Story of the Day:
Christmas sales at Living Ventures up 43%: Christmas sales at Living Ventures Group, the company behind the Gusto and Blackhouse Grill chains, were up 43% over the same period in 2012, thanks to new six openings and a 9% rise in like-for-likes. The news came alongside results for the 53 weeks to March 31 2013 that saw total group income rise by 23% to £47.3m as Ebitda rose 39% to £4.1. Profit before tax, after all interest payments, was £1.55m, an increase of 315% year-on-year. Tim Bacon, Living Ventures’ chief executive, said: “Our results speak for themselves. We are delighted with the progress of the business and are confident of making further progress in the current year. We believe that we now have the constituent parts for an offer that can be applied in other cities other than Manchester.” The company now runs 30 casual dining restaurants and two fine-dining outlets, including ten outlets in total in Manchester. It plans to grow into a £100m company, recreating its success in Manchester in other cities, as well as expanding into London. Its Gusto chain, now up to nine outlets in the north west of England, saw total revenues rise 7% to £16.1m. Average spend per head during the year was £21. Blackhouse Grill, now up to seven outlets, one in London, five in the north of England and one in Glasgow, recorded a rise in revenues of 5% to £14.2m. Average spend per head was around £30. The New World Trading Company, currently up to four outlets in Leeds, Manchester, Alderley Edge and Liverpool serving barbecue and rotisserie food, local ales and cocktails, saw revenue for the year rise from £1.0m to £4.5m after two openings. Venture capitalists Hill Capital put up £2.7m for the brand’s development in early 2013, and it has a “strong” pipeline for 2014. Living Ventures also runs three bars under the Alchemist brand, two in Manchester and one in Leeds, with a London outlet, among others, lined up for 2014. Its first fine-dining outlet, Australasia, in Manchester city centre, which opened in 2011, reported sales up 38% year-on-year to March 2013. A second fine-dining outlet, Manchester House in Manchester, opened in September last year.
Industry News:
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 London Hotel, Lancaster Gate, 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.
Propel Quarterly Spring edition out first week in March: The Spring edition of the must-read-and-keep Propel Quarterly magazine is published in the first week of March. To advertise, e-mail Sharon Dickinson on
sharon.dickinson@propelinfo.com.
Starbucks admits its mobile payment app stored users’ details in clear text: Starbucks has admitted that its iPhone mobile app, the most used mobile-payment app in the United States, has been storing usernames, emails and passwords in clear text. The information is stored in such a way that anyone with access to the phone can see the passwords and usernames by connecting the phone to a PC. The clear text also displays geolocation tracking points. Computer experts said the vulnerability was apparently a triumph of ease of use over security: while Starbucks could have chosen not to store the password on the phone, users would then have been forced to key in their username and password every time they wanted to use the app to make a purchase. Instead, the password is only needed when money is being added to the app. After the security hole was discovered by a security researcher, Daniel Wood, and published last week, Starbucks’ chief digital officer in the US, Adam Brotman, said the issue should no longer be a concern because “we have adequate security measures in place now.” He declined to say what those measures were but declared that customers’ usernames and passwords were safe because “Starbucks has added extra layers of security.” Curt Garner, Starbucks’ chief information officer, said: “There is no indication that any customer has been impacted by this or that any information has been compromised.” However, he said: “Out of an abundance of caution, we are also working to accelerate the deployment of an update for the app that will add extra layers of protection. We expect this update to be ready soon.”
Pizza Hut launches ‘lighter, airier, more imperfect’ pizza: Pizza Hut has launched a new, lighter, airy version of its best-selling hand-tossed pizza in the US. It is offering to pay for any consumer’s next pizza if they do not like the new “Hand-Tossed” crust. “We set out to completely blow up the notion that all pizzas are created equal,” said Carrie Walsh, chief marketing officer at Pizza Hut. The new hand-tossed crust will have “noticeable imperfections” such as air pockets that makes each pizza “truly one of a kind,” he said. The crust is brushed with a garlic-buttery finish and topped with mozzarella. Under current pricing, the pizza sells for $10, any size.
US restaurant sales forecast to grow 3.6% in 2014: The National Restaurant Association has forecast US industry sales to grow in 2014 for the fifth consecutive year, to $683bn, despite consumer sentiment that remains less than robust. In its “Restaurant Industry 2014” forecast and trends report, the NRA said it expects that in 2014 restaurant sales will grow 3.6% from $659.3bn in 2013 at about 990,000 restaurants, which is an increase in units of about 1% over last year.
Wagamama likely to be closed for seven weeks because of floods: Wagamama in Guildford has been closed for three weeks due to flooding, and will be shut for a further four weeks because it is undertaking a full refurbishment after water damage. Guildford Council may buy its own flood defence barriers after emergency barricades were installed to prevent further flooding from devastating the town centre. The barriers were put up next to Debenhams in front of the River Wey, which has twice burst its banks resulting in water pouring into shops, restaurants and pubs. One outcome of assessing the damage is that sandbags may be positioned around the town, and the council will look at whether it can buy its own long-term flood defences.
Company News:
Costa Coffee to open Birmingham’s first drive-through coffee shop: Costa is set to open Birmingham’s first coffee drive-through at Five Ways Edgbaston, Birmingham, after coming to an agreement with landowner Calthorpe Estates. Planning has been secured to extend and develop an existing 1,575 sq ft listed building located at the gateway entrance to the Calthorpe Estate on Calthorpe Road. A full refurbishment of the site will take place as part of the £1.1m construction programme, which will result in a 3,064 sq ft coffee shop, with dedicated drive-through facilities and 11 car parking spaces. The development is scheduled to start in the spring, with the launch of the store expected in the summer. Meanwhile Costa has signed leases on six out-of-town stores at retail parks. The stores are at the Carlton Centre, Barnsley; the Valentine Retail Park in Lincoln; Island Green Retail Park in Wrexham; the Vangarde Shopping Park and Monks Cross Shopping Park in York; and a new-format drive-through store at Meadowhall in Sheffield. The units range in size from 1,500 sq ft to 2,165 sq ft, with rents ranging from £43,000 a year upwards. The Lincoln and Wrexham stores opened just before Christmas. and the York and Sheffield stores are scheduled to open later this year.
Jamie Rollo – we expect Wetherspoon like-for-likes of 2%: Morgan Stanley leisure analyst Jamie Rollo says he expects JD Wetherspoon to report 2% like-for-likes this coming Wednesday, when it unveils second-quarter trading. He said: “We expect the company to report solid like-for-likes sales growth of circa 2%, slightly below Q1’s 3.7% due to tough comps. The industry generally faces weak comps in the period from poor weather last year, with Coffer Peach reporting like-for-likes up 0.4% across November-January 2012. However, Wetherspoon’s trading held up well throughout the poor weather, with Q2 2013 like-for-like sales up 8%, the strongest year-on-year growth in a quarter since 2007, with comps getting easier from Q4. Christmas fell on a Wednesday last year, which usually benefits pubs, as they effectively get an extra weekend, and we will look for strong Christmas trading. For the full year, we expect like-for-like growth of 3%, below 2013’s 5.8% but with underlying trading robust given tough comps.”
Ex-multiple operator and Star Pubs invest in Newcastle site: Newcastle entrepreneur David King the former owner of Fluid Group, which ran coffee houses, gastro-pubs and bars such as Barluga and Central Bean, has signed up with Star Pubs & Bars to jointly invest £250,000 in a landmark bar in the city centre. The bar, currently known as LYH, will revert to its original name, City Tavern, when it reopens in March. It is the first venture for King’s new company, Bar Hound, which, as well as running bars, is a licensed trade and leisure design company. King, who sold Fluid Group early last year, said City Tavern “will be a showcase for Bar Hound’s design expertise”. Chris Jowsey, trading director of Star Pubs & Bars, said: “We’re delighted that David, with his wealth of experience of running successful bars, restaurants and coffee houses, has taken on City Tavern and that together we are investing in its long-term future. Pubs like this need ongoing investment to ensure they continue to appeal to customers and their fast changing tastes and needs.”
Kornicis report 5.5% festive period like-for-likes: The London wine bar and restaurant operator Kornicis Group achieved a 5.5% increase in like-for-like sales in its City of London and Canary Wharf heartland in the five week period leading up to Christmas and the new year. Total sales for the group showed a 7.2% increase, marking the fifth consecutive year of strong growth in the festive period. Despite a continued challenging trading environment, Kornicis has now delivered compound sales growth of 5% per annum over a five-year period. Group chief executive Nick Tamblyn said: “The quality of our product offering and the strength of our brands enabled Kornicis to deliver another strong set of December numbers. Our staff have worked tirelessly to ensure our customers had first rate festive experiences, with guest feedback reaching new levels. The strong Christmas results set Kornicis up well for further acquisitions of London sites in 2014, and we look forward to continue building our strong product offering and loyal customer base.”
Just-Eat ‘planning £800m float’: Just-Eat, the online takeaway food ordering company, is planning a supermarket float that could value it as high as £800m, according to The Sunday Times. The company takes a 10% slice from each take-away purchase made through its systems and charges restaurants a fee for listing on its site. Just-East, founded in Denmark in 2001 but based in London, saw revenues nearly doubled to £60m in 2012, with income rising sharply again last year, The Sunday Times said. Last year it processed £700m of takeaway orders in 13 countries. It has hired JP Morgan and Goldman Sachs to explore a share offering that could be launched in the first half of this year, the newspaper said. Its backers, which include Index Ventures, an investor in Skype and Dropbox, and Greylock Partners, which invested in Facebook and LinkedIn, have put a price tag of between £600m and £800m on the company, The Sunday Times said.
Norfolk multi-siter buys former Oxford Inns coaching inn: The Norfolk multi-site operator Iain Wilson has acquired the 23-bedroom Old Brewery House hotel, a coaching inn in Reepham, Norfolk that has been closed since last year. It was formerly operated by Oxford Inns and Hotels. Wilson owns the Byford’s cafe, shop and “posh B&B” and The King’s Head in Holt, The Pigs pub at Edgefield, and Sponge, a Holt-based cakes business, and co-owns The Assembly House in Norwich. He is understood to have paid around £1m for the hotel and plans to invest a further £2m. Wilson said: “We’re looking to expand and were looking for somewhere local. Reepham’s a beautiful town and the building’s grade two listed. It could be potentially fabulous – it’s got lots of charm and character – but it needs significant investment.” He estimated it would be about nine months between buying the building and re-opening it.
Multi-siter and Punch invest £300,000 in Crewe pub: The Lifeboat Pub Company, led by Tim Joudrey, and Punch Taverns have made a £300,000 co-investment in a canal-side pub, The Shroppie Fly, at Audle, Crewe. The pub has a new menu, with home cooked mains including chargrilled and brasserie specialities. Joudrey said: “I can’t believe the transformation, the customers love the fresher look but are really pleased that we have kept the authenticity. They particularly like the historic memorabilia, which has been collected from boaters and historians. I believe we have created a great environment for all. We have been overwhelmed by the support from local residents and they are happy to have their pub back.”
JD Wetherspoon lines up Sheerness site: JD Wetherspoon is lining up a new opening in Sheerness town centre, Kent (population: 13,000). The company is hoping to open a branch in the former Brittain & Hobbs electrical store in the High Street, which will be called The Belle and Lion, after a former inn, if it gets the go-ahead. If approved, the pub could create 40 jobs and could take about four months to complete. Details about how the company would convert the building have also been submitted to Swale Council as part of the planning application. The council is likely to make a decision on the proposal on February 13. Meanwhile, building work has started on the first JD Wetherspoon outlet in Ormskirk, Lancashire (population: 24,196) with the new pub, the Court Leet, due to open by July at the latest. Converting the building, a former DIY store, is expected to cost £1.5m and up to 50 jobs will be created at the town centre site. It will have 3,477 sq ft of customer area catering for up to 450 people on the ground floor, and a beer garden is also planned in an outdoor first floor area.
Derby brewery turns its tap into specialist beer and spirit house: The Derby Brewing Company has refurbished its brewery tap and turned it into a “specialist beer and spirit house”, with more than 75 beers and ciders and more than 70 spirits on offer. The pub, originally called The Royal Standard, was reopened in 2008 by Derby Brewing after being shut for almost two years and renamed The Brewery Tap. Now it has been rebranded again, as simply The Tap. Paul Harris, sales and marketing director at Derby Brewing Company, said: “We are delighted to bring Derby its very own specialist drinks venue. We are passionate about our drinks and feel like we have really upped our game in terms of selection. We hope everyone enjoys the new Tap.” The new range of drinks includes beers from the United States, Japan, New Zealand, and Germany.
Nespresso opens first Scottish site with tasting bar: Nespresso has opened its first boutique shop in Scotland, with the new site, in Edinburgh, including a tasting bar. Nespresso’s UK managing director, Brema Drohan, said: “Edinburgh is a global city and is also the capital of Scotland. There’s a global network of Nespresso boutiques around the world and clearly Edinburgh needs to be on that list. We’ve been looking in Edinburgh for a while for the right place and space and I think we’ve found that in Multrees Walk. It’s about having a presence in Scotland, and like the rest of the UK there’s a great appetite here for espresso coffee and good quality coffee.” The site comes after openings in Beijing, London, Moscow, San Francisco and Seoul. The boutique shop is dedicated to Nespresso’s range of 21 “Grand Cru” coffee blends and 30 coffee machine models, and features a tasting bar where customers can sample products, a club room offering a range of privileges and services and a recycling zone where people can drop off their used capsules and learn more about the company’s recycling scheme.
Convivial London Pubs site sold to Hong Kong-based developer for £3.2m: The Clifton Hotel in St John’s Wood, North London, one of the seven pubs sold at the end of last year by Convivial London pubs, was bought by a Malaysian lawyer based in Hong Kong for £3.2m, it has been revealed. The pub had been on the market for £2.9m through agent Christie + Co. It is understood the estate sold for around £20m, £4m more than the guide price. More than 1,600 people have signed a petition to reopen the pub for the community. Agents representing the new owner, named in Land Registry documents as Kay Ian Ng, said his intention was to let it as “a going concern”, but gave no timescale. Convivial bought the pub for £2.6m in 2006, before the property market crash. The group disposed of it and six other London pubs last year and went into voluntary liquidation last week.
Brothers add to pub holdings: Brothers Myles and Brian Scullion have added to their holdings in Northern Ireland with the acquisition of Harry’s Bar in Banbridge, County Down, formerly owned by the Quinn family. They are operating Harry’s Bar as tenants, after the freehold was bought by unidentified investors who also acquired the freehold of two former Botanic Inns bars, The Parador and Ryan’s, last year. The brothers also operate the Halfway House near Banbridge and The Seagoe Hotel in Portadown, County Armagh. Myles Scullion said: “Harry’s Bar is probably the best bar in Banbridge. We are originally from Banbridge, and knew the former owners. It has a good food trade.” The Quinn family are in the process of selling two of their remaining three assets in Banbridge, The Coach, on the market through agents Osborne King with a guide price of £975,000, and the Iveagh Movie Studios cinema, priced at £1.5m. They are still running a third pub in the town, AJ Quinn & Sons.
Zizzi reopens after first refurb in 11 years: The Zizzi restaurant in Suffolk Square, Cheltenham has reopened after a six-day closure for its first refurbishment in more than a decade. The restaurant now has new furniture, better lighting and two walls illustrated with themes based around Cheltenham Racecourse. One wall has pictures of racehorses, the other shows race-day crowds. General manager Daria Wisniewska said: “It now looks a lot better, as it hadn’t been refurbished for about 11 years. It is now more of a 21st-century restaurant.”
BrewDog reveals site of proposed Cardiff bar: The Scottish-based brewer and bar owner BrewDog has applied to open a new bar at 31 Westgate Street, Cardiff, in premises formerly occupied by the Double Super Happy dim sum restaurant. BrewDog has submitted a licensing application to Cardiff Council to sell alcohol from 9am to 11pm Sunday to Wednesday; 9am to 11.30pm on Thursdays; and 9am to midnight on Friday and Saturday. It is also seeking permission for food to be served late on Thursdays, Fridays and Saturdays. The site of the proposed new bar is in the heart of the Welsh capital and close to several other outlets known for their beer offer, including Urban Tap House, Zero Degrees, Queens Vaults and the City Arms. Cardiff was one of several cities that BrewDog announced last year it was targeting, with others including Liverpool and Sheffield.
Glasgow brewery plans £7m new plant: West, the craft microbrewery, bar and restaurant at Glasgow Green, has applied for planning permission for a £7m new brewery on the east side of the city, on land owned by the regeneration agency Clyde Gateway. Last year Heidi Beers, West’s parent company, received £1.85m from the Scottish government’s Food Processing, Marketing and Co-operation scheme to help move the 70% of its production taking place in Germany to a new facility in a former whisky cooperage in Port Dundas, on the north side of Glasgow, capable of brewing 50,000 hectolitres a year. The latest plans for a new brewery, at a site on London Road, Glasgow, on the city’s eastern boundary and close to the M74, include a tasting facility. No one from Heidi Beers was available for comment, but a Clyde Gateway spokesman said: “I can confirm that Clyde Gateway has been in discussions with the owner of West Brewery and a planning application has been submitted for a development on land within our ownership.”
Purple Pig gets Stockton go-ahead: A new Purple Pig restaurant has been given permission to open in a Grade II listed building on Yarm High Street, Stockton-on-Tees. The Purple Pig, described as “offering something different to any other restaurant on Yarm High Street”, will be based in the three-storey Winpenny House. The unit was previously in use as Arts Bank galleries. Stockton Council’s planning committee was told the proposals were for “a modern, contemporary, casual dining experience”, and the business would employ five full-time and two part-time staff. A Purple Pig trades in Edinburgh.
BrewDog plans first off-licence opening in March: Brewer and bar chain owner BrewDog says it expects to open its first BottleDog off-licence in London in March. Co-founder James Watt, speaking a day after the company launched a bar in Sao Paulo, Brazil, said the first BottleDog will be based in the King’s Cross area. It will retail BrewDog’s beers as well as other brews from around the world. Watt said BrewDog was currently going through the planning process for the London outlet, but he did not foresee any objections to combining beer tasting and retail because the shops will not be late-opening. The plan for a chain of BrewDog off-licences was unveiled in June last year, with an original deadline for the first opening of October. Another three or four are pencilled in for this year, with the company looking at sites in Aberdeen, Glasgow and Manchester. The shops will be in BrewDog’s “industrial decor” style but will include a space for sampling. Watt said: “We are trying to re-imagine what the concept of a beer shop should be.”
Subway franchisee and ad fund board chairman opens second site: Roy Coulter, chairman of Subway UK and Ireland’s franchisee advertising fund board, has opened his second Subway franchise, in Ipswich. Clouter said: “This site has been six years in the making because I have been negotiating with the land agents for some time. It has been tough as a result of the recession and I couldn’t fulfil my dream with this site but now the timing is right and I am delighted to have completed the site.” The store will bring 15 new jobs to the area. RBS has provided undisclosed loan facilities to support the acquisition and development of the site, on Cardinal Park. Tracy Westley, relationship manager at RBS, said: “Roy has worked extremely hard over the years and never gave in and we are delighted to have helped him to realise his goal with this site.”
SSP reports turnover up 5%: The travel food and beverage specialist SSP Group posted sales of £1.83bn in the year to 30 September 2013, an increase of 5% year-on-year. Like-for-like sales grew by 4.3%, thanks to strong performances in Asia Pacific, Eastern Europe, the Middle East and Scandinavia, the company said. There was strong underlying Ebitda growth of 10% to £152.7m. Operating cash flow generated stands at £59m, with net cash flow after interest of £25m. SSP’s chief executive, Kate Swann, said: “2013 was a good year for SSP, and we have delivered a strong performance against the backdrop of an improving travel sector. The new financial year has started well, and the long-term growth of the global travel markets, our broad geographic footprint, our investment plans and our healthy pipeline of new business opportunities mean that, despite the uncertain outlook in some parts of the world, we remain confident in the company’s prospects for 2014 and beyond.”
Craft brewing contracts boost profits at maltster: The Stowmarket-based maltster Muntons saw turnover for the year to 28 September 2013 rise 26% to £101.9m after it turned away from commodity-priced contracts and increased its dealings with distilling and craft brewing markets. Muntons, which is chaired by Paul Wells, executive chairman of the Bedford-based pub retailer and brewer Charles Wells, also announced pre-tax profits of £3.5m, a turnaround from a loss of £621,000 in 2012. Alan Ridealgh, group managing director of the company, said the success of the distilling industry had been paramount to its success, but that this had been well supported by growth in the craft brewing sector. “2013 was our year of re-growth,” he said. “It followed a year during which we moved away from supplying commodity customers so it was important we showed in our results that our strategy was working.”
Whitbread sells Premier Inn to Villa Group: The Premier Inn at Kirkham, Lancashire, off Junction 3 of the M55, has been sold by the Whitbread group to a businessman who runs the club catering for Preston North End football club. The 28-room hotel has been acquired for an undisclosed sum and will now undergo an extensive refurbishment and rebranded to The Villa Express. The purchaser, Simon Rigby, is the owner of the 31-bedroom Villa hotel at Wrea Green, near Lytham. His Villa Group runs an outside catering company, The Villa Outside and sells its own brand of food under the Villa Finest brand. Rigby plans to open a new Lake District venue, The Villa Levens, a luxury hotel and wedding venue near the village of Levens, in the spring.
Family brewer attacks ex-pubs minister over pubco proposals: The head of a leading family brewer has launched a scathing attack on the former pubs minister Bob Neill after the MP called for pubco tenants to be given a free-of-tie option by their pubs’ owners. In an open letter to Neill, Peter Furness-Smith, managing director of McMullen & Sons, the Hertfordshire-based brewer that runs 140 pubs, said: “How depressing to hear a former ‘pubs minister’ come out in support of government intervention into the pub tenanted market. You, of all people, should know that numerous constructive measures have been taken by all pub owners and this market is now working as well as ever. As is often the case with politicians, like the former definition of an accountant, you appear to get immense satisfaction from arriving at the scene of a battle once it has been won and bayoneting the wounded!” Furness-Smith’s attack came after Neill wrote a letter to the Business Secretary, Vince Cable, urging him to amend the draft statutory code for pub companies to include the “market rent only” option, giving tenants the choice of a free-of-tie tenancy with an open market review. Neill said the option “offers the only mechanism that can transform the fortunes of thousands of landlords across the country.” However, Furness-Smith said that while politicians wished to blame pub owners for the plight of tenants whose pubs have failed, the government was “still taking, in one tax or another, over 40% of turnover from an average community pub and has increased the tax burden (the largest cost of running these pubs!) since 2006 by some 30% at a time when trading has been challenging and average pub profits have been, at best, flat.” Meanwhile, he said, “Over the last six years, pub owners have responded to the plight of our tenants, our business partners, by reducing rents and improving trading terms. Unlike commercial leases, tied agreements align the interests of pub owners with tenants to make a success of pubs. It has been in the interest of pub owners, therefore, to be supportive and helpful to our tenants, unlike government, who have continued to increase taxes and load yet more bureaucracy into the system. These measures of support, implemented by property owners, have cost all pub companies considerable sums, and, in the case of McMullens, over 50% of our tenanted division profits. May I respectfully suggest, therefore, that our political elite look at your own appalling record on excessive taxation of pubs before blaming and punishing pub owners who have been helping our tenants, particularly when times have been challenging, and in the process taken massive hits to our P&L accounts. If ministers really cared, and had responded as favourably as pub owning companies to the plight of pub tenants, the industry would be in a strong position to play an even greater part in helping to restore our economy.”