Weekend press round-up 9-10 March 2019

Tortilla exploring options

The restaurant chain Tortilla has been placed on the block by its backers, including the private equity firm Quilvest.

The Mexican food chain, which is opening its 37th UK site this week, has appointed advisers from Spayne Lindsay.

Sunday Times

 

HSBC chokes on stake in Jamie’s Italian

HSBC could be forced to write off £17m as the troubled restaurant chain Jamie’s Italian tries to find a buyer.

Celebrity chef Jamie Oliver is selling a majority stake in the chain, which went through a restructuring last year to shut about a third of its sites and slash its rent bill.

The chef pumped £13m of his own money into the rescue deal.

The chain has been battered by poor trading and rising costs, which led to last year’s company voluntary arrangement that cost about 600 jobs.

Oliver, 43, has hired advisory firm Alix Partners to find a buyer for the stake. The auction has attracted bidders such as private equity firms Carlyle, Endless, Aurelius Investments and Landmark, Dubai owner of Carluccio’s.

HSBC extended fresh credit as part of last year’s deal but insisted on strict terms, including a weekly update on its cash position and security over its assets.

Sources said that HSBC was likely to take a haircut of at least 50% on its debt, which totalled £34.2m as of last September.

The chain lost £31m in the year to the end of 2017 on turnover of about £100m, according to the most recently published accounts.

Sunday Times

 

Fresh doubts surface over Jamie’s Italian

Jamie Oliver’s ailing restaurant empire is trying to secure additional funding, casting fresh doubts over its future.

The business, which runs 22 restaurants in the UK, came within hours of collapse in 2017.

The multi-millionaire television chef then ploughed £13m of his own money into the business to stop it going bust.

Now, five turnaround investors are said to be circling, with second round bids due in the first week of next months.

AlixPartners is overseeing the restructuring of the debt-ridden chain.

It has been a year since the chain unveiled 600 job cuts and 12 site closures. It also asked for restructured rent deals at 11 further outlet as part of company voluntary arrangement (CVA) in 2018.

My Oliver last year admitted he no longer had the means to prop up the business, which opened its first branch in 2008 in Oxford before peaking at 43 restaurants by the end of 2016.

Sunday Telegraph

 

Hey Big Spoonder

BUDGET pub giant Wetherspoon has hiked food and drink prices for the fifth time in just two years.

Critics say the company is “running out of excuses” for the increases, which they warn will drive customers away.

The chain has slapped up to 20p on selected tipples, including beers, ciders, wines and spirits as well as coffee and soft drinks.

The budget boozer has also increased the price of its popular meal deal range by ten pence and some breakfast menu items by 20p.

Prices vary nationally, but in one branch — The Oxted in Surrey — an Ultimate Burger plus alcoholic drink now costs £7.75.

Two years ago it was increased from £7.25 to £7.40 — then to £7.49 in October 2017 and £7.59 in March 2018 before hitting £7.65 in October.

Wetherspoon, which has more than 900 pubs across the country, announced in January its six-month profits would be lower than expected as rising wage costs took the fizz out of strong sales growth.

But consumer rights expert Martyn James commented: “It’s getting harder for Wetherspoon to hide behind the usual excuses for yet another price rise.

“Selling food and booze at bargain prices made the company. But price rises on this scale will drive their customers out of the door.”

Wetherspoon spokesman Eddie Gershon insisted: “We believe that we continue to offer excellent value for money meals in our pubs.”

The Sun

 

We’re assalted

ASIA-inspired high street restaurants pack more than two days’ worth of salt into a single meal, research shows.

Diners at chains like Yo! Sushi, Wagamama, Itsu and Wasabi are far exceeding the NHS’s recommended limit of 6g per day with some of their dishes.

It means some can consume the equivalent of 26 bags of ready salted crisps.

The World Health Organisation has warned that too much salt is as harmful as smoking — and can cause high blood pressure, heart disease, strokes and Type 2 diabetes.

A probe by The Sun on Sunday found the large spicy seafood ramen available at Yo! Sushi contains 13g of salt, while Wagamama’s chilli prawn and kimchee ramen has 9.4g.

Similarly, Wasabi’s large chicken katsu curry rice has 9.94g of salt. And even Itsu, which boasts its meals are “good for you”, has 4.2g in its chicken teriyaki “on a bed” dish.

Clare Thornton-Wood, of the British Dietetic Association, described the findings as “disappointing”.

She added: “The meals from these chains would often be perceived as ‘healthy’ with the use of vegetables and vegetable protein sources or lean meat but the salt content means they are much less healthy then they seem.”

The restaurant chains were all approached for comment.

The Sun

 

Domino’s Pizza to miss store targets

Domino’s Pizza Group is poised to reveal that it has opened just a handful of stores this year, as it fights to reverse its fortunes overseas.

The FTSE 250 company, which is facing a growing rebellion from franchisees over profits, has come under pressure amid doubts that it will hit its ambitious target for new UK stores.

Analysts at Liberum say it has opened just three so far this year — in Carlisle, Bedford and Belfast. By April 1 last year, it had opened nine, according to Liberum.

Domino’s has warned that profits for last year will be at the lower end of estimates, because of “growing pains” in international markets. It is struggling to integrate the Dolly Dimple’s chain it bought in Norway two years ago. Operations in Iceland and Switzerland have also suffered.

The shares have fallen almost 28% in the past year and analysts expect pre-tax profit to fall 1.9% to £94.4m, on sales of £557m.

Sunday Times

 

Wetherspoon’s chief punches above his weight on a no-deal Brexit

Tim Martin, the Brexit-supporting founder of the JD Wetherspoon pub group, is an easy man to caricature. He’s been known to sport a mullet hairstyle, long after the brief aberration in fashion history when such experiments were indulged; he has a sense of humour that includes naming his pub chain after a former teacher who couldn’t control his class; and he speaks his mind in a manner that inevitably draws parallels with the Pub Landlord, the comic creation of standup Al Murray.

Take this Martin tale from a few months into his own hospitality career, when a straggler refused to depart his boozer at closing time. The drinker wouldn’t budge, the police were summoned, but Martin grew bored and so simply poleaxed the punter. As the customer lay on the floor, the rozzers finally arrived, only for a barman to report that the customer had “attacked the guv’nor”. “The policeman told him to get up and apologise,” Martin once recalled.

This, of course, feeds into the narrative beloved by knockers of both Martin’s pubs and Brexit views: the man is merely a rich, entertaining crank. But, more soberly, the real story is far more complex than that.

For starters, Martin has constructed a business worth £1.3bn from scratch. He has grown that business while the sector has struggled. And he trades a heck of a lot with Europe and the wider world (sparkling wine from Australia, prawns from China), so actually has direct experience of tariffs and customs checks to inform the sound bites. All of which will be in focus when JD Wetherspoon reports interim results this week.

On tariffs, Martin’s argument essentially boils down to the belief that UK food prices will reduce in the event of a no-deal Brexit, because tariffs would be cut to zero. Onerous customs inspections – and the predicted lengthy queues at Dover – would not materialise as the regulations with the EU “are already aligned”, while non-EU imports would require far fewer checks as no one would be inspecting to see if tariffs were owed.

Meanwhile, private companies such as supermarkets, pubs and restaurants are already responsible for inspecting overseas farms and factories to see if they comply with UK legislation on standards and quality.

If needed, replacement products can be sourced from the UK and outside Europe (Wetherspoon’s has recently ditched the German liqueur Jägermeister for a cheaper UK alternative. Martin claims sales increased.)

These arguments do have an intuitive appeal, but even Remain-supporting economists admit there is a factual underpinning to Martin’s tariff opinions. The issue, they say, is if wider factors might come into play.

Sam Lowe, senior research fellow at the Centre for European Reform, says: “While there is an assumption that removing tariffs means lower prices for consumers, the evidence is far from conclusive. When tariffs go up the extra cost is usually passed on to consumers, but when they go down this is rarely the case.”

Simon French, chief economist at investment bank Panmure Gordon, adds: “I might marvel that the New Zealand lamb shank served at Wetherspoon’s post-Brexit is only £4 – but am I now paying jobseeker’s allowance to the Welsh sheep farmer who used to supply it at £6?”

Both sides will have considered all of these points – and still come to different conclusions on the risks. No one can be sure what no-deal will actually mean, and even if your arguments were essentially wrong, unforeseen events might suddenly make you look right. Just ask Martin after he poleaxed his customer.

The Observer

 

Trouble in Oysteropolis: Whitstable in uproar over booming fisheries trade

The harvesting of oysters on the mudflats of the Thames estuary has helped transform Whitstable, the quaint seaside town on the north-east Kent coast, from a neglected backwater into a foodie mecca.

At weekends its narrow pavements are packed with day trippers beating a path to one of its many shellfish shacks or restaurants where half a dozen freshly shucked native oysters, the local, highly prized, wild variety, will set you back £15.

But trouble is brewing in the town they call Oysteropolis, with some residents questioning whether the cultivation of the mollusc has gone too far.

A public inquiry, scheduled to begin next month, will consider whether the Whitstable Oyster Fishery Company [WOFC] has breached planning permission by erecting thousands of metal trestle tables off the beach in order to farm non-native Pacific rock oysters which cannot reproduce.

“The only time we had anything comparable to this was the beach defences along the coast in the second world war,” said Ashley Clark, a local councillor and vocal critic of the farm.

Initially, Canterbury city council, which oversees Whistable, took the view that the trestle tables did not need planning permission because they were not permanent structures. But, as their numbers grew, from a few hundred to more than 3,500, and locals raised fears over the danger they presented to swimmers, dinghies and windsurfers, the council served an enforcement notice.

“Locally, there’s been uproar over it,” Clark said. “For years people have canoed and sailed and swam out there and now all of this has been curtailed by an activity which is totally alien to Whitstable because, originally, the native oysters were dredged offshore a mile or two miles out. This is entirely novel, using an alien species for commercial purposes.”

Others, however, disagree. Richard Maltby, principal of training at the Whitstable Yacht Club sailing school, points out that the first passenger railway service operated between Canterbury and Whitstable, bringing people to the coast for sea-bathing.

“There is a balance that’s always been special in Whitstable, but that’s being challenged by what’s going on,” he said. “We’re not anti-development, but he needs to understand other people use these waters.”

The Observer – to read the full story, click here

 

Is £15 too much for the perfect cup of coffee?

Alain Ducasse has created a parfait cup of coffee.

While there is no wrong way to enjoy a caffeinated beverage, says Jakub Klucznik, the company’s cafelier (coffee-sommelier), they simply believe there is a very, very right way: an exacting, scientific and intensive process to produce an incomparable brew.

Among the offerings of the new Le Café Alain Ducasse in King’s Cross, London, is a single origin filter coffee from Yemen that costs £15. Which is shocking, except its next cheapest cup is £13. Uncommon products have an uncommon price, says a spokesperson for Mr Ducasse, the French chef who has held 21 Michelin stars. Uncommon ingredients are a point of obsession for the café.

Mr Ducasse travelled the world for his beans, which can be harvested in quantities as small as 17kg each year (to buy 100g of the Yemeni beans will cost you £59). They are roasted in Paris by a two-time French roasting champion. The sugar is sourced from La Réunion island in the Indian Ocean, and the milk is imported from Normandy for ideal fat and protein content. Two different mineralities of filtered tap water are used, specific to the tenth particle per million. Almond and hazelnut milk is made bespoke in Montpellier, France, with nuts sourced from Sicily.

Financial Times – to read the full piece, click here