’s chief executive. Standring is currently a director of Relish Restaurants and Café Pasta and has previously held management roles with Ask Restaurants Limited and Spirit Group. Standring has been granted 500,000 options over ordinary shares in the company at a price of 9.025p.

Swindon couple plan “book exchange” pub: Swindon couple Jason Putt and Karen Griesel will re-open a former sex shop in Swindon’s Devizes Road next month as a new-style local pub with real ale and a book exchange service. The Hop Inn is to be marketed as a pub for grown-ups and will specialise in beers, ciders and craft brews not on sale in the immediate area. Putt said: “We want to be a community pub and one of the things we are going to have here is a book exchange. We want the pub to be a social centre, which pubs don’t lend themselves to any more.”

Chicago-inspired coffee shop selling comics opens: A new coffee shop selling comics has opened in Dalton inspired by Chicago comic shop Quimby’s. Eggs Milk Butter has been opened by Jessica Penfold, a long-standing comic fan. She said: “I always felt really uncomfortable in comic shops – it wasn’t welcoming. You had to know what you were looking for, grab it, and go. They’d correct your pronunciation. I realised that the old way of selling comics didn’t have to be that way.” Business partner Milo Mckeand added: “We just wanted to make a space for people who like comic books and coffee to have a really nice time.”

Inventive Leisure to open largest Revolucion de Cuba yet next month: Revolution vodka bar operator Inventive Leisure will open its largest yet rum brand extension, Revolucion de Cuba, next month. The company is undertaking a £1.4m refurbishment of the former Square Bar in Peter Street. The flagship two storey site is the fourth standalone Revolucion De Cuba venue to open in the UK since the first bar opened in Sheffield last year. The Manchester venue will also see the launch of Revolucion De Cuba’s first ever Rare Rum Store in its basement.

Stonegate walks away from Bath site: Managed operator Stonegate has been unable to strike a deal with a local authority to renew the lease on The Beau Nash in Bath. The Beau Nash, previously The Litten Tree, is housed in a former bank, which is ultimately owned by Bath and North East Somerset (B&NES) Council. It is understood that the local authority wanted to double the rent on the site. A spokesman for B&NES said the offer made by Stonegate was not in line with what the council expected in the open market. Meanwhile, Stonegate will re-open its Slug and Lettuce site in the city on 28 September after a £250,000 refurbishment. 

Young’s seeks head chef for innovative new pub: London operator Young’s is seeking a head chef on a salary of £28,000 for its new and innovative King’s Head opening in Roehampton, London later this month. The £1.45m premium destination pub will use farm-specific cuts and innovative products. Young’s states: “There is currently limited competition in the area so we believe The Kings Head is going to make a massive impact - the nearest pubs of interest are in East Sheen and Putney. The pub is going to be famous for its seasonal food, great hospitality and service, with award winning beers and wines to ensure all discerning residents and visitors to the area have a local pub to be proud of.”

Daily Telegraph pans Gregg’s Table: The Daily Telegraph has slated Gregg’s Table, the restaurant operated by Masterchef judge Greg Wallace. Critic Matthew Norman wrote: “When Gregg’s Table opened early this year, I noted some hideous reviews, and gave it a wide berth: not out of fastidiousness, but simple charity. Setting up a restaurant is a devil of a job, and the kindly critic allows time for any teething troubles to be resolved. Six months later, having replaced both chef and menu, it seems that Mr Wallace models his approach to filling the mouths of his clients on Laurence Olivier’s dentist in Marathon Man. I wouldn’t say that Gregg’s Table is abysmal, but I’ve had more pleasure from root canal work.”

Cova takes second site: London operator Peter Cova, owner of The Crown pub in Twickenham, has acquired the former Sammy’s American Bar and Grill at 172 High Street, Teddington through agent Davis Coffer Lyons. Cova has relaunched the pub as The Royal Oak, after a redecoration of the ground and basement property, which totals 3,150 square foot. A new 25-year lease was agreed off an asking rent of £50,000 per annum.

Wine Cafés to close: Two sites operated as Wine Cafés are to close today, The Summertown Wine Café, in north Oxford, and the Finborough Wine Café, in Earls Court, will cease trading today after the leases on both buildings were put up for sale. Founded by Valere de Weck , the Summertown site has traded since 2006 with the Earls Court site a more recent arrival, opening two years ago.

First of eight planned Costas opens in Malta: The Coffee Company Malta, a subsidiary of Buttigieg Holdings Ltd, has spent €300,000 to open a branch of Costa Coffee. Managing director Robert Buttigieg said the company saw so much potential that in another two years it will have opened eight other Costa outlets in Malta, investing €1.5 million in all, and creating 200 new jobs.

Chipotle unveils sixth site: US Burrito chain Chipotle has unveiled its sixth UK site. The brand will open in Wimbledon at a site previously occupied by a restaurant called European near Wimbledon’s mainline train station. Chipotle hopes to have the site open in the first three months of 2013. Chipotle, which came to the UK in 2010, has opened three sites in London so far this calendar year.

Papa John’s narrow UK losses as turnover increases: The world’s third largest pizza company Papa John’s, which operates 191 franchised sites in the UK, has narrowed losses in the UK to £1,028,000 in the year to Christmas 2011 from £1,949,000 the year before. Turnover rose by 21.4 per cent from £18,906,000 to £22,943,000. The company reported that it had added 13 franchisees in the first eight months of 2012. It said: “During 2012, like-for-like retail sales from continuing operations in the franchised Papa John’s network grew significantly. The pizza market does, however, remain intensely competitive with significant promotional discounting continuing to take place in 2011 as prior years and this trend has continued through August 2012.” The company reported that orders through its website had increased by 32.9 per cent in the first six months of 2012. Papa John’s has set a target of opening 150 new sites in the UK in the next three years. Founder ‘Papa’ John Schnatter said: “We’ve been here in the UK for ten years now and we feel we have the infrastructure in place to start to make waves in the pizza industry. We recently invested £5.5 million in our own Quality Control Centre in Milton Keynes. This allows us direct control over manufacturing of our dough and distribution ensuring that our commitment to ‘Better Ingredients, Better Pizza’ and 100 per cent fresh dough can always be delivered. In addition this provided the capacity to allow us to expand further. In 2012, the importance of this investment becomes evident as we will break through the 200-store mark later in the year. However, none of us will be resting on our laurels. Papa John’s is looking to open at least another 150 stores in the next three years across the UK. This will represent an investment of £30 million, and create around 2,200 new jobs, at a time when many businesses are cutting back.” All the company’s corporate stores were sold to franchisees in 2010.


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