Allegra – coffee shop market grown by 6.4%: The total UK coffee shop market is estimated at 16,501 outlets and continues to show strong sales growth of 6.4% on last year with £6.2 billion total turnover, according to coffee specialist Allegra Strategies definitive report, Project Café13 UK. The branded coffee chain segment recorded £2.6 billion turnover across 5,531 outlets, delivering sales growth of 9.3% and outlet growth of 5.9%, adding 306 stores in 2013. After 15 years of growth, the coffee shop sector continues to be one of the most successful in the UK economy. Costa Coffee (1,670 outlets), Starbucks Coffee Company (790) and Caffè Nero (560) remain the UK’s leading brands with 54% branded chain market outlet share. Physical expansion by leading chains remains the core driver of market growth. In particular, Costa added 118 UK outlets and 18% sales growth in calendar year 2013. One in five coffee shop visitors visit coffee shops every day compared with one in nine in 2009, drinking an estimated 1.7 billion cups of coffee per year in coffee shops. A greater commitment to coffee credentials by the non-specialist sector, such as pubs, fast food and supermarkets has generated wider consumer participation while adding to competitive pressures. Furthermore, third wave/artisan coffee has profoundly influenced operator and consumer expectations about coffee quality and store design. Allegra forecasts the total UK coffee shop market will exceed 20,500 outlets and turnover of £8.7 billion by 2018, with 4.5% annual outlet growth over the five-year period. The branded coffee shop segment is forecast to exceed £4.1 billion across 7,000 outlets by 2018 with outlets predicted to grow at 5.2% compound and revenue at 10.0% compound over the next five years. It is estimated that the UK has the long-term potential to comfortably host more than 9,500 branded coffee shops. Allegra Strategies’ managing director Jeffrey Young said: “The UK coffee shop industry is showing consistent strong growth in both sales and outlets. Britain is now a nation of great coffee drinkers. The UK consumer increasingly appreciates a quality cup of coffee and operators must continue to deliver innovation, fantastic quality while genuinely engaging with customers in order to stay ahead of the curve.”

First Propel Multi Club Conference of 2014 open to bookings: The first Propel Multi Club Conference of 2014, to be held on Thursday 13 March at the Lancaster Gate Hotel, central London, is now open for bookings. Multi-site pub, restaurant and foodservice companies can claim up to two free places each. E-mail jo.charity@propelinfo.com to reserve places.

Minimum Wage set for big increase: The Daily Mail has claimed that the government is likely to increase the Minimum Wage (MW) by 50p this coming October. Analysis for Downing Street suggests that raising the MW would save the government £1bn as workers pay more taxes and claim less in benefits. One Conservative said: “It’s a no-brainer. This counters the perception that the Conservatives are the party of the rich.”

Majestic Bingo: The Times has reported that sector investor Luke Johnson has hired a former Gala Coral executive, Mark Jepp, to lead a new bingo business that he has incorporated called Majestic Bingo. It is thought that Johnson is looking at making bid for at least part of the Gala bingo chain.

Colorado’s first pot retailers open: The world’s first state-licensed marijuana retailers legally permitted to sell marijuana for recreational use opened for business in Colorado last week with long lines of customers, marking a new chapter in drug culture in the United States. Around three dozen former medical marijuana dispensaries have been newly cleared by state regulators to sell the drug to consumers.

 

Nick Collins to become chief operating officer at Loungers: Loungers current finance director Nick Collins is to step up to become chief operating officer (COO). Collins, who became Loungers’ first finance director when he in joined in January 2012, will become the company’s first COO, although he will not start his new role until a replacement finance director has been appointed. It is understood that the Loungers board took the decision to create the COO role with Collins firmly in mind as the business looks to push through the 50-site barrier and beyond to their 2017 target of 90 sites. Previous to joining Loungers, Collins had been the finance director at Capital Pub Company up to the point it was sold to Greene King in 2011. Prior to that he had been co-founder and managing director of gourmet sandwich chain Fuzzy’s Grub. Loungers managing director Alex Reilley said: “Since joining Loungers Nick has completely immersed himself in every aspect of the business and has proven himself to be so much more than just an excellent finance director. He’s extremely well-liked and immensely respected within the organisation and he totally ‘gets’ the culture of the business and what we want to achieve – and he now has an even more significant role to play in helping the business reach its goals. His entrepreneurial background coupled with his financial understanding of Loungers makes him the perfect fit for the COO role and the board is delighted that he’s making the step up.”

New Pub Company posts 9.9% like-for-likes: New Pub Company, the seven-strong London pub operator led by Peter Linacre, has reported 9.9% sales growth in the five weeks through to the end of December. Linacre said: “In the five full weeks ending last Sunday, our like-for-likes were up 9.9% and last week we were 17% up against last year. The big days in December were very, very good. It was very quiet at the back-end of last week but it was the best New Year’s Eve we’ve ever had. The poor weather stops people going out for a casual meal or drink, but if you’re booked in you are still going to go.”

ETM Group reports 9.1% like-for-likes in December: Restaurant, bar and gastro pub operator ETM Group, headed by Tom and Ed Martin, has reported a 9.1% like-for-like rise in sales for a record-breaking December with performance across its business improving. The company, which recently opened its 11th site One Canada Square restaurant and bar in Canary Wharf, saw a particularly strong performance from pre-booked and prepaid revenue. Co-owner Ed Martin said: “We’re extremely pleased with the increase in like-for-likes for December trading. All areas of the business were improved on last year and we are looking forward to continued strong growth through 2014.”

McDonald’s commits to sustainable beef: McDonald’s in the US has announced its commitment to begin purchasing “verified sustainable beef” during 2016 following a two-year ramp up during which it will “listen, learn, and collaborate with stakeholders from farm to the front counter to develop sustainable beef solutions.” McDonald’s sells about one billion pounds of beef annually in the US. 

Real Eating Company reports 7.2% rise in December like-for-likes: The Real Eating Company Group, the south east-based independent operator of coffee shops and restaurants led by Helena Hudson, has seen strong growth of 7.2.% in like-for-like sales through December. Helena Hudson said: “We are very pleased with the results, despite the challenges the wind and rain brought to customer footfall. Whilst our overall customer numbers were down by 3% in December, we increased our average spend by 13%. This increase came predominantly from hot food sales in our coffee shops. We have extended and improved our hot food offer through the autumn and this had a marked impact on Christmas business.” She added: “As an independent business with a commitment to be part of the communities where we make our sales, we were also pleased to be able to support local charities through a number of fund-raising iniatives in December. This was very well received, well picked up across social media and certainly strengthened our local market position in December.”

La Tasca reports like-for-like growth of 3% in final six weeks of 2013: La Tasca, the tapas chain headed by Simon Wilkinson, has reported 3% like-for-like sales growth in the final six weeks of 2013. He said: “In the key trading pre-Christmas week commencing 16 December we were up 6.9% like-for-like with Black Friday up 18.7% and the Saturday up 19.2%. Other highlights were record sales in both central Manchester sites on Saturday 14 December and over 10% like-for-like sales growth as a company on New Year’s Eve.”

JW Lees reports like-for-likes up 6%: The north west of England brewer and retailer JW Lees has provided further detail on trading over the six weeks at the end of 2013, including the crucial December period. Managing director William Lees-Jones said: “I can now confirm like-for-like sales were up 6% for the six-week period, and our 25% off all food and drink offer in January, combined with lack of snow, means that we are optimistic in relation to January.”

Tynemill reports dip in turnover and reduced profit: The award-wining pub operator Tynemill, the trading name for Castle Rock Brewery, has reported a 3.2% dip in turnover to £7.83m for the year to 31 March 2013. Pre-tax profit was £75,500, down from £314,700 the year before. The company sold three properties – a managed pub, an un-let tenancy and a further un-let property – and is looking to invest proceeds in “sparkle spend” at other sites in the estate. It said: “The wettest summer in living memory, the London 2012 Olympic Games and the continuing very poor economic position gave many reasons for customers not to set foot in the pub. Despite this downturn, the company’s turnover drop also included the loss of revenue from a site closure during the year. The composite numbers compared well to figures from published peer groups and the industry averages. Trading into the financial year to March 2014 is much improved and in most of our sites the downturn has been reversed.” The value of freehold property has been written down by £1.72m. The company added: “From this base the directors expect to build value into the assets in the years to come and are looking to continue to grow the pub estate where suitable sites are identified at suitable pricing.”

Food & Fuel buys 13th London site: Food & Fuel, led by the former boss of Spirit, Karen Jones, has acquired its 13th premises in London. The gastropub and cafe-bar group bought the Grosvenor in Oaklands Road, Ealing, West London from Enterprise, against competitive bids from both operators and developers. The deal was brokered by AG&G. AG&G director David Gooderham said: “Despite being an established residential area, this part of Ealing is short on quality pubs and is set to benefit from future Crossrail stations, so it’s the perfect place for one of Food & Fuel’s welcoming pubs with their great food offer.”

All Our Bars sees like-for-likes up by 2.4%: The Kent-based pub group All Our Bars, which operates 37 sites and is led by Paul Wigham, has reported Christmas like-for-like sales up 2.4%. The group, which has traditionally been wet-led but more recently has acquired food sites, reports that although it was pleased with the overall result, they were affected by weather. Wigham said: “We are happy that we finish in positive territory ,but if we are honest, it could have been better had it not been for the terrible weather conditions. The biggest impact came in new sites that are outside of the like-for-like estate. We had situations where one site in Cobham was cut off completely, and the cellar in Horsham was under four feet of water on 23 December. Whilst this is nowhere near to the issues suffered by pub operators in the south west, it still had a huge impact on those businesses. The historic bias of our business has been wet-led, and so the big weeks for us are those when the customers are at home on holiday. The week ended 29 December was our biggest as usual and we were 6.3% up in that week. However, the following new year week was poor, with the wind and rain precluding our normal post-New Year’s Eve trading after a great start to the week. We still finished marginally up in that week but it could have been so much better. The remainder of December finished ahead. The weakest element for us was the middle week ended 15th December, when we sense that many people attended weekend Christmas functions – and I think this is reflected in some of the statements by the focused food operators.”

Newcastle nightclub may become student accommodation: A plan to turn the site currently occupied by the LQ nightclub in Newcastle upon Tyne, formerly the Liquid and Envy nightclub, into student accommodation has been submitted to the city council. The London-based estate agency Magnetic, which owns the 21,000 sq ft site on New Bridge Street West currently occupied by the nightclub and the Grade II listed Dobson House, is proposing to develop 50 apartments spread across three separate seven, nine and 11-storey blocks to meet the demand for student housing in Newcastle. As well as student housing, the design also includes 16,000 sq ft of space available for retail, cafe, restaurant or bar use. 

Brooklyn Bowl to make European debut: Brooklyn Bowl, the US concept that combines a music venue, bowling alley and restaurant, makes its European debut in London next week on 17 January. The opening will incorporate food by the New York-based Blue Ribbon restaurant. Brooklyn Bowl has signed a 15-year lease with AEG, owner of the O2 Arena, with AEG and Brooklyn Bowl as equal partners in building the location in a 28,000 sq ft area in the arena complex. Jay Marciano, president and chief executive of AEG Europe, said he became an admirer of Brooklyn Bowl during his tenure in New York as the head of Madison Square Garden Entertainment, when he saw it was popular among musicians as well as fans. About a year ago, having taken the helm of AEG Europe, Marciano approached Peter Shapiro, a Brooklyn Bowl partner, and proposed converting the exhibition space at the O2 into a similar club. “I figured that was the best use of the space,” Marciano said in an interview.

Long leasehold of Buddha Bar sold for £3.9m: The long leasehold of the former Buddha Bar at 8 Victoria Embankment, central London has been sold to One Embankment, a jointly owned company between David Dangoor and George Hammer, for £3.9m. The property will be operated by Hammer Holdings alongside its “One Mayfair” and “One Marylebone” events venues. The bar and restaurant premises totals 15,723 sq ft (1,461 sq m) and is located on the north side of the Thames, immediately under Waterloo Bridge, with entrance doors onto Victoria Embankment. Nick Lyell, of Savills’ leisure and trading team, said: “The former Buddha Bar building offers a sizeable premises with a prominent frontage onto Victoria Embankment and was therefore a fantastic opportunity for leisure operators. The purchasers plan to fully refurbish the property in order to launch what will be a third venue in London to provide a glamorous and unique hosting space.” The property was sold on behalf of receivers from Baker Tilly.

Jenkins Bakery adds 28th shop: Jenkins Bakery has opened the 28th in a chain of retail outlets covering a sizeable area in South Wales, from Bridgend in the east to Carmarthen in the west and north to Ystradgynlais in Powys – the latest outlet is in Porthcawl. Jenkins Bakery’s operations director, Russell Jenkins said: “This is the third new shop we have opened in the last 12 months. We are well known for having our roots as a family firm in Llanelli, but we will continue to expand our range of shops as and when we see fit.” The past 12 months have seen the Jenkins Bakery open a new flagship coffee shop at East Gate and a purpose-built new outlet in Portmead in Swansea.

Sankeys re-opens in Manchester: Manchester superclub Sankeys has re-opened six months after financial difficulties forced its closure. Owner David Vincent said shutting the club in May “broke my heart”, but is hopeful that bringing in a new management team will see a brighter future for the Ancoats venue. He said: “I never wanted to shut the club down. It broke my heart – it really did – but we had no option. We were faced with a massive financial debt that was forced on us by external matters outside of the company. There were two options; either we traded through and risked losing two clubs [Manchester and Ibiza] or we focused on one. We felt that the time was right to take Ibiza to the next level and we felt that we couldn’t continue to try and save a club that maybe couldn’t be saved.”

Frankie & Benny’s set for Wisbech: Frankie & Benny’s is set to take one of the restaurant spaces in the new Tesco and Light Cinema development in Wisbech, Cambridgeshire. The brand has submitted an application to display its advertisements at the premises on Cromwell Road, including illuminated signs. Tesco is on track to open towards the end of February. The cinema is also going well and manager Phil Dove said it was aiming to be open for the Easter holidays, at the beginning of April.

Hangfire Smokehouse pop-up find new pub home: The pop-up barbecue restaurant Hangfire Smokehouse will be based at the Lansdowne in Canton, Cardiff from next month. The venture, launched by two friends inspired by their travels in the US, became hugely popular via word of mouth at its previous venue, the Canadian pub in Splott. It also served food at Porters in the city centre. It served its final meal there before Christmas and has since remained tight-lipped about its new base. It will start at the Lansdowne in February, where it will serve from 5.30pm to 9pm on Thursdays and Fridays. It is also set to announce a new venture with Celt Brewery. Hangfire Smokehouse, run by Sam Evans and Shauna Guinn, serves meals such as pulled pork and beef brisket on paper plates with wooden knives and forks. 

New sandwich concept to open in Marylebone: A new cafe-cum-takeaway concept, Souli, is to open on George Street in Marylebone, central London on 20 January. Souli is the brainchild of former research analyst Hella Souli and will serve gourmet sandwiches such as home-made porchetta with wild rocket and fig chutney or crisp and fresh endive, walnut and poached pear salad with Roquefort dressing.

Chinese developer buys former Young’s brewery site in London: Greenland Holding Group, the Chinese state-owned property developer, has bought the former Young’s Ram brewery site in Wandsworth, South West London from Minerva, in its first UK deal. Minerva won planning permission last year for 661 new homes on the 7.5-acre site, including a 36-storey residential tower. The £600m, 90,000 sq ft scheme will also include new shops, restaurants and bars, and a microbrewery. The existing buildings will be restored to create a brewing museum. The Ram site is reputed to be Britain’s oldest continually operating brewing site, with brewing dating back to the 16th century. Production of Young’s beers moved from Wandsworth to Bedford nearly eight years ago, after the company decided to concentrate on pub retailing.

Jamie Rollo – Spirit is one to avoid: Morgan Stanley leisure analyst Jamie Rollo has named Spirit Pub Company as one of his four stocks to avoid in 2014. He said: “Our Underweight rating reflects Spirit’s weak underlying FCF, the risk that like-for-like sales slow as capex levels fall back, the risk that Leased pubs remain a drag on growth, and the valuation. We think the debt reprofiling was a tacit admission that the debt structure is too rigid (even now), and while it reduces the risk the plc runs out of cash, we still forecast plc cash burn to continue, such that the dividend looks uncovered by plc FCF. We also note that most of F2013’s profit growth appears to have been driven by one-off central cost savings. The shares are not optically expensive on a cal 2014e P/E of 10.2x and 8.6x Ebitda, but we note the FCF yield is just 5.4% once adjusted for provisions and other cash charges, and the dividend is not covered by plc cash flow. As such, we think the shares are fundamentally overvalued. The UK economy is recovering nicely, and pubs and restaurants offer a good play on this. Despite this, industry like-for-like sales growth has only been running at circa 1% for the last six months (Coffer Peach stats). London has remained a solid market, and Spirit has high exposure here. The football World Cup could be a small positive this year. Finally, the company could raise debt to do a deal, which could both be EPS-enhancing as well as help generate some plc profits in order to sustain the dividend.”

Hard Rock opens first Rocksino in Cleveland, Ohio: The Hard Rock brand has opened its first Hard Rock Rocksino in Northfield Park, Cleveland, Ohio. The venue combines a hotel, casino and café. The Rocksino offers more than 2,200 gaming devices, and four dining options, including the Hard Rock Cafe, Kosar’s Wood-Fired Grill and football legend Bernie Kosar’s premium steakhouse. There is also a Hard Rock Live music venue, the fifth of its kind, with a capacity of 2,600.

Wagamama set to open in Sevenoaks: Wagamama is set to open in Sevenoaks, Kent, occupying the site of a former Slug & Lettuce that closed in 2009. In a licence application to Sevenoaks Council, the chain is applying for permission to open to the public from 10am until half past midnight six days a week, closing an hour earlier on Sundays.

Lebanese restaurant operator reports loss: The Lebanese restaurant operator Abouzaki Holdings has reported a fall into the red. The company saw turnover of £18.42m in the year to 31 March 2013, up slightly from £18.38m the year before. Pre-tax losses were £965,000, a turnaround from a profit of £457,000 the year before. In a Companies House filing, it said: “Revenue has remained static and the cost of goods has gone up, thus putting pressure on margins.”

Restaurant outsources takeaway calls to India: A growing restaurant business in the West Midlands is outsourcing its calls for takeaway orders to India. Muhammed Ali Malik, owner of the Mr Malik restaurant in Newcastle-under-Lyme, told the Stoke Sentinel newspaper: “Being a restaurant, we also get a lot of takeaway customers. What slows us down is when we have a queue of people waiting to be served and the telephone is going at the same time with people wanting to give takeaway orders. A local company has provided us with a call centre solution. Customers will call dedicated operators who are just waiting to receive takeaway orders. The call goes to India, then the order is sent over the internet directly to the kitchen. It is going to make ordering a takeaway much faster. People might think it is taking jobs away from the local area, but I am actually recruiting more staff.”

Plan to turn bank empty for eight years into ‘ale and pie house’: Planning permission is being sought to turn a landmark bank building in Stourbridge town centre in the West Midlands that has stood empty for eight years into an “ale and pie house”. The application to convert the Old Bank on the corner of Coventry Street and High Street in Stourbridge has been made by Adam Myers, the new owner of the bank. Charnjit Bhandal, of Adam Myers Ltd, told the Express and Star newspaper: “The proposal is to bring back to life a redundant building A local businessman is keen to rent the building and turn it into the Old Bank Ale and Pie House. Breakfast will be available as well as coffee and tea being served throughout the day and family Sunday lunches.”

Wolseley operator reports turnover doubled: Rex Associates, the operator of Brasserie Zedel and The Wolseley in London, has reported turnover increased by 105% to £28.59m in the year to 31 March 2013, up from £13.91m the year before. The company made a loss before tax of £2.84m, down from a loss of £.76m the year before. Group operating losses were £92,000, down from £767,000 the year before. The company said: “The year to 31 March 2013 was a transformational year for Rex Restaurants. In April 2012, new bank facilities and a £21.5m investment predominantly made by Graphite Capital, were secured. This allowed the group to continue expansion with the opening of Brasserie Zedel and Colbert, taking the number of new restaurants opened in the 12 months to October 2012 to three. The company’s flagship restaurant, The Wolseley, continued to grow strongly, increasing turnover 2% and operating profit 33% in the period.” The company also reported that turnover at the Delauney grew by 243% in the year. The year saw pre-opening costs of £923,000 in relation to Brasserie Zedel and Colbert. The company’s founders, Chris Corbin and Jeremy King, have each given a personal guarantee of £500,000 in respect of the company’s banking facilities.

Arkells sees dip in turnover and profit: The Wiltshire-based brewer and retailer Arkells, which has 15 managed pubs and 84 tenanted sites, has reported turnover dipped to £18.41m in the year to 31 March 2013 from £18.49m the year before. Pre-tax profit was £1.88m, down 16.8% from £2.26m the year before. The company said: “Managed sales increased, with wet sales up 5.2% and accommodation income up 17.8%, but profits were lower than in 2012. Rents increased marginally but profits from free trade and commercial property declined. Capital repayments on a new 12-year loan will be £750,000 per annum.” Chairman James Arkell said: “I read that in America there were 1,300 applications this year to start up open micro-breweries. In the UK, we have the same prevalence of breweries. This is forever squeezing our market in the free trade. However, it has increased awareness of ales on the bar. It has been another challenging year for the economy and, in particular, in the sector we operate. All seemed well until Christmas, then someone turned the lights out and the weather worsened, so the last quarter did the damage to our results. The company strategy is to trade up where possible in order for our tenants to make a fair living. As part of our assessment of managed and tenanted, we are constantly looking at opportunities for developments, disposals and acquisitions. Creating profitability for the long-term survival of our pubs is paramount.” The company sold four pubs in the year. 

Brakspear holds prices for tenants: Pub operator and brewer Brakspear is holding prices on all Brakspear ales supplied to its 129 pubs, sparing its tenants and lessees the rises of up to 6p per pint imposed by some national brewers in the January round of price increases. Brakspear is absorbing the rise in beer production costs in order to hold prices on its beers brewed both at the Wychwood brewery in Witney and at the Bell Street Brewery in Henley-on-Thames. These include the popular Brakspear Bitter and Oxford Gold ales as well as Brakspear Special, which was restored to permanent production with the opening of the new microbrewery last March. Brakspear’s chief executive, Tom Davies, said: “A pint of cask ale is one of the main attractions of a visit to the pub, and by holding the price of Brakspear beers, we can help to make it a more affordable pleasure for thousands of pubgoers. January is always a flat month for our industry, but at least our pubs will be starting the year with a price advantage on Brakspear beers. Many drinkers choose our pubs for their Brakspear ales, so it’s good that our tenants and lessees are able to offer them their favourite pint at last year’s price, rather than hitting them with an increase. On average, beer prices have gone up by 3 to 3.5% this month.” 

Oakman Inns core sites report ebitda of £1.5m: Oakman Inns and Restaurants, the award-winning operator led by Peter Borg-Neal, has reported group turnover rise by 18.77% to £8.98m in the year to 31 March 2013. The company made a loss of £844,000 after taking a bridging loan from shareholders to secure the freehold of The Crown and Thistle in Abingdon. Of the sum, £660,000 related to depreciation and £189,000 related to exceptional costs such as finance arrangement fees. The company’s five core sites – The Akeman, The Old Post Office, The Red Lion, The Kings Arms and The Blue Boar – grew like-for-like sales by 14.6% to £7.97m and ebitda for the five grew 55.5% to £1.5m. Average sales per core Oakman site exceeded £30,000 a week and average ebitda per mature site reached £300,000. The company said: “Increase in administrative expenses and large singular costs associated with trading losses at the Crown and Thistle and legal fees, design fees and pre-opening costs relating to acquisitions negatively impacted on ebitda. Despite these factors, group Ebitda rose 5.7% to £244,000. Net cash flow from operating activities increased by 7% to £501,000. This sum comfortably covered our interest costs. Capital expenditure of £2.67m was funded by a net increase of £2.72m of financing which meant there was a net increase of cash of £122,000 over the year. We continue to pay our bank debt aggressively and that reduced by £328,000 to £1.458m over the course of the year. However, the increase in shareholder loans (mainly pertaining to the aforementioned bridging loan) meant that net debt increased by £1.992m to £5.654m.” Accommodation has become a significant part of the company sales mix, reaching £610,000 for the year. The company’s sales mix is 40% wet and 60% dry and it aims for a 3.5-year payback on site refurbishments. In December last year, Oakman completed a £5.5m fund raising. Borg-Neal said: “The decision by the government in the 2012 Autumn Statement to extend the Enterprise Investment Scheme provided the opportunity we needed. In February this year we launched a new EIS fund-raising round. Our initial target was £4.5m, but due to impending acquisitions we upped the target to £5.5 million. The entire sum was finally realised on 29 November 2013.”