A Premium Way to Ride Out the Recession

LONDON, October 3, 2011 -

- The Orchid Touch Helps PBR Bloom

Latest figures from Orchid’s Premium Bars & Restaurants question the recession with strong trading figures showing a year on year sales increase of 3%.  Since 2009 Orchid has invested over £3m transforming 16 businesses.  The results are clear to see with Invested businesses delivering 20% greater LFL sales compared to the un-invested businesses.

36 Premium Bars & Restaurants were acquired in December 2009 made up of The Living Room and Ultimate Leisure bars and nightclubs.  In just under two years since Orchid took the reins, a host of changes have been implemented and as a result, the division is thriving.

The main focus has been to enhance the customer experience through focussing on investment, offer development and by creating a culture where employees are passionate about working for PBR, something that had been lost when the business was in administration.   The net result of this has been improved sales and profitability driven by a dramatic reduction in discounting and voucher led offers which had become a mainstay in both UL and TLR businesses.

Central buying coupled with benefits from Orchid’s approach led to improved retail standards around stock and controls with managers and teams all helping to drive profit. Orchid works on the belief of ’sanity over vanity’ - that you should protect the profit line (sanity), rather than driving the sales line at any cost.  This is exemplified by strong food margin performance with a YTD performance of up 4% from when Orchid acquired the business.  This growth is testament to Orchid’s approach to purchasing and commodity tracking and is on the back of VAT increases and prolific annualised UK food inflation in-excess of 8%.

The introduction of a new payroll system Fourth Hospitality has resulted in efficiencies in wages with a saving of over 4% versus 2010.   The saving has not hindered service with Retail Eyes showing the Living Room matching the likes of Pret on NPS (net promoter score) with 53.8% YTD.

Orchid is very proud of its award winning internal training & development programmes. Since 2009 Steps to Excellence has seen 11 Managers being internally promoted through to general manager positions.

The Living Room

• 8 investments have been carried out from Liverpool to London with a total spend (since 2010) of just £1.5m (meagre by modern standards). The Living Room Manchester has achieved a 14% YOY sales increase as a result of its £150,000 investment, Liverpool 28% and Leeds 10%.  Prohibition at St Katherine’s Dock, London was also repositioned to a Living Room bringing the total number bars to 14.
• Staff turnover has fallen by 28% and there has been an increase in training with 98 Management Development Programme modules completed over the past 12 months.
• Redefining the menu - In 2009 over 60% of all menu items were bought in.  This figure is now less than 20% with a greater than ever focus on freshness.  Orchid has ensured dishes are now about quality, provenance but cooked simply to let their flavours shine.  There’s a new Express menu, more premium ingredient’s and support for small producers such as Callestick Farm Cornish dairy ice cream.  The Living Room works with Callestick to develop new flavours each season.
• Award winning PR & CSR campaigns: From ‘The Suit Amnesty’ to ‘Music Magpie’, The Living Room is known for its high profile press campaigns coupled with a strong corporate social responsibility ethic.  The Suit Amnesty has been shortlisted for a Pride of Britain award which takes place this November.
• New website - built with the latest HTML5 technology, www.thelivingroom.co.uk marries social networking with data capture mechanisms. Investment in the database management system helps centralise and enhance control.  The Living Room now has over 500,000 customers in its database, a 40% increase on 2009. Website traffic is increasingly coming from mobile devices so The Living Room is set to launch a new mobile website this November allowing customers to book tables, view menus and search for restaurants nearby.
• Proud to recommend - Orchid has invested heavily in a new customer experience scheme to ensure consistent quality and reward staff members who excel.  Customer experience is currently running at 84% YTD with NPS at 53.6% (industry leading).

Ultimate Leisure

• Ultimate Leisure 2011 YOY sales performance is sector leading at 4.8% (contrasting sector rivals including Luminar’s c20% decline).
• 8 venues have seen capital investment ranging from £50,000 to £250,000. YOY sales at Riverside in Newcastle increased by 239% in the following 12 months post investment.  Other examples include Cotton Factory (Huddersfield) +44% YTD and Halo/Quilted (Leeds) +57%.
• Differentiated and compelling reasons to visit - Orchid has reinvigorated the sector, injecting new ideas from Champagne beds to the latest audio visual effects.  Bambu in Newcastle re-launched with a host of new features including the ‘Party Pods’ concept - a unique style of Karaoke booth where you can record yourself singing as a memento of your night.  The venue has seen a sales increase of 28% compared to pre-investment.
• Digital & Data - Prior to Orchid acquiring the PBR business Ultimate Leisure had absolutely no online presence. UL was tracking way behind its competitors, outdated, unloved and without a digital strategy.  Orchid has launched new websites for every bar and club and social media channels are now gathering momentum.  Web traffic for Ultimate Leisure stands at 25,000 visitors a month with over 60,000 fans on Facebook.  A database of 60,000 18-30s has been created from a zero start; this will grow to well over 100,000 by the end of 2011.
• ULOVE IT privilege card - driving guest loyalty and repeat visits, already 15,000 people have signed up to the scheme.
• National format entertainment activity - successful events securing topical acts have seen sales soar.  For example BCM’s at Beach, Belfast (the famous club from Majorca) drove incremental footfall of 380 customers on the night. Tapping into the rise of reality TV stars has also worked - the September TOWIE tour during fresher’s week drove 400 incremental admissions at Halo in Leeds and saw a 100% sales increase at the Cotton Factory in Huddersfield.

• Trialling new food propositions - live in three sites so far, a new pizza offer has led to an increase in food sales opening up the late night snacking market as well as driving daytime trade.
• Investing in people -Managers incentives, support, training and regular roadshows, forums and workshops. 
• Close knit team - members of the Ultimate Leisure team have just completed the Great North Run together, raising £3000 for children’s charity, Get Kids Going.
• Unique CSR ideas - Ultimate Leisure’s ‘Bra Bank’ campaign won national acclaim and collected 20,000 bras which were distributed to women in rural Africa as well as being recycled to raise hundreds for Breast Cancer Care.

Simon Dodd, Orchid’s People & Commercial Director comments, “We’re very proud of how far Premium Bars & Restaurant has come in just two years under Orchid’s care. The division fits in perfectly with our existing portfolio and our shared learning and skill-sets have been mutually beneficial across the business.”

He continues, “It goes to show that with strong management and evolution, it is possible to do well despite the current economic situation.”

For more information on the Orchid Group visit www.orchidgroup.co.uk, follow Orchid on Twitter @orchid_group or Facebook www.facebook.com/#!/Orchidpubsanddining. 

Contact: Katherine Sparkes, +44(0)1179739019, E - pr@orchidgroup.co.uk

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