Top story
Yo! Sushi heads for cut-price Mayfair deal
A recently launched investment firm has become the new frontrunner to buy Yo! Sushi in a cut-price deal worth less than £100m. Mayfair Equity Partners has replaced Inflexion as the most likely buyer of the UK’s biggest Japanese restaurant group.
Sources close to the process said that Inflexion had tried to chip away at the price it wanted to pay Quilvest, Yo! Sushi’s current owner, paving the way for Mayfair to step in. But City sources said Inflexion — owner of fashion brand Jack Wills — could return to the fray, raising the prospect of a sushi bidding war.
Yo! Sushi, which trades from more than 70 sites in the UK, has cashed in on the growing popularity of Japanese cuisine, now employing well over 1,500 people.
It has also expanded into Europe, the Middle East and the US, even as a string of competitors such as Itsu have grown in its domestic market.
A deal between Mayfair and Quilvest is still not certain, and it was unclear on Saturday whether the current owner would abort the process or further reduce its price expectations if the current talks fall apart.
Other bidders for Yo! Sushi are said to have included 3i, Morgan Stanley Private Equity and Mistral Equity Partners, a New York-based fund.
Mayfair was launched earlier this year by a respected group of industry figures and has invested in Ovo, one of the challengers to the big six gas and electricity suppliers.
Sky News/Sunday Times
Pubs
NewRiver aims to use property expertise to transform failing pubs
The regulars at the Old Sal pub in the Stoke-on-Trent suburb of Longton do not yet know it, but the success or failure of an imaginative plan to revitalise their neighbourhood rests on their shoulders.
Brewing company Marstons sold the pub — and 201 others — to NewRiver Retail, a real estate investment trust, nearly two years ago. NewRiver believes that, with its expertise in property, the company can make money out of the Old Sal and other boozers where the brewing companies and pub operators could not.
These groups have been finding it hard to make the traditional pub pay following the advent of cheap supermarket alcohol and the 2007 ban on smoking in bars and other workplaces.
Parliament’s move last year to end the longstanding tie system — under which publicans paid inflated prices for beer to pub operators in exchange for lower rents on their premises — has unleashed major change in the industry. Enterprise Inns and Punch Taverns, the two leading public groups, have unveiled plans to sell hundreds of pubs.
Last month, NewRiver bought 158 pubs from Punch Taverns, taking its total holdings to 360 across the country.
“The [pub operators] recognised they just didn’t have the expertise to do what we’re doing,” says David Lockhart, NewRiver’s chief executive.
NewRiver has carefully selected the pubs for two particular characteristics: plentiful parking space, and spare land around the buildings that could be repurposed. NewRiver plans to add shops or homes, creating an extra revenue stream to bolster the pubs’ profits.
The first 45 planning applications have been submitted, including one relating to the Old Sal. If Stoke-on-Trent council approves it, the pub’s regulars will soon be able to pop across to a new Co-operative Group food store to buy a pint of milk, while the Old Sal’s landlord pours them something stronger at the bar.
NewRiver is modernising the pubs by adding wifi connectivity for smartphones and tablets, and Amazon lockers for parcel drop-offs and collections. It is also improving the quality and range of food on offer.
Mr Lockhart built up the listed landlord Halladale from 2001, before selling to Stockland, an Australian property company, in 2007.
He then launched NewRiver in 2009 and has since amassed almost £1bn of retail assets, of which around three-quarters are town centre shopping malls. The pubs portfolio now makes up 15 per cent of its assets.
Given the supposed difficulty of making money from pubs, the biggest surprise that NewRiver discovered on acquiring the Marstons portfolio was how profitable it was, says Mr Lockhart. The pubs’ revenue streams have been “consistent” and “resilient” — with very few in rent arrears, almost wholly full occupancy, growing beer sales and turnover growth.
This motivated NewRiver to embark on a search for more pubs, a move that led to the recent Punch deal. “We felt the market was mispricing a whole bunch of assets, and so we should look for other portfolios where we can benefit from high income returns and also the [land] optionality,” says Mr Lockhart.
David Brockton, an analyst at Liberum, says the Punch transaction “appears to offer significant value potential”. Kate Renn, a Peel Hunt analyst, has upgraded her forecast for NewRiver’s earnings per share for 2016 by 2.5 per cent on the back of the transaction.
NewRiver’s move into pubs reflects its faith in the performance of assets that the market doubts — an approach first learnt as it built up its portfolio of shopping centres in small and medium-sized towns.
Mr Lockhart argues that the often-heard arguments about the decline of small town retail are wrong. “We saw an opportunity when, let’s be frank, you had to spend the first 15 minutes of any investor presentation defending the high street against people saying it was dead,” he says.
The centres perform well, he insists, with retail occupancy at 95 per cent. The 29 centres attract 120m customers a year.
They target day-to-day shoppers who visit often to buy household essentials, and so have been boosted by the decline in popularity of big weekly household shops, which favoured out-of-town superstores.
The Co-op is already a tenant of many of NewRiver’s centres, so its move on to its pub sites is a logical step in the relationship.
Now Mr Lockhart can add the death of the pub to his list of urban myths that he aims to disabuse investors of. As the new Co-op store’s steel frame arrives in the Old Sal’s car park in the coming weeks, New River will be hoping the pub’s regulars are convinced too.
FT Weekend
Allan Lockhart, property director at NewRiver Retail, will be talking about the group’s plans to develop and expand their tenanted pub portfolio at M&C’s Tenanted Pub Summit on 10 November, for full details of the conference - MRO: MELTDOWN OR REAL OPPORTUNITY? please click here http://www.tenantedpubcompanysummit.co.uk/page/2014_conference_programme.html
‘Brewsters are women. Brewers are men’: inside the micropub world
Craft beers and micropubs live in the space of the beard and the red trouser: are they really a thing? Or are they a thing only believed in by people who don’t get out enough to recognise what is and what isn’t a thing?
This week, the Campaign for Real Ale (Camra) came out with the definitive answer: they are, indeed, a Thing. Now 70% of pubs serve real ales. Micropubs have grown from zero 10 years ago (Camra’s estimate) to an expected 200 by the end of this year.
In Southampton, the Dancing Man is a microbrewer – and, I guess, technically, a micropub – though it is pretty macro when you look at it, an incredible wool house, whose pillars have been carbon dated back 1,000 years to a Spanish galleon. I don’t know how much you’re going to like this story, but I guarantee that it will make you feel quite thirsty.
Stewart Cross, the Dancing Man’s landlord, and Mandy Lacey-Cross, who is in charge of sales and events, set up a microbrewery in their last pub, the Platform, with a one-barrel plant in the kitchen in 2011. “This used to be a maritime museum,” Stewart, 52, explained, “then during austerity, Southampton lost £60m over two years.” The council decided to amalgamate all the museums in one place and put the old sites to commercial use. “We didn’t think we’d have a chance, when we first saw it. We thought it was far too big.”
Civil society was not unanimously taken with turning the museums into pubs as a solution to the spending crisis. “It’s not a pub, it’s a brewhouse. We just happen to have other drinks,” Mandy, 50, said equably. In full sail, she could persuade you to turn the British Museum into a microbrewery; she is a brewster of utter commitment.
“All the brewsters in the world,” she says as an aside, “brew the same beer, on the same day, to the same recipe. It’s called the Venus project.” Wait… all the brewers are women? “Brewsters are women. Brewers are men.”
The Dancing Man won over the people of Southampton – or enough of them, anyway. The place has been rammed since it opened at the start of the year. “The public are very unforgiving,” Stewart said somberly, “when you run out of beer, especially when you’re a brewery. Some of these were selling out in 40 minutes and it takes a day to settle. People were drinking it too fast.”
The important matter is the beer itself, which they debuted, back at the Platform, with a “citrusy pale ale”, says Aidan Lavin, 36, the Dancing Man’s head brewer. “There was plenty out there, but we thought we could better it. Abandon worrying about the price and just make the best ale we could.
“I’ve always had a passion for pubs and what they mean to England, even from a very young age, and I’ve got publicans and brewers in my family. Three months in, we’d won second place at the Southampton beer festival. I’ve been going there for years. I’ve been thrown out of there more times than they’ve let me stay.”
As Great and British as the ale business is, this resurgence wasn’t generated here. Mandy says: “I was with the Hampshire Brewery 20 years ago and we used to laugh about American brewers trying to brew British beers, badly.”
“But,” Stewart continues, “it’s kicked off a revolution around the world. They’ve done amazing things. It’s all to do with carbon footprint. People want to eat local, and they want to drink local.”
“We’ve got such a deep brewing tradition in England,” Aidan observes, “but it has been very staid for a long time. America started from a very blank slate, because prohibition had destroyed their foundations. But as sad as it is, it kicked the door open for them to try almost anything.”
Oh, and there’s one other thing that is a little bit sad: English hops aren’t as nice as all the other hops. “They’re a bit dull and a bit boring, they taste of earth and twigs and stuff,” Aidan says. The best hops are from New Zealand, Australia and the US, with the UK catching up mainly with blends grown to mimic the more tropical foundations.
Upstairs, a family from Philadelphia is sitting, John with the original pale ale (“it is outstanding”), Carmen with a beer that hinted at mango and papaya (“it is slightly sweet, but delicious!”), their daughter Alejandra with a coke. “The thing that you have here,” John says with admiration, “is the pulled pint. There are a lot of English pubs in the US but it’s all much more carbonated, I’ve never seen anyone pull a pint.”
They are about to set sail on a four-month cruise, during which John will teach religious studies to university students on what they call a “semester at sea”. But that’s an incredibly weird story for another time.
The Guardian
Eating out
Restaurants have started googling you before you arrive
If your waiter seems to know an awful lot about you - such as your birthday, and where you’re from - there could be a simple explanation. Posh restaurants have begun to Google their customers before they arrive - to deliver ‘personalised’ service.
Restaurant reservation service OpenTable says that the practice began in New York - but is now filter through into the UK. Restaurants use it to ‘match’ people with a waiter from the same area, for instance - or to find out if a chef or food inspector is visiting.
OpenTable’s report - aimed at restaurateurs - advises, ‘If sensitively done, restaurants still stand to provide a heightened level of hospitality by doing some pre-shift sleuthing. But be careful not to blurt out the names of your guests’ kids unless you want them running for the door.’
Yahoo.com
Directors at Pret have dig at firms that avoid paying tax because of way they are structured
Directors at sandwich chain Pret A Manger, which prides itself on its ethical stance, have had a dig at firms that avoid paying tax because of the way they are structured.
In its latest annual report, the firm said: ‘Pret does not take an aggressive stance in its interpretation of tax legislation, and does not use “tax havens” to reduce the group’s tax liability nor does Pret use marketed or aggressive tax avoidance schemes.’
The latest accounts for Pret’s parent firm, PAM Group, show sales grew from £510 million to £594 million for the year to January 1, 2015, yielding an operating profit of £27.4 million, but interest on loans turned this into a pre-tax loss of £25.5 million. However, the company paid £5.7 million in corporation tax.
Mail on Sunday
How We Made It: Daniel Land and Jeremy Sanders, founders of Coco di Mama
LONDON’S lunch market was saturated. There were sandwiches and sushi aplenty but childhood friends Daniel Land and Jeremy Sanders fancied something more continental.
“The capital had a quick-service industry to rival anywhere in the world, yet nobody had thought to do it with Italian food — and specifically pasta,” said Land.
So, four years ago, they cooked up the blueprint for Coco di Mama, a healthy Italian food outlet serving pasta and coffee alongside Italian-inspired sandwiches and salads. They pooled savings and amassed £250,000 before embarking on a round of fundraising.
“We wanted to put everything we had into the pot first because we genuinely believed it would be a success,” said Land. “Then we began to contact investors who we hoped would see the potential.”
Their idea caught the attention of big players such as former M&S boss Lord (Stuart) Rose and restaurateur and Zuma owner Arjun Waney. They and some former colleagues invested a further £250,000.
The investors stayed with the business until July this year when they made way for Azzurri, which runs the Italian chains Zizzi and Ask. Azzurri, which owns about 250 UK restaurants, now holds a majority stake, with Land and Sanders retaining a smaller share. “Obviously their involvement will be key to our development and Daniel and I continue to run and drive the business,” said Sanders.
Coco di Mama launched on Fleet Street in the City of London in April 2011. By the end of the first day Land and Sanders had served 400 customers and sold out of coffee. Today they have seven sites in London with 70 staff, and serve 35,000 customers a week. Last year they notched up sales of £4.7m and profits of £100,000. Revenues should exceed £7.5m this year.
Five sites on, the co-founders are determined to maintain standards as they continue to expand. “We want to grow but we want to maintain everything that’s good about us today,” said Sanders. “This is an industry that repays being consistently excellent. Customers aren’t in a long-term contract: every day we have to give them a reason to come.”
Sunday Times
Britain’s takeaway revolution
Our appetite for takeaway food is booming. But alongside kebabs and pizzas, many diners are looking for something classier – and different. And plenty of companies are queuing up to dish it out.
In 2001 when banker Will Shu was working on Wall Street, one of the “perks” of doing a 100-hour week was the point in the evening when someone brought out the book of menus from some of New York’s nicest restaurants and ordered dinner for everyone. They would stop work, gather in a meeting room and eat and chat. When he was posted to London in 2004, he was disappointed to find British bankers didn’t do that sort of thing. Of course you could order a takeaway pizza or a bog-standard Chinese meal, but not the kind of quality cooking he was used to.
Shu finally launched Deliveroo in 2013, to link up customers with restaurants that didn’t traditionally offer takeaway food. It took a while to convince restaurants, worried they would be listed alongside greasy takeaways, to sign up but now the company, which operates in 19 cities in the UK, has more than 2,000 restaurants including Wagamama, Gourmet Burger Kitchen and its first Michelin-starred place, Trishna. In the first half of this year, daily orders grew by 500%.
The food and grocery delivery market is booming. Last year, more than $1bn in the US alone was invested in online companies promising to improve the way we eat at home. These start-ups, in the vanguard of what is being called “fast food 2.0”, could even be, if you believe some of those involved, the future of how we eat. It’s not entirely unrealistic – as populations increasingly become more urbanised, space will become ever more cramped (and expensive), with future kitchen areas barely big enough for a kettle. Longer working hours could mean less interest in cooking after a day at work. To read the full article click here http://www.theguardian.com/lifeandstyle/2015/sep/13/britains-takeaway-revolution
The Guardian
Future of food: how we share it
The way we access food is changing, whether it’s your favourite recipe streamed online or home delivery from a Michelin-starred eatery. To read the full article click here http://www.theguardian.com/technology/2015/sep/13/future-of-food-how-we-share
The Guardian
Fish fingers celebrating their 60th birthday: How a simple staple stood the test of time
From a rudimentary breaded fish stick marketed with the rather unglamorous promise of “no smell, no fuss”, to a haute cuisine version consumed at the most exclusive restaurants in Mayfair, the humble fish finger has come a long way.
The first fish fingers were made by Birds Eye in 1955 at its factory in Great Yarmouth, Norfolk and the official launch took place on 26 September that year. And that means that the freezer stalwart of many a harried parent is about to celebrate its 60th birthday.
John Vincent, co-founder of healthy-eating restaurant chain Leon, said he jumped at the chance to add one of the nation’s favourite food items to his menu. “When I was first imagining what fast food in heaven would be like I imagined a fresh, healthy and sustainable Filet-O-Fish that you would eat after an art class with Michaelangelo,” he said. The result was Leon’s Fish Finger Wrap (top left), an item that became a bestseller almost overnight.
Further up the, um, food chain, the chef Mark Hix has a gourmet van that travels the country selling a fancy version. “We’ve had fish fingers on the menu for years”, he said. “They’re one of the biggest sellers. A few years back I set up FishDogs with Kevin Gratton – and we take them to festivals and food markets all over the country.”
The Independent
Food
Star chefs: Keep free school meals
The television chefs Jamie Oliver and Raymond Blanc have warned that any move by the government to scrap free school dinners for infants would be a “disaster” and could lead to rising levels of obesity.
The chefs speak out today as The Sunday Times publishes a letter signed by head teachers from nearly 500 schools calling on the government to extend the free lunch service for under-seven-year-olds to all children up to the age of 11. The chefs say pupils’ health, concentration and behaviour are better after having a healthy hot meal at midday.
Oliver said: “The free school meals initiative for all infants has been a major step forward for children’s health and academic performance. It gives kids a great start at school, opening them up to different foods, and crucially it is transforming the food culture in our schools by taking away the need for parents to make a packed lunch. It would be a disaster if it were to be taken away.”
Blanc added: “Millions of children — who just a year ago were eating sugary, processed packed lunches — are now eating a proper nutritious meal. It would be short-sighted and catastrophic to undo that.”
The chefs spoke out following reports that ministers are considering axeing the £600m free school meals programme to save money as part of the Department for Education’s spending review plans.
Free meals for four to seven-year-olds were introduced a year ago after the then education secretary, Michael Gove, commissioned the restaurateurs John Vincent and Henry Dimbleby to write a report about how to improve school food. They recommended a free meals scheme in primary schools.
Figures last year revealed that 85% of children now eat school dinners — a total of 1,640,530 — up from about 300,000 before free meals were introduced. The increase in take-up has made the meals service economically viable again.
Sunday Times
Leisure
Clock ticking for £1bn Moto bidder
A minority investor in one of Britain’s biggest motorway services operators has been given until the end of the month to see if it can hatch a £1.1bn takeover. The Moto chain of about 60 services sites is being sold by Australian bank Macquarie, which bought it and a clutch of food outlets from Compass at the height of the boom in 2006 for £1.8bn.
Equity Partners Infrastructure Company, a New Zealand investor with a 17.5% stake in Moto, is thought to be trying to exercise its right to make the first offer. City sources said it was trying to bring in investors, including Korean and British pension money as well as Chinese funds.
There is competition from a consortium formed by Morgan Stanley, 3i Infrastructure and Deutsche Bank. The sale reflects soaring appetite for assets with stable cash flows and dominant market positions. Investment bank Citi is running the sale.
Sunday Times
Economy
Living wage’s £2bn fallout
George Osborne’s living wage could cost Britain’s top retailers as much as £2bn by 2020 and force some to slash pensions contributions for their workers. Companies have been “downplaying” the impact but it could represent one of the biggest challenges “since the advent of the internet”, City analysts warn.
The chancellor announced in the summer budget that from April next year, the minimum wage will increase from £6.50 to £7.20 an hour for over-25s. He also committed to raising the rate to at least £9 an hour by 2020.
The government is facing a growing backlash from business leaders who say the measure will have unintended consequences.
Lord Wolfson, chief executive of Next, said last week that the living wage will cost the firm £27m a year and could force it to put up prices by 1%. Whitbread, the owner of Costa Coffee and Premier Inn, has also said it will look at “selective price rises”.
Morgan Stanley, the investment bank, has calculated the measure could increase retailers’ costs and reduce earnings by up to 4% of sales. “We believe this proposal represents the biggest structural challenge facing the UK retail industry since the adoption of the internet in the late 1990s,” said Geoff Ruddell at the bank.
With sales of listed retailers at about £50bn, the cost could be £2bn. If these costs were applied to Britain’s £300bn of annual retail sales, the impact could be as high as £12bn.
Ruddell believes it is unlikely retailers will raise prices because of fierce competition. He thinks they are more likely to slash pension contributions.
Resolution Foundation, the think tank, will also say this week that warnings of price rises are wide of the mark. “Warnings from retailers sound familiar to the outcry that preceded the introduction of the minimum wage,” said Conor D’Arcy, the foundation’s minimum-wage expert.
The fears over price rises come as Britain is once again expected to flirt with deflation, albeit briefly, in data released on Tuesday. Economists expect the consumer prices index to slip back to zero from 0.1% in August.
Sunday Times
Two more years for wages to catch up
Wages are set to return to pre-credit crunch levels in 2017, bringing an end to a decade of lost pay growth, according to the Resolution Foundation think tank.
On Wednesday, new figures from the Office for National Statistics are expected to show that average earnings rose by 2.9 per cent over the three months to July. Britain is already experiencing wage increases of 2.8 per cent, the joint fastest level of real pay growth in eight years and above the precrash rate of 2.2 per cent.
Low inflation and the surge in wages is helping Britain recover from a six-year squeeze on salaries, Resolution chief economist Matthew Whittaker said. He added that if the current surge in earnings continues, average salaries will return to pre-crash levels in mid-2017.
However, if inflation starts to rise or pay growth rates moderate, it may take longer. Whittaker said: “Britain’s pay recovery has settled in at a healthy 2.8 per cent, helped along by historically low inflation. After six years of falling real pay, this period of catchup growth is very welcome for workers. But it may prove short-lived once inflation picks up. Even in the optimistic scenario in which wage growth remains above-trend, it will be 2017 before the pre-crisis average pay level is restored, a decade of lost growth.”
Resolution calculates that average earnings are still more than £110 a week below where they would have been were it not for the credit crunch and subsequent recession. Prospects for stronger wage growth will ultimately rest on getting to grips with Britain’s poor productivity record, and ensuring that these improvements find their way into pay packets
The think tank says that to keep wage growth rates up, the Government will need to take steps to boost Britain’s low productivity rate. “Prospects for stronger wage growth will ultimately rest on getting to grips with Britain’s poor productivity record, and ensuring that these improvements find their way into pay packets,” Whittaker said.
Sunday Express
Technology
Trafford Centre owner unveils indoor mapping and deals app
Intu, the UK’s largest listed shopping centre operator in the UK, is rolling out a new app that sends offers to customers’ mobile phones based on their location.
Users will be able to see their location as a blue dot on a digital map of the shopping centre, plan a route between stores and see which retailers along their path are offering deals.
“This could change the retail environment,” said Karen Harris, managing director of Intu Digital. “It has phenomenal added value for customers and allows retailers to control revenue figures more than they could ever could before.”
A retailer that notices slow sales on a certain day would be able to send an offer immediately to app users walking by the store, encouraging people to enter the shop and spend money.
The FTSE 100 company – which operates nine of the UK’s top 20 retail destinations, including the Trafford Centre and Lakeside – hopes the app will help visitors discover stores that they would not usually visit and spend longer in the shopping centre.
“Footfall is difficult to shift in a big way, but you can affect dwell time, which has a big impact on turnover and frequency of visits,” Ms Harris said. “We could send an offer for a free cupcake and coffee to people who have been there for one and a half hours, so they would be encouraged to stick around and spend more.” Future versions of the app could also include a “find my car” feature.
The Telegraph
SMEs
Brighton leads way as NatWest launches 10 hubs giving free services to start-ups
NatWest bank is launching ten entrepreneur hubs at branches across the UK to provide advice and facilities to start-up companies.
The hubs are being launched in partnership with accountancy giant KPMG and start-up network Entrepreneurial Spark, with the first opening at a branch in Brighton last week.
Two more will open in Leeds and Bristol later this month, with seven more in other cities including Manchester, Cardiff and Newcastle next year.
Small Business Minister Anna Soubry has welcomed the scheme, saying the Brighton site would ‘promote enterprise in the region’.
The sites will give free IT services, free wi-fi and access to business mentors.
Mail on Sunday
