Propel Newsletter Archive Page

Greene King – warm weather and school holidays drove leisure spend in July: The average British household spent £202 on out-of-home leisure in July, an increase of £22, or 12%, over June, according to the latest figures from the Greene King Leisure Spend Tracker. The rise was driven by the onset of the school holidays and the continuing popularity of “staycations” in Britain. All areas of leisure spending have increased in July compared to June, led by “other leisure”, which was up 18% to £81, as families looked to keep children occupied. Drinking out also showed strong growth, with an increase of 14% in July, to £46, as the warmer weather encouraged people out of the home and into beer gardens. Drinking out accounted for 23% of average household spend, which is its highest share since the Leisure Spend Tracker started. Eating out continued to rise, with average household spend growing by 5% in July, on top of the 5% rise seen in June. Households in London and the South East of England increased their leisure spend by a similar amount to those in the rest of the UK, indicating that the recovery continues to take hold across the country. Steve Jebson, Greene King’s commercial director, said: “The summer holidays are now upon us and July’s leisure spending showed that other leisure, which includes activities such as bowling, cinema and live events, blazed a trail as households entertained their kids. Family households led the growth in total leisure spending in July, with these households increasing their leisure spend by 19%, or £40, compared to June. We also believe that, despite the growth in the number of those planning a trip abroad this year, the demand for ‘staycations’ remains strong.” In the lead-up to the referendum on Scottish independence, Greene King conducted an investigation titled “Focusing on Scotland”. This revealed that Scottish households spend more on leisure than those in the rest of Great Britain. Jebson said: “It appears that Scottish households are slightly more sociable than their counterparts. While proportionally they are spending much the same between drinking out, eating out and other leisure as other Britons, they spend an average of 3% more on leisure each month, notably £4 more on drinking out and £4 more on eating out.”

Industry News:

Fleurets chairman – ‘ALMR chief executive is wrong to suggest rents are set by a surveyor’s mafia’: The chairman of the property agency Fleurets, Barry Gillham has declared that tenants often fail to take good quality advice when agreeing rents in the sector. Gillham was responding to criticisms of the current property system made in a Propel Friday opinion by David McHattie, chief executive of the Association of Licensed Multiple Retailers (ALMR). Gillham, who served on the ALMR council for 12 years, said: “As someone who spends up to a third of his life acting as arbitrator and independent expert (plus a third acting for tenants and a third for landlords), I quite often find that tenants have agreed rents without taking proper professional advice. The same is rarely true of landlords. Where tenants do take advice, often they go for a cheaper option, and the quality of the evidence I receive from landlords’ surveyors is often superior to that received from the tenants’ representatives. In short, tenants spend too little on fighting their corner. ‘Open market rent reviews’ does what it says on the tin. The object is to replicate what people are offering in the market. If one person makes a silly bid, it might be ignored. If several people make silly bids that is the market. I would urge David McHattie not to be in too much of a hurry to dispense with ‘restrictive lease terms’. A lease that says the property can only be used as a pub has a rent review tied to pub rents paid elsewhere. A lease that says a property can be used as a pub, restaurant or shop, will be valued to the highest rent – even though it may only ever have been used as a pub. Mr McHattie also complains of other aspects of leases, such as RPI uplifts and rent paid in advance. Tenants do not have to sign leases. Deals aren’t made by landlords. They are made when tenants agree to landlords proposals – just ask Tim Martin, who won’t agree to open-market rent reviews. Contrary to Mr McHattie’s apparent belief that rents are set by a surveyor’s mafia, the true answer is the direct opposite. Surveyors follow the evidence set by rents negotiated by tenants.”

Police crackdown on laughing gas in pubs and clubs: An increase in the use of “laughing gas” – nitrous oxide – as a recreational party drug has prompted police to initiate a zero tolerance policy in pubs and clubs. New health warnings say abuse of laughing gas can have a number of dangerous consequences, including heart attacks and poisoning of the central nervous system. The gas, which is inhaled by users in a balloon, has been linked to a number of deaths across the country. A number of police forces taking steps to deter the recreational use of laughing gas after a large haul of canisters was found last week. The police are working with the Local Government Association, which put out the health warning this week, in a bid to put additional preventative measures into effect.

Groupon relaunches website with move to become online marketplace: Groupon has overhauled its UK website as it steps up efforts to shake off its past as king of the internet “daily deal” and reinvent itself as an online marketplace. Tamer Tamar, senior vice president of Groupon’s European division, said of the website’s relaunch: “It’s not just run of the mill teeth-whitening and massage [offers] like there used to be. The number and variety of deals have grown rapidly.” Recent popular offers, he said, included after-hours tours of the Harry Potter sets at Warner Bros studios in Leavesden, Hertfordshire, and Starbucks discount vouchers. The website, which launched in the UK four years ago, has added holidays as well as heavily discounted clothing, household goods and consumer electronics to its repertoire. Groupon has 53.2 million users, around five million of whom are in the UK, according to data from comScore, which tracks internet traffic to websites.

ALMR calls for more government support for the sector: The latest official figures show that licensed hospitality is driving economic growth in the UK as the industry bucked nationwide pay stagnation to deliver ten months of wage growth and continuing increases in gross value added (GVA). The Association of Licensed Multiple Retailers (ALMR) said the statistics demonstrated the sector’s increasing economic importance and called on the government to help ensure the sector’s ability to invest in people is not hindered in the crucial months ahead. Figures from the Office for National Statistics show that the hospitality industry now employs more than two million people, having created 117,000 net new jobs in the last year, and has delivered month-on-month wage growth every month since August 2013. The ALMR’s strategic affairs director, Kate Nicholls, said: “These figures demonstrate our members’ determination to invest in their staff and provide opportunities, which has undoubtedly been helped by measures like the employment allowance, but is fundamentally possible only because of the incredible work of entrepreneurs in the industry. This was reinforced by the publication of data showing that 0.79 percentage points of the overall 0.83% growth in Q2 was attributable to the services sector – 95% of total growth – with hospitality boosting its gross value added by 0.97%. If the government is prepared to make the cost of employing people cheaper, with further action on employers’ NICs and measures to drive down business rates and end the VAT disparity with supermarkets, we can do even better than these fantastic results. On average, each of our members’ outlets generates £209,000 GVA, employs 22 people and supports a local, sustainable supply chain, all while paying 46% of its turnover in taxes to fund vital local services. Our industry is one that the government can’t afford not to support.”

Company News:

Harris+Hoole to close six sites: Harris+Hoole is to close half a dozen unprofitable London sites, The London Evening Standard has reported. The coffee chain, in which Tesco holds a stake reported to be 49%, is to imminently shut six struggling shops across the capital and Home Counties. Co-founder Nick Tolley told the newspaper: “Our working relationship with Tesco remains strong as ever. Like any business which has grown rapidly, some locations have performed better than others, so it makes sense for us to review those locations which have done less well, or where the lease is coming to an end.” The shops closing include its stores in Walton-on-Thames and Hounslow as well as a pop-up concession in Tesco’s Highbury store and will leave the chain with 41 shops. The chain intends to have 16 high street shops and 32 stores in or alongside Tesco premises by the end of the year. It is also planning its first airport store at Stansted next year. A Tesco spokeswoman said: “We continue to work successfully with Harris+Hoole. Feedback from customers in stores with Harris+Hoole coffee shops has been really positive and we look forward to more shops opening in the future.”

McDonald’s hosts fine-dining dinner to challenge cheap, unhealthy food image: McDonald’s has hosted a dinner for reporters and bloggers in the United States where waiters served cuisine prepared by celebrity chefs using ingredients from the chain’s menu. A Kung Pao chicken appetiser was made with Chicken McNuggets doused in sweet and sour sauce and garnished with parsley. Slow-cooked beef was served with gnocchi fashioned out of McDonald’s french fries and a fruit sauce from its smoothie mix. For dessert, the chain’s biscuit mix was used to make a pumpkin spice “bisnut”, a biscuit-doughnut hybrid. The event, held in the Tribeca neighbourhood of New York City, was billed as “a transforming dining experience of ‘fast food’ to ‘good food served fast’.” Attendees tweeted photos, and the night was written up on several websites. The dishes are not intended for McDonald’s restaurants. Instead, the evening was part of a campaign by McDonald’s to shake its reputation for serving cheap, unhealthy food.

St Austell starts to recruit for flagship craft ale and smokehouse pub: The Cornish brewer and retailer St Austell has begun to recruit for its new flagship craft ale and smokehouse, due to open on Exeter Quay in November. It has started recruiting for 40 positions at the pub-restaurant on the quayside. The brewery is investing £1.5mn in transforming a derelict 19th century warehouse into a new venue called Samuel Jones, after a former Exeter mayor who was also a wine merchant. The restaurant will focus on “craft ale and smokehouse style food”, with a range of 18 craft ales from around the world. The ground floor includes a 3,117 sq ft main area and 586 sq ft unit alongside, which is being renovated into an “industrial-feel” pub and restaurant. Food will be smoked and cured in-house and cooked on chargrills and in barbecue ovens in open, theatre-style kitchens. Ashley Rudd, retail operations manager for St Austell Brewery, said: “This is a fantastic opportunity to be part of the team that launches this unique new venue – it really will be an exciting place to work.”

Freehold of celebrity chef’s pub put on the market: Celebrity chef Mike Robinson has put his West Berkshire pub on the market. Robinson, who became nationally known as a game chef after appearing on the television programmes Saturday Kitchen and Great Food Live, is ending nine years at The Pot Kiln, Frilsham, to move on to other projects after separating from his wife Katie, with whom he bought the pub. The property agent Christie + Co is advertising the freehold at a reduced rate of £925,000, having previously put it up at £1.1m. The pub was voted 29th place in a list of 50 best gastropubs in the country by a panel of industry professional judges. Bethany Doggett, of the Winchester branch of Christie + Co, said there had been strong interest in the pub since the price reduction.

QikServe secures £525,000 in extra funding: The mobile technology company QikServe has secured a further funding package of £525,000 to support the expansion of its mobile ordering and payment platform. This brings the total investment in QikServe to £1.1m. The new investment includes funding from existing investors Equity Gap and The Scottish Investment Bank (the investment arm of Scottish Enterprise), as well as a new investor, Par Equity. QikServe provides a mobile ordering and payment application for a range of hospitality sectors, ranging from casual dining, hotel room service and fast food to stadium catering and events. With QikServe, establishments serving food and drink can offer customers the choice to order and pay through their smartphone.

Jamie Oliver to campaign against low-quality US food exports: Jamie Oliver is planning a campaign to stop British food standards being lowered to allow American food imports with greater concentrations of pesticides and hormones into the UK. The TV chef hopes to intervene to stop a trade agreement between the European Union and the United States aimed at removing trade barriers between member states. Oliver claims the “dangerous” Transatlantic Trade and Investment Partnership (TTIP) deal could undo decades of work by getting round bans imposed by the EU on high levels of growth hormones and pesticides in meat. The same restrictions do not exist in the US, and at present, if US companies want to export food to the EU, they must ensure it meets the higher European standards.

Marco Pierre White link to Wadworth site dismissed: Rumours that the celebrity chef and restaurant entrepreneur Marco Pierre White was to take over the Black Swan hotel in Devizes have been scotched. White has been spotted on a number of occasions over the past two weeks sitting outside the Costa coffee shop in Devizes Market Place while his driver waits nearby in a black Range Rover. His visits have coincided with the tenancy of the neighbouring Black Swan being advertised on the Wadworth Brewery website. However, antique dealer John Chapman, who runs Crowman antiques in Northgate Street and has a workshop in the yard of the Black Swan, revealed that his wife Florence and his sister-in-law Amelia Heaton-Renshaw had applied for the tenancy, and White was not involved. He said: “Marco is a personal friend of my family. He likes antiques and that is why he has been here.”

Four star hotel fined £20,000 over rat infestation: A independently owned four-star hotel in the heart of the New Forest National Park with a four-star rating on TripAdvisor has been ordered to pay more than £20,000 in fines after hygiene inspectors found evidence of rat infestation in its kitchen. The Crown Manor House hotel in Lyndhurst, Hampshire, chose to close down its kitchen twice in a month after inspectors found fresh rat droppings underneath and behind kitchen equipment, as well as gnawed eggshells and gnawed paper towels. The hotel, which was fined £17,000 and incurred £4,300 in costs, pleaded guilty to five offences under the Food Hygiene Regulations at Southampton Magistrates’ Court.

Harrogate rejects Pret A Manger plan despite defeat over Carluccio’s rejection: Harrogate Council in Yorkshire has rejected plans by Pret A Manger to open on Cambridge Street, one of Harrogate’s main shopping streets. The proposals involved the replacement of a Dorothy Perkins and Burton store. More than 500 people signed a petition to oppose the plans. In a council report, case officer Mike Parkes said Cambridge Street was one of the principal shopping areas in the town centre. He said: “This property occupies a prime location on a principal shopping street and change of use from wholly retail in this location would adversely impact on the character of this important shopping street within Harrogate town centre.” Last year Harrogate Council faced a backlash after refusing planning permission to the Italian restaurant chain Carluccio’s. Developers appealed to a government planning inspector, who overturned the council’s decision and the Station Square restaurant opened this year.

Local authority stumps up £33,000 to get celebrity chef restaurant open: A local authority has pledged £33,000 to help get a celebrity chef’s bistro up and running in Colwyn Bay, North Wales. Bryn Williams announced in 2013 he would open a restaurant at the new Porth Eirias water sports centre, but it is still not open. Clwyd West MP David Jones said the building was becoming a “money pit”. Williams, who has appeared on TV programmes such as Great British Menu and owns a restaurant in Primrose Hill, North London, had planned to open the restaurant in time for Christmas 2013. But legal issues delayed the project and a deal was eventually signed in April. Four months later and the bill for the restaurant’s internal works has risen. Now the council agreed to pay an extra £33,000 to help finish it, taking its total spend on the project to more than £100,000. But Conwy council leader Dilwyn Roberts said the bistro was part of a wider £70m regeneration of Colwyn Bay and in the scale of things the extra money was “very little”. “A lot of time and energy has been invested into bringing Bryn Williams to Porth Eirias, and we’re fully aware of the frustration people have felt because the bistro has yet to open,” he said.

Rick Stein to launch debut range of items for the kitchen and home: Talisman Licensing has secured a deal that will see the launch of a home range for the restaurateur Rick Stein. Talisman, a “lifestyle licensing” specialist has brokered a deal with Li & Fung which covers a wide range of items for the kitchen and home. These include pebble-inspired measuring cups, maritime tea light holders, tapas sets, oven to tableware and cotton textiles. Julian Day, managing director of Talisman Licensing in the UK, said: “Rick Stein is my personal food hero and I am thrilled that Talisman are working with him on his debut home range.” The Rick Stein Kitchen & Home range will launch in the UK and Australia in the autumn, then globally in 2015.

Hospitality veteran plans boutique Norfolk bed and breakfast: Hospitality veteran Michael Knox-Johnston, who has run a number of the UK’s top hotels during a 40-year career, has submitted a planning application to turn the only remaining pub in Bressingham, Norfolk into a boutique bed-and-breakfast. The consultation period has been extended to September 1, after South Norfolk Council requested further evidence from the pub’s owners that the building was no longer fit for its existing purpose, after a mixed initial reception from residents. Knox-Johnston and his wife Hazel bought the Chequers Inn at an auction in February. They responded to objectors in an open letter to South Norfolk Council, stating that they were “astonished by the level of vehemence and misinformation from local comment.” Knox-Johnston said the couple had researched the possibility of continuing the operation as a pub, and no one had showed any interest in the building during its 18 months of closure. He wrote: “I believe that the objections being made are unrealistic and regrettably lack the financial consideration that would be risked by us as owners if this property remains a public house.”

Coal Grill and Bar operator moves into profit: Charterhouse Leisure, the seven-strong operator of the Coal Grill and Bar and Severn Shed brands, which is backed by the private equity company Beringea, has reported a move into the black for the year to 28 February 2014. Turnover rose to £8.44m from £8.19m the year before. Pre-tax profit was £221,000, against a loss of £189,000 the year before. Ebidta for the year was £708,000, a 14% increase on £620,000 the year before. The company, led by John Gater, reported that openings in Milton Keynes in September 2013 and Cheshire Oaks in April this year are both trading ahead of expectations. Charterhouse Leisure said: “Despite a difficult year for the industry, in which our consumers’ disposable income came under increased pressure from taxation, price inflation and future economic uncertainty the Coal brand continued to increase its turnover and be positive on a like-for-like basis. The two brands operated by the company deliver great fresh food in well-invested environments and with informal and efficient service standards. This combination has seen like-for-like sales continue to grow over the last year. With this positive outlook, the group has secured a number of openings over the next two year and is looking forward to expansion.”

Batemans reports turnover up, profit down: Lincolnshire-based brewer and retailer Batemans has reported turnover rose 4.9% to £16.19m for the year to 31 January 2014, up from £15.43m the year before. Pre-tax profit dipped to £168,000 from £240,000 the year before. The company said: “Turnover and gross margins both improved ahead of the prior year. However, this was another challenging year and the decline in profit after tax is attributable to the continuing move within tenanted pubs towards free trade pricing and the testing and development of managed house operating procedures.” The company’s net asset value was £9.91m at the year-end, against £9.82m the year before. Employment costs as a percentage of turnover rose to 0.6% to 15.5%. Directors’ total remuneration rose to £632,000 from £600,000 the year before. The company has ten directors.

Draft House reports turnover up, losses increase in transitional year: Draft House, the London bar operator led by Charlie McVeigh and backed by Luke Johnson, has reported turnover jumped 37% to £4.01m in the year to 27 October 2013, up from £2.96m the year before. Pre-tax losses were £192,000, against £158,000 the year before. Underlying ebitda was £218,000 (2012: £112,000). The company said: “The accounts reflect a transitional year. In July 2013 the group launched Draft House Seething Lane in the City of London, our largest and most ambitious pub to date which quickly became our top revenue performer within the group. Shortly after the balance sheet date, the group disposed of an underperforming site in East Dulwich. A combination of trading losses in 2013, closure costs and a balance sheet impairment charge resulted in a negative impact on the profit and loss account of £185,000 in the period under review. Taking into account the cost associated with East Dulwich and pre-opening expenses at the new Seething Lane unit amounting to £96,000, the underlying net profit was £89,000. In the period to June 2014 (eight months trading), sales have increased 29% year-on-year to £3.2m with ebidta before pre-opening expenses of £252,000, an increase of 163% compared with 2012/13. Net profit for the same stands at £100,000. The group is generating cash reserves and the focus ahead is to expand by acquiring new sites.” The company recently told Propel that current turnover is running at an annualised £5m plus and it was in negotiations on three sites.

Private buyer acquires Herts pub freehold off £1.35m asking price: A private buyer, John Purdy, has bought the Galley Hall, a large pub in Hailey, near Hoddesdon in Hertfordshire, through the property agent Christie + Co off an asking price of £1.35m. The Galley Hall has a large bar/restaurant, function room and a landscaped garden area featuring a large lawn beer garden, children’s play area and bench seating. Carl Steer of Christie + Co’s London office said: “The Galley Hall represents what many buyers are looking for – a well-maintained, high turnover food-led pub with plenty of covers inside and out with accommodation. It was only a matter of a few weeks before we accepted the offer from Mr Purdy.”

Thwaites scoops five awards at International Beer Challenge: The Lancashire-based brewer Thwaites has scooped five awards at this year’s International Beer Challenge. The medal haul included four silvers and one bronze. The brewer’s American IPA, 13 Guns, was awarded silver in the taste category and also bronze in the design and package category. The wins come after13 Guns being announced as a finalist at the Indie Beer Festival, last month. Amongst the other winning silver medal ales in the tasting category was the 3.9% ABV dark mild Nutty Black, the craft beer Crafty Dan and the English brown ale Big Ben. Lee Williams, Thwaites marketing manager, said: “The International Beer Challenge has been rewarding excellent beers for almost 20 years, so we’re thrilled to have received recognition for ales right across our portfolio. 13 Guns continues to go from strength-to-strength and is quickly becoming one of the most talked-about craft beers in the industry.”

Plan lodged to turn Conservative party private club into lap-dancing venue: A senior councillor has spoken of his embarrassment that a former private club for Conservative Party supporters in Portsmouth could now become a lap-dancing venue. An application has been put forward to turn the former 149 Club, in Albert Road into a new premises for Elegance, currently based in Granada Road. The adult entertainment venue wants to move out of a residential area into one that is more commercial. The Albert Road site has been closed since last year. Luke Stubbs, Tory deputy leader of Portsmouth City Council, said: “It’s all a little embarrassing and also frankly quite funny; however it really is nothing to do with us. The local Conservative party had no knowledge of or involvement with the sale of the club. The building was separate from the Conservative Party and was affiliated to the Association of Conservative Clubs.”

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