Industry News:
Central London rent and premiums rising to record levels: Rents and premiums are rising to record levels in central London, according to expert David Abramson, managing director of the West End property agent Cedar Dean Gilmarc. Speaking at the Leasehold Finance seminar organised by the lending specialist First Merchant, Abramson said: “London is on fire – new restaurants, new concepts. The hottest areas, where we are getting the most enquiries, are Soho, which has seen a big explosion, driven by tourists and office workers and a diversity of operators, Covent Garden, Mayfair, the South Bank around the Royal Festival Hall, Waterloo and Borough, and ‘NoHo’ – Marylebone Great Portland Street, the ‘north of Oxford Street’ area. But rents are a massive issue.” Abramson quoted a 6,000 sq ft corner property restaurant site just off Oxford Street with a rent of £275,000 a year, but a premium to buy the lease of between £1.5m and £2m, “which is a lot of money to come up with”, and compared it to an 8,000 sq ft restaurant around the corner on Oxford Street itself on a new lease with a quoted rent of £2.3m. “If you’re paying a high rent, with the upward-only rent reviews in this country, you will never pay less than that. It will hit your Ebitda every year – lower Ebitda (equals) lower profit and lower valuation. If you pay a premium, you can amortise that, write it off over the years. In certain streets, St Martin’s Lane, Leicester Square, Kensington High Street, the rents are starting to get difficult. So why are premiums and rents rising? There are credible operators really underpinning this market, people like Richard Caring, Charles Dunstone, funding Five Guys, Hutton Collins paying £100m for Byron Burgers, and they’re willing to pay significant premiums, and high rents to get the right locations. These are serious operators and they believe in the sector. Then you’ve got all the international guys, who all want a piece of it: we have calls all day from people asking, ‘have you got anything in Mayfair, have you got anything in Covent Garden’.”
London Evening Standard – Richard Caring to collect £260m war-chest to invest in London restaurants and nightclubs: The London Evening Standard has reported that sector investor Richard Caring is about to realize a £260m war-chest to invest in London restaurants and clubs. A swath of Camden Market has been sold in a £400m deal. Caring is also on the point of selling Wentworth golf club for about £160m. He a 25% stake in the market. That means he stands to collect a total of about £260m. The newspaper said: “The news will send shockwaves through London’s already hugely competitive restaurant scene, where prime sites are bid up to record levels when they come on the market.”
Oxford plans 287,500 sq ft of new cafe and restaurant space: Oxford City Council has approved outline plans for the £500m redevelopment of Westgate Centre and adjacent land that will include 287,500 sq ft of new cafe and restaurant space, approximately 100 new shops, including the city’s first John Lewis department store, approximately 65,000 sq ft of leisure uses including a cinema, and between 27 and 122 new homes. The new Westgate will create two new public squares, provide two 24-hour east-west pedestrian routes and one 18-hour north-south pedestrian route through the site. Bob Price, leader of Oxford Council, said: “The redevelopment of the Westgate Centre is long overdue and our retail offer has failed to keep pace with the expansion of the local economy.” The scheme is a joint venture between the Crown Estate and Land Securities. A detailed planning application is expected later this year.
ALMR praises common sense approach to World Cup hours: The Association of Licensed Multiple Retailers (ALMR) has applauded the government’s decision to consult on extended licensing hours at the forthcoming World Cup Finals. The government yesterday published the consultation that seeks views on extending licensed hours for England’s 2014 World Cup matches. The ALMR’s strategic affairs director, Kate Nicholls, said: “We are pleased to see the government employing common sense in looking at the idea of extending licensing hours for the forthcoming World Cup and recognising the vital role pubs and bars have to play during significant sporting and cultural moments such as these. An extension to licensing hours will give fans a chance to enjoy the match in a responsible, supervised environment. A decision to extend the hours will also provide pubs and bars across England and Wales with a chance to capitalise on a great sporting occasion without having to resort to the unnecessary burden of a Temporary Event Notice. Applying for TENs to cover each of England’s three group stage matches would cost the trade in excess of £1.5m and create a wholly unnecessary deluge of tiresome, costly red tape.”
McDonald’s in US faces worker pay lawsuits: Employees of McDonald’s in three states in the US are taking the company and its franchisees to court alleging they were the victims of systematic wage thefts. The allegations, in six suits filed in Michigan, California and New York, claim McDonald’s and its franchisees illegally underpaid employees by forcing them to work “off the clock”, not paying overtime and deleting hours from their timecards. Other allegations include claims that employees were told to come to work, only to have to wait without pay until enough customers showed up, and employees not being reimbursed for the time and cost of cleaning their uniforms. Joseph Sellers, the lawyer in the lawsuits filed in California and New York, said: “Despite reaping tremendous revenues and profits thanks to the labours of crew members who earn at or just above minimum wage, McDonald’s is unlawfully failing to pay its workers for all the hours they work.” McDonald’s said it was reviewing the allegations.
Company News:
Scotland set to get 50 Harry Ramsden’s in next five years: Harry Ramsden’s, the fish and chip shop brand, has granted the franchise for Scotland to Sevenseas Ventures Limited. Under the terms of the franchise agreement, 50 new outlets will open across Scotland by 2019. These will include a mix of full-service 100-seater-plus restaurants with takeaway facilities and new “traditional locals”. A number of sites across the country, including in Aberdeen, Glasgow, Edinburgh, Dundee, Ayrshire and the Highlands, are already being explored and assessed for their suitability as the locations for the first openings later this year. Currently Harry Ramsden’s operates 24 outlets, with just three located in Scotland. Harry Ramsden’s chief executive, Joe Teixeira, said: “When you consider that, over the past two years, Harry Ramsden’s has been enjoying record sales as a result the brand’s evolution, which includes a contemporary new look and a greatly enhanced menu offering, this is the ideal time to increase our presence across Scotland. We are extremely hopeful that there will be more announcements of this type in the coming months and anticipate up to 250 new outlets opening within the next five years.” The directors of Sevenseas Ventures, which was incorporated last month with registered offices in Giffnock, Glasgow, are Dhami Satinder and Hans Jagdeep Singh. A spokesperson for the company said: “There is untapped potential to establish Harry Ramsden’s in Scotland, as there is no recognised brand leader currently operating in the Scottish fish and chips marketplace.” Harry Ramsden’s recently signed a franchise agreement which will see 50 new outlets open in Yorkshire by 2018, creating up to 500 jobs. In addition, the brand is currently in the early stages of a partnership with one of the UK’s leading motorway services operators that has resulted in the opening of Harry Ramsden’s outlets at Welcome Break services in Woodall and Oxford.
YO! Sushi plans five London area openings: YO! Sushi has lined up five new London area restaurants. The new openings come after a decade-long expansion outside London, with key sites now established in Manchester, Leeds, Edinburgh and Glasgow totalling 67 in the UK and 11 restaurants internationally. The new sites launching this summer are in Baker Street, High Street Kensington, Richmond, Kingston and Heathrow T2. All the locations have been picked for their prime locations garnering high footfall. The new restaurant at Baker Street tube station, for instance, will benefit from 27 million people passing through the station each year. Vanessa Hall, chief operating officer of YO! Sushi, said: “YO! Sushi opened its doors in Soho, London for the first time in 1997 and with over 17 years’ experience of bringing sushi to the masses, we’re excited to increase our offering in the hustle and bustle of one of the most competitive dining markets on the planet. London presents YO! Sushi with a wealth of opportunities, as there is huge demand for our unique, fun and casual kaiten dining experience. With 30 out of 76 UK restaurants inside the M25, YO! Sushi is really setting the pace as it continues to evolve alongside the capital city.”
Yummy sees February like-for-likes rise 15%: Yummy Pub Co, the four-strong south east of England gastro-pub operator, has reported like-for-like sales up 15.6% across its sites for February. Co-founder Tim Foster wrote on the company blog that the Somerstown Coffee House in Euston, North London and The Grove Pub and Inn in Upstreet, near Canterbury, were the front runners, with The Gorringe Park in London Road, Tooting, South London and The Wiremill in Newchapel, near Lingfield, Surrey coming in a close third and fourth respectively. Foster said: “It was looking like we were going to hit low-to-medium 20 percents until the idiots who run our road infrastructures decided to close the only road to get to The Wiremill for a staggering five days, no less.” However he added: “Maybe shutting the road helped us beat Mother’s Day 2013 on a standard Sunday – or maybe it was the lovely weather? Either way, the team, half the size it would have needed to be, worked their socks off and handled the expectations of our customers admirably.”
Oakman Inns to evolve Beech House concept at second opening: Peter Borg-Neal, chief executive of Oakman Inns and Restaurants, has told the Propel Multi Club Conference that he plans to evolve The Beech House brand at its second opening in St Albans, which is due to open in late summer. He said the concept, which debuted in Beaconsfield, will see more artisan products, a more focused range of products and an even stronger focus on all-day trading.
Wetherspoon ‘in talks over outlet in Brigg’ – newspaper: JD Wetherspoon is in discussions to open its second in North Lincolnshire, in the town of Brigg (population 5,076), according to the local newspaper, The Scunthorpe Telegraph. The newspaper said a £1.3m-plus investment has been earmarked for Brigg, although “the site has not yet been identified.”, and trading hours would be from 8am until midnight, seven days a week, in line with the company’s other 910 outlets. However, Wetherspoon spokesman Eddie Gershon told the Telegraph: “We will not comment on individual sites.” Gershon added that the company intended to open a further 50 pubs this year “in good locations”, offering customers at least 3,000 sq ft of space. Wetherspoon opened The Blue Bell in Scunthorpe town centre in 1999, after spending £1m converting former shops.
Bill’s announces two more April openings: Bill’s, the restaurant chain owned by sector investor Richard Caring, has announced two more openings in April to add to the site lined up in a converted pub in Eastbourne, Sussex, due to start up at the end of next month. The chain is moving in to a site just off the main high street in Lime Hill Road, Tunbridge Wells, Kent, on 7 April, and Riverside Walk in Kingston upon Thames, Surrey, a 170-cover restaurant, on 14 April. The company, which recently won the Best Restaurant Concept title in the Retailers’ Retail awards 2014, has also added to its line of Bill’s branded retail products. It has four new lines: Bill’s Teas, in Breakfast, Earl Grey, Green, Peppermint and Bramble Berry varieties at £5.95 a tin; Bill’s Truffles, in Pink Marc de Champagne, Black Forest Gateau and Red Velvet Cupcake flavours, at £10.95, made by the chocolatier Prestat; Bill’s Chocolate Bars, again made by Prestat, in Milk Chocolate, White Chocolate Eton Mess, Dark Chocolate with Salted Almond, and Earl Grey and Citrus Milk Chocolate flavours, at £2.50 a bar; and Bill’s House Dressing, made by Lucy’s Dressings, at £2.95 a bottle.
Just Falafel launches loyalty app: Just Falafel, the UAE-based fast-food operator, has launched a loyalty app for its UK outlets that comes pre-loaded with vouchers worth £10 when it is downloaded from iTunes or Google Play. The app lets customers use their JF code in-store to earn loyalty points, get their ninth falafel free and redeem coupons. The chain now has five stores in the UK, 21 in the UAE, and around 25 in other countries including Australia, Canada and the United States, as well as Oman, Qatar, Saudi Arabia, Egypt, Jordan and Turkey. It claims to have development agreements signed for more than 900 new outlets.
Weston Castle takes three pubs with Star Pubs & Bars: The north west of England multiple operator Weston Castle has signed three-year leases on three pubs with Star Pubs & Bars: The White House at Irlam, The Old Bridge House in Blackpool and The Station Hotel, Altrincham. All of the sites are wet-led community locals in good locations which are trading well. Before the deal, Weston Castle’s estate consisted of 25 freehold and two long-term leased pubs, and this is the first time that it has taken on pubs on shorter term, non-FRI leases. Chris Tulloch, Weston Castle’s managing director, said: “We like the Heineken brand range and have a good relationship with the company stretching back over a number of years on the freehold side of our business. These pubs fit our estate profile perfectly and it felt the right time to extend our partnership and try the leased pub model with Star Pubs & Bars. It’s a great way of expanding our business with a lower capital investment than required with freeholds and enables us to tap into some really good support, from marketing and retailing expertise to deals such as 30% off Sky.”
Former Bel and Dragon owner sells Notting Hill pub: Gareth Lloyd-Jones, the former owner of the Bel and Dragon chain and chief executive of Gourmet Holdings has sold the remainder of a 20-year free of tie lease on The Pelican pub in Notting Hill, West London which started in April 2012 to the private operator Alli Kyle for an undisclosed sum through the property agent Davis Coffer Lyons. Lloyd-Jones continues to operate two neighbourhood dining pubs in Central London, the Canonbury and the Hansom Cab, as well as the Spencer, the Althorp and the Bridge House in South West London. The new owner is looking to reposition the pub to attract a younger, edgier audience, rebranding the venue the Red Lemon and carrying out extensive redecoration to give the space a light and open feel. The furniture will be replaced with Chesterfield sofas and paintings by local artist Joseph Hartley, all of which will be for sale, will adorn the walls. Chris Bickle, associate director at Davis Coffer Lyons said: “This is one of London’s most sought after and diverse suburbs, and the pub is just a short distance from the famous Portobello Road; nearby operators include hot-spot Rum Kitchen. Free-of-tie leases like these continue to attract interest being a rarity of sorts in the capital.”
Domino’s to stress quality ingredients in new marketing campaign: Domino’s Pizza has unveiled a new marketing campaign, spanning TV, VOD, mobile, PR and social media, to promote the quality of its ingredients and bring to life the fact that every pizza is made by hand and made fresh to order. The campaign kicks off with a 30-second TV ad which shows the pizza-making process played back to front, from slices of pizza in the hand of a hungry family, all the way to a single ball of fresh dough. Even the signature soundtrack from the previous “Greatness” ad is played in reverse. The latest TV commercial which runs throughout March until 13 April, aims to reach a national audience across both terrestrial and digital channels, in an attempt to tap into family customers where weekend orders are key. Jane Walker, head of marketing at Domino’s, said: “Last year we handmade over 65 million pizzas, so we wanted this campaign to demonstrate how each and every one of these is made to order from fresh, hand-stretched dough and tasty, quality toppings.”
Giggling Squid offers young reviewers change to win meal for four: The Thai restaurant chain Giggling Squid is offering young would-be food writers a chance to win a free meal for four in exchange for writing a review of one of its outlets. The chain is running the promotion in conjunction with the Guild of Food Writers Young Food Writer Competition 2014. The competition is open to anyone aged 11 to 18, and the prize is a meal for four at a Giggling Squid restaurant. It is run in parallel with the Guild’s competition, as the chain, which now has ten restaurants, encourages entrants to choose one of its restaurants as the subject of their article. The Guild’s Write It competition invites entrants to submit a non-fiction feature of around 750 words on any food-related subject, be it a restaurant review, a report on a visit to a farmers’ market or food shop, a campaigning article on any aspect of food that “interests, excites or frustrates the young writer”. The winner will receive a library of the books shortlisted for the 2014 Guild of Food Writers’ Awards and a visit to the delicious magazine test kitchen.
Spirit sees fourfold leap in licensee applications for leased pubs: Spirit Leased Pubs, which was launched as a separate wing of Spirit Pub Co two years ago, has seen a four-fold increase in licensee applications in the first three months of 2014. The company, which controls 450 pubs, said it attributed the rise to its flexible and innovative approach to agreements and its commitment to on-site training for the whole team in a pub. As a result of the rise in applicants, it said, it now finds itself receiving multiple applications for its pubs across the board. Chris Welham, managing director at Spirit Leased Pubs, said: “It’s been a phenomenal year for Spirit Leased Pubs so far. I’ve no doubt that the sharp uptake in applications is down to the reputation we’ve built for developing with our licensees innovative and flexible agreements. Given the hard work going in to our in-pub training and menu and food packages, this trend is only going to continue.” Multiple operator Sean Flynn, of London Metropolitan Tavern, who has taken on four Spirit Leased sites in the past 12 months, said: “It’s no surprise that Spirit Leased Pubs are experiencing such a boost in applications. Their partnerships with operators and investment into sites truly set them aside from other pub companies. They are a privilege to work with.” Earlier this year, Spirit Pub Co was listed in the Sunday Times’s Top 25 Best Big Companies to Work For, coming in 16th place, and scoring notably high in the Managers category.
M&B backs bees initiative: Mitchells & Butlers is helping to save bees with the launch of Planetbee, a fresh, South African Chenin Blanc, with 50p from each bottle sold donated to the Friends of the Honey Bee fundraising campaign, set up by the British Beekeepers Association. The crisp dry wine, costing £20 to £25 a bottle, launches in All Bar One sites this week, followed by a roll-out in May in more than 120 of M&B’s Country Pub sites. The BBKA initiative is hoping to counter the declining bee population in the UK. Money raised will help by funding research to combat the deadly varroa mite, which infests hives and destroys honey bee colonies. It will also be invested in nationwide projects aimed at increasing the number of pollen and nectar-rich pollinating flowers, plants and trees that bees need to thrive and prosper. Henry Boyes, wine buyer for Mitchells & Butlers, said: “As soon as we were presented with the concept, tasted the wine and saw the packaging, we were keen to get involved. We are delighted to be able to support this initiative and to be able to do so in a way that is fun, relevant, engaging and hopefully very enjoyable for our guests.”
Sticks’n’Sushi wins Hamburg Foodservice Prize: The Danish restaurant operator Sticks’n’Sushi, which currently has two outlets in London as well as 11 in Copenhagen, has been awarded the prestigious Hamburg Foodservice Prize. The prize, which goes to up to five recipients a year, is awarded annually by the German media group Deutscher Fachverlag, publisher of Foodservice magazine, to honour those companies and personalities in the hotel, restaurant and catering business that set new benchmarks and contribute to the good name of the industry. Sticks’n’Sushi won jointly with Block Gruppe, based in Hamburg, which runs the Block House chain of steak restaurants. Past winners have included Wagamama, Pret a Manger, Starbucks and, last year, Eataly. This is the first time in the award’s 32-year history that it has gone to a Scandinavian company. An independent jury determined the winners, who will be honoured with an award ceremony during a gala dinner held tonight (Friday) in the Hotel Grand Elysee, Hamburg at the end of the International Foodservice forum, which is the largest congress for the professional foodservice industry in Europe. Judges praised the “immensely strong identity and coolness” of the Sticks’n’Sushi brand, as well as its sustainability in procurement and operations and sophisticated employee culture. Sticks’n’Sushi’s restaurants in Covent Garden and Wimbledon are due to be joined by a third in an as-yet unannounced location and a fourth scheduled for the new Crossrail development in Canary Wharf, East London in the spring of 2015.
Butcombe Brewery takes top prize at SIBA Business Awards: Butcombe Brewery of North Somerset beat intense competition to take the title of Overall Brewery Business of the Year, announced yesterday at the organisation’s BeerX event in Sheffield. Judges gave the top title in the SIBA Business Awards to Butcombe for a highly effective campaign to raise the profile of its bottled beers among supermarket buyers, which created standout for the brewery in a crowded market. Butcombe won the Best Marketing and Communications category on its way to taking the overall prize.
Atherton names 1 May for City Social opening: Chef-restaurateur Jason Atherton has named 1 May as the opening day for his first restaurant in the City of London, City Social, on the 24th floor of Tower 42. Atherton currently owns Pollen Street Social, Little Social, Social Eating House and Berners Tavern in London, and other restaurants in Shanghai, Hong Kong and Singapore, with projects on the go in Dubai and Australia. City Social occupies the space previously home to Gary Rhodes’s Rhodes 24. The dining room will seat 90 and the bar another 85, with a separate menu. Atherton told Bloomberg: “I want to bring a bit of Scott’s-style glamour to the City, but with my style of food. I want City Social to be the kind of place where people can just drop in from work for snacks or a dessert. At lunchtime, there will be a menu for around £22 to £25 and there will be a short tasting menu at night.” The head chef will be Paul Walsh, formerly sous chef at Gordon Ramsay.
American diner plans soft launch: A new American diner is undergoing a soft launch from Thursday 20 March, with diners who fill in a customer comment card in the first few weeks being given vouchers exchangeable after the official opening night due to take place at a later date. The Route 66 American Diner in Haverhill, Suffolk has been opened in a former charity shop in the high street by restaurateur Sam Clark, who previously owned Cafe Zafferano in Saffron Walden, Essex. The menu will include burgers, grills and “Tex-Mex favourites”. Clark said the nearest American diner to Haverhill was in Braintree, Essex. He said: “There’s nothing really out there like it – it’s good to do something a bit different.” Clark apologised via his local paper to people he had not been able to email back about jobs: “It’s not been possible due to the sheer volume of responses.”
Americans set to cut amount they spend on dining out: Nearly 30%of American consumers say they intend to spend less on dining out in the year ahead, according to a new survey from the business advisory firm AlixPartners. The result is a drop in the expected average spend per diner of 9.1% per restaurant meal this year, or about $13.55, compared with the $14.91 people in the survey said they spent last year per meal. The percentage of Americans who dined out at least weekly over the past 12 months dropped to 57%, from 60% a year ago, with the number one reason for cutting back on visits, for the second year running, given as a desire to eat more healthfully. The number who said they would be using coupons, promotions and discounts to cut the cost of dining out fell to 49% this year from 56% a year ago, and 60% in 2012. Adam Werner, managing director at AlixPartners, said: “In recent years, consumers have been hit with just about every kind of ‘meal deal,’ ‘two-for-one deal,’ ‘limited-time-only deal,’ ‘not-really-a-holiday deal’ imaginable, and while many such promotions have been quite effective, they may well be less effective going forward. Instead, our survey and in-field experience suggests that consumers today are showing a preference for everyday low pricing and consistent value.” The survey found that lunch has become the battleground for restaurants. While consumers preferred casual dining restaurants for dinner and quick service restaurants for breakfast, lunch was split among segments, with 35% of respondents preferring fast-casual options, 31%t choosing quick service and 27% selecting casual dining. However, grocery and convenience stores are the preferred breakfast source for 13% of consumers, 6% prefer them at lunch, 4% prefer them at dinner, 24% prefer them for late-night dining and 49% prefer them for snacks.
Siba names Supreme Champion beers: A long-established family brewer, an 11-year-old operation based in brewery buildings more than a century old and a microbrewery that makes all its beers from spring water have been declared Supreme Champions at the Society of Independent Brewers (Siba) National Beer Competition 2014. The winners, Fuller Smith & Turner, the London brewer and pub operator, in the keg category for its London Porter, Bristol Beer Factory in the bottled category for its Independence, and Cotswold Spring Brewery, founded in 2005, in the cask category for its Old Sodbury Mild, were unveiled at Siba’s BeerX event in Sheffield. They were chosen from 300 finalists at a judging session on Tuesday which marked the start of BeerX. A panel of around 100 brewers, industry experts, local licensees and beer enthusiasts assessed the beers, which had all earned won a medal at one of Siba’s eight regional beer competitions. Siba’s chief executive, Julian Grocock, said: “With close to 800 brewers now within Siba’s membership, competition for a medal is intense at both regional heats and the national final. To win a place at the final judging at BeerX is an achievement in itself, and we applaud all our finalist brewers as well as the medal and trophy winners.”
Ex-Whitbread HQ to be demolished: The former headquarters of Whitbread in Park Street West, Luton will be demolished and replaced a £25m mixed-use development if plans for residential and student accommodation, together with commercial space, on the site secure council permission. The site was originally Flower’s Brewery until that company was taken over by Whitbread in the 1960s, with the brewery later demolished and replaced by the Whitbread HQ. The three-storey building has been largely unoccupied for some time and, despite extensive marketing, no interest has been received with its current permitted uses in place.
Papa Murphy’s plans $70m IPO: The parent company of the Papa Murphy’s Take ’N’ Bake Pizza chain is going for an IPO float with the goal of raising $70m. The chain, based in Vancouver, has more than 1,400 outlets in 38 US states, Canada and the United Arab Emirates. Unlike most pizza chains, customers take the freshly prepared pizzas home to bake in their own ovens. Price points range from the $5 Faves line of classic pizzas to premium stuffed pizzas at $15 a time. The business model is attractive to franchisees because units have a relatively low build-out cost, since the concept requires no ovens or freezers. Labour costs are lower than full-service restaurants because there is no dine-in service. Systemwide sales rose from $385.9m in 2004 to $785.6m in 2013, according to SEC filings. Like for-like sales for 2013 increased 2.8% over 2012. For the financial year 2013, however, the franchiser recorded a net loss of $2.6m, up from a loss of $2.1m in 2012, even though revenue for 2013 increased 20%, to $80.5m. Franchisees are expected to open between 105 and 115 new units in 2014. The company projects Papa Murphy’s has the potential to reach 4,500 units in the US, including about 2,500 new locations in existing markets.
