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Morning Briefing for pub, restaurant and food wervice operators

Fri 10th May 2013 - Greene King, Harry Ramsden’s and Restaurant Group

Story of the day:

Operators report exceptional trading at New Brighton’s Marine Point development: Operators have reported exceptional trading at the Marine Point development in the unlikely setting of New Brighton on the Wirral. The seaside resort of New Brighton has suffered years of decline but a new restaurant and leisure development has attracted a host of pub and restaurant operators – and seen a remarkable revival in the town’s fortunes as inhabitants of the Wirral flock there. Greene King, Prezzo, Loungers, JD Wetherspoon and Starbucks will be joined shortly by La Tasca at the centre – the brand is converting an independent restaurant called Brooklyns. There is also a Morrisons supermarket and a Grosvenor casino on the site. The development opened in late 2011 and Greene King broke new ground by building a Hungry Horse, The Sea Horse, without a car park at the development – it was the company’s first foray into the leisure destination arena. Greene King strategy director Mark Blythman told Propel: “It was the first opening of its type and won’t be the last. It’s one strand of our strategy of repositioning the estate where people go. It’s been a great success and we’ll do others. It’s traded significantly ahead of expectations since it opened.” Loungers also made a departure from its suburban site formula to open Marino Lounge within Marine Point. Managing director Alex Reilley told Propel: “We had strong expectations about the site given our knowledge of how other operators we’re performing so we’re very pleased. Last week, for example Marino was the fourth best performing Lounge out of 27. It’s a great scheme and we can’t wait for the summer.” JD Wetherspoon founder Tim Martin reports he, unusually, made a personal visit to make sure the company wasn’t making a mistake with a planned New Brighton opening. “I was so worried about that site that I went there myself (to have a look),” he told Propel this week. Its Master Mariner site opened two weeks ago and is understood to have taken more than £40,000 in its first week. Meanwhile, Prezzo boss Jonathan Kaye was so surprised by the high takings at his Prezzo opening he snapped up a second site at the development for his Chimichanga brand. Anthony Zausmer, of Posh Nosh Ventures, who lives in New Brighton, said: “I believe there will be winners and losers from Marine Point: The residents and visitors to the area will undoubtedly benefit, as will the chains with a clear idea of how their businesses function. The losers, as on the high streets of Britain, will be those who fail to embrace change and don’t give consumers what they want.”

Propel Opinion by Paul Charity: New Brighton is, in many ways, the changing leisure scene in microcosm. A faded seaside town, it has been given a shot in the arm by the development of a mixed leisure and retail park that is exerting its own gravitational pull. The Marine Point development will also occupy its own footnote in sector history as the first location Greene King proved that Hungry Horse is a brand with the power now to anchor a major scheme. And significant, too, that it is a confident, expanding Greene King leading the way here rather than Mitchells & Butlers. Similarly, Loungers founders Jake Bishop and Alex Reilley have had the chance to show that its Lounge concept, my tip five years ago as the company most likely to emulate JD Wetherspoon’s organic growth curve, can work in an entirely different kind of location. Meanwhile, JD Wetherspoon’s property finders are clearly still on form – it has bagged a prime site facing Marine Point and the extensive outside area will make for superb summer trading given decent weather.

In today’s separate Propel Friday Opinion: ALMR chief executive Nick Bish writes an open letter to his successor, Paul Charity examines the battle between Sky and BT for pub customers and Paul Chase looks at the implications of the Scottish court’s ruling on minimum pricing.

Industry news:

Nick Bish writes open letter to David McHattie: The Association of Licensed Multiple Retailers chief executive for two decades, Nick Bish, has written an open letter to his successor David McHattie. He tells McHatite: “The importance of particular issues ebbs and flows with the political and economic climate, and at any given moment one or other will require your undivided attention, sometimes at the expense of others taking a back seat. But whatever the hot topic of the day all retailers share the fundamentals of operating in this sector – people, permissions, planning, property – and plumbing! These are the bedrock of the business issues that they all face and which underpin the essential advice and representation that they must routinely get from their trade body.” (See separate Propel Friday Opinion e-mail for the full letter)

BT Sport to charge pubs £135 per month – 22% of Sky average charge: BT Sport will charge pubs and restaurants an average of £135 per month – 22% of the average Sky monthly charge of £643 per month. Pubs and clubs that sign up to BT Sport before July 1, 2013, will get twelve months subscription for the price of nine. BT is also offering all licensed premises a free box and free standard installation if they do not have the set top box and satellite dish needed to receive the new service. BT research has shown that nearly half of all Britain’s pubs and clubs are showing free-to-air sport, nearly one and a half times more than those who have Sky. BT believes its lower prices will mean that more pubs will now be able to afford to show premium sports without having to change their customer offering. (See separate Propel Friday Opinion e-mail)

Health Secretary – minimum pricing is not dead: Health Secretary Jeremy Hunt has insisted minimum pricing is not dead despite no mention of the subject in the Queen’s Speech. In March it was claimed that PM David Cameron had been forced to drop plans for minimum pricing in the face of opposition from senior members of his cabinet. But Hunt told BBC Radio 4’s Today programme: “Just because something is not in the Queen’s Speech does not mean the government can’t bring it forward as law, but we have not made a decision.” He added that the legal challenge to an alcohol pricing law in Scotland meant it “wasn’t possible for us to consider what course of action to do” in time for the speech.

Steve Richards – ALMR membership grew by 25% in 2012: The ALMR has built on two years of sustained growth to consolidate its position as the voice of the operator – and it will use that position to deliver sustained and effective campaigning on the core issues that matter to retailers. That was the message delivered by ALMR Chairman, Novus’s Steve Richards, at the Association’s Annual General Meeting this week. Over the course of 2012, the ALMR saw a flurry of new recruits from across the sector with operator numbers increasing by a quarter and total revenues up by 50%. New joiners included companies of all sizes and all trading styles – from iconic nightclubs such as Fabric and Ministry of Sound, major multiples such as Mitchells & Butler and Luminar as well as new entrepreneurs like Loungers, Draft House and Lovely Pubs. Supplier members increased by 12.5%. Praising outgoing chief executive, Nick Bish, and the team in Ealing, Richards said: “These are not soft comparisons. The ALMR has seen sustained growth in numbers, revenue and reputation year on year and, in our 21st year, we have really come of age. We have used that strength and depth of membership giving us ever greater success in campaigning on the issues that matter most to operators’ bottom line – on tax, on employment, on planning and licensing. We are at the forefront of resisting the worst excesses at local and national level and promoting the positive benefits our sector brings.”

Chicago Eataly will include a brewpub: The Chicago opening of foodservice phenomenon Eataly, set for the autumn, will include a brewpub. Delaware-based brewery Dogfish Head announced that it will continue its partnership with Eataly and will design the menu and oversee the brewing process at the Chicago outpost. In New York, Eataly comprises multiple restaurants, specialty Italian shops and a rooftop beer garden and small brewery called Birreria. The as-yet-unnamed head brewer at the Chicago location will be trained by Dogfish Head’s staff, as well as by two Italian breweries, Birra Baladin and Birra del Borgo, who also have partnerships with Eataly.

Company news:

Vapiano secures long-awaited third London site: Vapiano, the Italian fresh casual dining restaurant, is to open its long-awaited third restaurant in London. It is investing £2.5 million to redevelop a former nightclub and restaurant in Wardour Street, Soho. Vapiano is set to start building work in the coming weeks, with the aim of opening the restaurant in December (2013). It will have a customer area of 7,000 square foot and capacity for 250 diners. The restaurant will employ 80 staff. The company’s existing restaurants in London are located at Great Portland Street and Bankside. Managing director Phil Sermon said: “We are thrilled to have secured such a fantastic site in the heart of Soho. This is just the start of our expansion and highlights our intent to open many more Vapiano restaurants in prime positions across London and the UK.” Vapiano serves fresh pasta, pizza, salad and dolci, all prepared and made in house to order by chefs interacting with customers. The deal was undertaken by Jackson Criss/Syteways, the agents acting on behalf of Vapiano.

Restaurant Group chief executive earns £1.7m: The Restaurant Group chief executive Andrew Page earned a total of £1,709,000 in 2012, up from £1,417,000 the year before, according to the annual report. Page’s earnings were made up of a basic salary of £590,00 and a bonus of £974,000 plus other benefits. Page can earn up to 175% of his basic salary in bonus if targets are met. Finance director Stephen Critoph earned £706,000 compared to £625,000 the year before. He earned a basic salary of £278,000 and a bonus of £358,000 – his bonus is capped at 137.5% of basic salary. The annual report stated: “Mr Page’s salary reflects his outstanding leadership and ongoing contribution to the successful development of the Group and recognises the importance of continuity and retention of a highly regarded CEO in a competitive and challenging market. The group achieved record profits in respect of 2012, with group profit before tax at a level ahead of the stretch target. Consequently the group element of the bonus target for the directors was met in full.”

Latest Realpubs site to open next week: The latest conversion by Greene King to its Realpubs format, The Grove in Surbiton, will open next Friday (17 May) at 5pm. It is understood that Greene King has invested several times more in Surbiton than at its last opening, The Grove in Ealing, which cost just £80,000. The new-look Surbiton pub will have a 70 cover dining room, dining terraces and outdoor bar/garden kitchen to serve its very large garden. Realpubs founders Malcolm Heap and Nick Pring left Greene King last month. It is thought they might take some time off before returning to the sector although they still own a stake in The Empress of India in Hackney through their London Ordinaries vehicle, which was incorporated in March 2011, a month before Realpubs was sold to Greene King for £53.1m.

Crowdcube itself seeks funding through crowd-funding: Crowd-funding website Crowdcube has raised £1.2m through crowd-funding within a week. Founder Daren Westlake told investors on Tuesday: “Last week we raised an incredible £500,000 in just two days from our existing investors via Crowdcube and we’re now excited to be able to extend this offer to you. As such, we’ve increased our pitch target to a cool £1 million to give you the opportunity to invest in Crowdcube Limited. This forms part of a wider fundraising round of £1.5 million, of which we have £500,000 already committed from a US-based institutional investor. The investment will be used to expand our team significantly to be able to support our rapid growth, to execute our marketing strategy to raise the awareness of Crowdcube amongst entrepreneurs and investors and to expand internationally. Crowdcube, which is eligible for EIS tax relief, is a leading equity crowd-funding platform and has grown rapidly since its launch in 2011. The website, which is authorised and regulated by the Financial Conduct Authority, has raised over £6.7 million for 46 UK businesses and has over 34,000 registered investors.” Last night, Westlake reported: “Wow! We have been overwhelmed by the response overnight surpassing our £1 million target within hours of putting it live. The pitch will continue to accept investments up to £1.5 million - we’re currently over £1.2 million raised so far. Once it reaches the upper £1.5 million limit we’ll close the pitch.”

JD Wetherspoon – ‘we hope Greene King respects Sterling decision’: JD Wetherspoon has been granted a licence for its planned pub in Stirling. Members of Stirling Licensing Board voted four to one in favour of the licence for a Wetherspoon pub in Spital Street. The Board had been asked by the Court to reconsider their original decision to grant the licence in September last year, after Greene King sought a judicial review. Last month Wetherspoon chairman Tim Martin criticised Greene King for seeking a judicial review in order to stop the proposed pub opening in a disused retail shop in the city centre. He said: “We would now ask Greene King to respect the decision made by members of Stirling Licensing Board. This would then allow Wetherspoon to invest more than £1.5 million on the new pub and create 50 jobs in the process, which has to be good news for the city. Just as important, it would offer people in Stirling more choice in terms of which pub they wish to visit”. Previously, Martin had stated that the actions of Greene King were a throwback to the 1980s when the major brewers tried to stop Wetherspoon and other companies opening up close to their pubs.

Hook Norton provides more tenant support: Cotswold-based brewery Hook Norton has announced that it has partnered with leading hospitality purchasing group Trade Together to provide its tenants with access to a wider range of preferential rates across essential goods and services. Trade Together has already visited three Hook Norton pubs, and found areas for substantial savings in each. Bruce Benyon, operations manager at Hook Norton Brewery, said: “Trade Together have already met a small group of our customers and their bespoke service was able to provide significant savings for them all in different areas. They are already working on product areas which are significant cost lines to many of our businesses, and I am sure they will be able to improve even further on the excellent terms our customers already receive.”

Former Artubus general manager to open restaurant: Former manager of Michelin-starred Artubus Tom Slegg is to open his first solo venture, Picture, based in London’s Great Portland Street - it opens next month. Slegg has worked at some of Suffolk’s best-known sites, including The Angel Hotel in Bury St. Edmunds, and The Riverside in Woodbridge. He will be teaming up with chefs Alan Christie and Colin Kelly, having worked with them at Arbutus and Wild Honey in London, The dishes will be international, but Slegg will draw inspiration from his experiences in Suffolk when it comes to service. “I have been involved with some amazing restaurants in London for the last few years, but I look back at my time in Suffolk where I learned a lot from the experiences I had there,” he said.

Public enquiry begins on plan to turn former Orchid pub into a KFC: A public inquiry has begun on the rejection of a KFC plan to turn Orchid Pub Company’s Organ & Dragon pub in London Road, Ewell into a new site. The Government’s Planning Inspectorate is holding a three-day enquiry into Epsom Council’s decision, taken in December last year. The majority on the council’s planning committee said that development on the site, at the junction of London Road and Ewell bypass, would have “an adverse impact on the highway’s safety”.

Cau to open third site in Kingston: Cau, which serves ‘competitively priced Argentinean cuisine’, is to open a third site in Kingston's new riverside development later this year – which will feature six new restaurants. The first Cau restaurant launched in July 2011 in Guildford, and was followed by a 130-cover site on Benet Street, Cambridge that opened in January 2013. Cau is headed by Charlie McLean, whose previous experience includes time spent with the Yum brand, as well as Gaucho Restaurants.

Starbucks submits plan for a drive-thru on the site of pub: Starbucks has submitted a plan to build a drive-thru on the site of Woodman pub in Dewsbury Road, Morley. The new coffee shop, which will create 15 local jobs, will be a single storey ‘contemporary branded building’ with integrated parking including disabled facilities and a drive-through lane.

Plans unveiled for 13th new hotel in Newcastle since 2011: Budget hotel chain Tune is planning a 104-bedroom hotel at historic Proctor House, which sits within the heart of the Quayside’s conservation area. Work will start next month with £8.3m to be spent on the Edwardian building’s restoration. Tune Newcastle will be the eighth hotel to be built in the city since 2011 with a further five planned. The Tune group runs hotels in Malaysia and Indonesia and has five businesses already in the UK – four in London and one in Edinburgh. The cheapest rooms have no windows, TV or Wi-Fi access and towels cost extra, though all have en-suite bathrooms.

St Austell names strategic transport partner for expansion beyond Cornwall: Transport firm Norbert Dentressangle has been chosen to provide St Austell Brewery with a distribution platform in Avonmouth to support the company’s expansion beyond the West Country. Dentressangle will provide warehouse space within an existing customer site in Avonmouth, as well as transport products on behalf of St Austell from Cornwall to the new facility. “This partnership is of great strategic importance to us as it provides a strong platform from which to extend in the rapidly changing brewing sector,” said St Austell Brewery’s logistics manager, Kevin Andrews.

Harry Ramsden’s appoints solicitors as it gears up to expand franchise network: Legal firm Ashton KCJ has been appointed by Harry Ramsden’s to spread its franchise network across the UK and internationally. Following a competitive tender process, Ashton KCJ has been instructed to advise the chain on all of its domestic and international franchising. Harry Ramsden’s, founded in Yorkshire over 80 years ago, has over 30 outlets around the UK and Ireland and is embarking on a period of expansion, with plans to launch 50 new ‘quick service’ restaurants. Joe Teixeira, chief executive at Harry Ramsden’s said: “Ashton KCJ has a proven track record in the franchising sector and we are looking forward to working with the whole team. We look forward to evolving this much loved and iconic British brand into the nation’s favourite fish and chip proposition.”

Maclay Inns adds Glasgow city centre site: Pub operator Maclay Inns has bought The Grahamston bar on Waterloo Street, Glasgow. The deal is Maclay’s first venture in the heart of Glasgow city centre. A £500,000 refurbishment of the venue, which is currently closed, will start in June, with an August re-opening scheduled. The acquisition of Grahamston follows Maclay’s successful launch of craft beer pub Munro’s in the west end of Glasgow earlier this year and the re-launch of its flagship venue, The Tullie Inn, Balloch after a £700,000 refurbishment. Steve Mallon, managing director of Maclay Inns, said: “Grahamston’s is a great space with an unrivalled location in the heart of the office area - it is the perfect spot for our first city centre venue and we are looking forward to starting the refurbishment.”

SA Brain to open latest coffee shop next week: Cardiff-based brewer and retailer SA Brain will open its latest Coffee Coffee#1 in the Bournemouth suburb of Winton next Friday (17 May). The company has converted a former Dorothy Perkins shop on Wimbourne Street. The company stated: “We’ll be turning it into a wonderfully cosy coffee house, with rustic reclaimed furniture, lovely leather armchairs with plenty of character and cheer. The interior will be designed to be warm and vibrant with a living-room feel, carefully chosen artwork, shelves packed with vintage books and a log-stocked fireplace.”

TCG invests to expand the day-part trading at two sites: Managed operator TCG has invested £400,000 in developing sites in Newquay and Nottingham to grow the day-part trade. The venues, Squares in Nottingham and The Sailors Arms in Newquay, both combine a pub/bar and nightclub under one roof. TCG chief operating officer Nigel Wright said: “Both Squares and The Sailors Arms were trading strongly prior to the refurbishments. We identified an opportunity to take a bigger slice of the daytime custom and we’re confident that the targeted investment will enable both sites to grow this side of their business, as well as refreshing the offer for their late night customers.” At Squares, new seating booths and softer colours have created a warmer, more welcoming feel. The drinks range has been extended, including the addition of three cask ales, while a new pizza area has been installed to create a food option around late night and live sport occasions. Squares is now opening at the earlier time of 9.00am in a bid to attract more breakfast and morning coffee customers. At The Sailors Arms, the investment has focused on the traditional pub area. Interior design is inspired by 1950s seaside resorts with a contemporary edge that sees distressed timbers mixed with more industrial furnishings to create a quality feel overall. Other touches of seaside nostalgia include four flavours of gourmet popcorn and a hot dog cart on the pub’s panoramic deck overlooking Newquay Bay. At the same time, the bar has been redesigned to create a dedicated cocktail area, and accommodate a wider range of wines and coffees.

New Carluccio’s franchise site opens in Kuwait: A new Carluccio’s has opened under franchise in Kuwait. Sajan Alex, country operations manager, Foodmark Kuwait, said: “We are bringing our customers in Kuwait the whole Italian experience of tasting, dining, and purchasing selections from our deli in a fully-fledged Italian atmosphere.” The new Carluccio’s site is located in The Avenues, Phase 1.

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