City Diary — 15 July

No lounging around

JD Wetherspoon gained a real foothold by expanding through the recession of the early 1990s thanks to cheaper property and rents. It's looking to repeat the trick right now. Is there anybody out there who is replicating the Wetherspoon formula in this recession? Step forward City Diary's top tip: West Country café-bar operator Loungers.

The impressive outfit was founded with just £10,000 of capital each from Alex Reilly, Jake Bishop and Dave Reid. There's been no fresh capital since and the trio are up to 15 sites with plans to get to 40 by the end of 2013. The entire rent roll across 15 sites is £493,500 — a remarkably low 3.9% of current turnover. Like-for-like sales are currently up 7.72%. "We already have one more site in Bristol than Pizza Express," says Reilly. A second brand, Cosy Club, opens in a converted college in Taunton shortly.

ETM bags itself a Punch freehold​

So many pubs have been flying out of the stables of Punch Taverns it's been a bit hard to keep track of who has bought what. Here's one more for the list that somebody should be keeping. Turns out that whizzy London-based gastropub operator ETM Group, headed by brothers Ed and Tom Martin, bought the freehold of the Gun, in Docklands, earlier this year. It's a great site, rescued by ETM from neglect a few years back.

It's so busy that it employs two full-time staff members to organise events, hosting up to six a day. "We've just bought the freehold and it's allowed a new phase of development," ETM operations director Hannah Bass says. City Diary hears ETM has another freehold acquisition lined up.

Not too hard to swallow​

Good news and bad news on the pub food market from research firm Horizons. Boss

Peter Backman reports that the pub sector is now offering fantastic value compared with our restaurant cousins. The average price of a three-course meal in a pub is £15 compared with £20 in a restaurant — the £5 gap has widened a bit since January 2009. Pubs are offering better value, "presenting a real challenge for the restaurant sector", he notes. There's been a dramatic change in the past two years with pub restaurant sales up 20%. The bad news? Tenanted sector food sales are down 9%.

Ça va bien, monsieur?​

Our friends at Britvic completed the acquisition of French soft drinks producer Fruite about a month ago. Has chief executive Paul Moody noticed any cultural differences with the French? "In France you never have a meeting that starts at 12 because it runs into lunch — and lunch is sacrosanct. So the first meeting we had with the integration team, which was already scheduled — what time did we set it for? One o'clock.

But a more fundamental difference is around hierarchy. Within our business, no one would dream of calling me Mr Moody but in France that is all they said, no matter how much I tried to dissuade them." It's called being polite to foreigners, Paul.

Living it large in Prague​

Beds and Bars boss Keith Knowles is never less than, er, straight to the point. Its new Prague site is booked to the gunwhales a few short weeks after opening — and fourth in the world in terms of bookings on the biggest hostel-bookings portal.

He told his staff last week: "It shows just where we have got to on all the hard yards/years we have put into building our brands to be at more or less 100% full. Well done — you're a fantastic group of people." He add a Knowleism for good measure: "One day the banks will fill the void of their scrotums and back us again."

Liquid has been liquidated​

A regular discussion point at the moment is whether the Big Room nightclub is dead — or in need of more creativity. In Wigan, nightclub company BBH Leisure, which has 20 sites, has bought the town's biggest nightclub, Liquid & Envy, from Luminar. It reopened the venue as two sites: Liquid is now called Elements and will provide entertainment with a new-look layout; Envy will be converted into Legends, Wigan's first '90's bar aimed at a slightly older clientele.

Ryan Kemp, marketing manager, said: "Liquid was a massive club and at the weekend it was very hard to fill, so we have turned it into two separate venues. Liquid was known for painting everywhere white; we'll be painting it black, with some very chic wallpaper."

M&B puts faith in the Irish option​

Proof that some wet-led brands with a foodier element have a future at Mitchells & Butlers. The company has applied to convert its Scream pub, the Tron, in Edinburgh into an O'Neill's Irish pub. It wants to build a larger kitchen and reconfigured seating to make it more "diner friendly" though.

Analyst embarks on Enterprising pub hunt​

Intrepid KBC Peel Hunt analyst Paul Hickman has being touring a few Enterprise pubs in the company of a business development manager (BDM). And his conclusions? "Enterprise pubs can and do trade well. Licensees' skills are very variable and some are very resourceful.

"On the evidence of this BDM, Enterprise field- management is intelligent, committed and increasingly sympathetic to licensees' concerns following the BEC Government enquiry last year. There is a real recognition that the share of profit needs to be adjusted, and this is likely to result in lower beer prices that will make future tenanted pubs more competitive, but decrease the company's share of beer income over time."