Weekend Press 1-2 June
Financial results and company news
Pub reform newswill cut tax revenues
Pub companies will convert to tax-efficient trusts if Government reforms go ahead, in a move that will deprive the Treasury of tens of millions of pounds in revenue.
Enterprise Inns, Britain’s biggest pub company, is planning to become a real estate investment trust (Reit) if the Government breaks the beer tie. The tie obliges pubs to buy beer from the group that owns them.
Groups would have no reason to keep the beer-selling and pub-owning business under one roof and would consider spinning off the property side. Reits are free from corporation tax as long as they pay out the bulk of their income each year to investors.
Enterprise Inns pays about £35m annually in corporation tax, while Punch Taverns pays about £16m.
Enterprise Inns won permission to switch to Reit status in 2008, but shelved the idea because of the economic turmoil.
Punch Taverns has considered the Reit option too and other big pub owners could also benefit.
Meanwhile it has emerged that the government is recalling pub companies and industry experts to its consultation on the future of the sector amid fears that its decision will be subject to legal challenges as a result of inaccuracies in information used in its consultation document.
The Mail on Sunday
Rothschild plans Byron burger takeaway
Lord Jacob Rothschild’s investment firm has emerged as a contender to buy Byron, the fast-growing hamburger chain.
RIT Capital Partners is one of a handful of bidders vying to acquire the restaurant operator, which is expected to change hands for between £90m and £100m.
It is thought that RIT faces competition from a number of private equity houses, including TDR Capital, a previous backer of Pizza Express, and Searchlight Capital, the American buyout firm.
Byron is being sold by Gondola, the group that now owns Pizza Express as well as the Ask and Zizzi chains. Founded by Tom Byng, Byron has grown from its debut site on London’s Kensington High Street, which opened in 2007, to more than 30 outlets today. The chain has spread across London and is now moving farther afield with branches planned in Liverpool and Manchester. It is on course to achieve earnings before interest, tax and other charges of £8m this year.
Investors have been keen to snap up hot new restaurant brands and capitalise on their potential future growth. Côte, the brasserie chain backed by Richard Caring, the fashion and leisure tycoon, is in talks over a sale to Bridgepoint, the private equity group. Red Hot World Buffet is a target for Risk Capital Partners, chaired by Luke Johnson, the serial restaurant investor.
The Byron sale is being handled by DC Advisory Partners, a corporate finance firm. All those involved declined to comment.
The Sunday Times
McDonald’s CEO claims he’s lost 20lbs while eating at the chain every day
The global chief executive of McDonald’s has claimed he lost 20lbs in weight – despite eating from the chain’s menu every day.
Don Thompson said he regularly worked out at a gym to lose the pounds but did not stop wolfing down the fast food meals whenever he could.
But his claims were met with scepticism on Twitter with some branding it the ‘McDiet’ and asking him to ‘prove it’.
Last week McDonald’s unveiled its most unhealthy item ever, the Mega Potato, which is a double size portion of fries. At 1,142 calories it is more than half the recommended daily calorie intake for a woman.
Mr Thompson said he shed the weight over the course of a year by getting up early in the mornings and going to the gym.
The fast food boss insisted he still ate at McDonald’s ‘every single day’, although he did not specify what he chose from the menu.
He admitted that despite McDonald’s trying to rebrand itself as healthier, its salads make up only 2-3% sales.
But he claimed the company was making efforts to include more vegetables in its meals.
Thompson, who has been on the job for less than a year, was responding to a question about how the company is adapting amid growing concerns about obesity when he pointed out his slimmer frame.
He said that he lost the weight by getting active again and noted that it’s rare to see Europeans that are ‘very, very heavy’ because they walk a lot.
“And so I think that balance is really important to people,” he said.
“I don’t see salads as being a major growth driver in the near future,” Thompson told investors in New York on Wednesday, according to Bloomberg News.
It’s no wonder the salads have failed to lure health conscious diners when they are often as fat-laden as a Big Mac and boast names such as Bacon Ranch and Southwest Crispy Chicken.
In comparison to poor salad sales, the restaurant’s Dollar Menu generates 13-14% of US business, he said.
But he claims the company isn’t giving up on selling fruit and vegetables. For instance, some of McDonald’s new McWraps have tomato, cucumber slices and shredded lettuce inside, he said.
McDonald’s first added tossed salads to its U.S. menu in 1987.
Bloomberg News reported earlier this month that it is considered ditching Caesar salads after it already got rid of Fruit & Walnut salads from its menu this year.
McDonald’s shares fell more than 2.2% to close at $98.28 on Wednesday, after the announcement. At one point they declined as much as 2.9% for the biggest intraday drop since October 19 and they continued to fall on Thursday.
The Daily Mail
Brand guru eyes sale of Suffolk brewery
The branding guru famous for naming HobNobs biscuits and the Mini Metro car is considering selling St Peter’s Brewery, the Suffolk beermaker, for up to £15m.
John Murphy started the beer business in 1995 after selling Interbrand, the consultancy he set up to advise companies on corporate and product identities.
He is understood to have held exploratory talks with two potential overseas buyers and is expected to cast his net wider in the hope of attracting more interest. Murphy is said to value St Peter’s at £12m to £15m. He looked at selling the business several years ago but was unable to clinch a deal.
The beermaker is housed in a 13th century moated manor house and has 35 staff. About half of its sales are in Britain, with the rest generated by exports to countries such as Russia. St Peter’s sells an estimated five million pints a year and also runs a single pub, the Jerusalem Tavern in London’s Clerkenwell district.
In 1996, Murphy was part of a consortium that acquired Plymouth Gin and made millions selling it six years later to France’s Pernod Ricard.
The Sunday Times
Economy and politics
£3bn slide in lending to small businesses
British companies are labouring under the biggest slump in business lending since last December as well as rising borrowing costs, alarming Bank of England data revealed on Friday.
The £3bn fall in loans and overdrafts extended to UK companies during April raises more doubts over the Bank’s Funding for Lending Scheme (FLS), which is struggling to kick-start business credit markets despite bringing down the costs of mortgages.
The latest decline was also almost three times the £1.3bn average fall in business loans seen over the past six months. Average interest rates paid by firms on new loans also rose to 2.86% in April, the dearest since last October.
Business leaders hit out at a £700m fall in loans and overdrafts to smaller companies during the month, far steeper than March’s £100m decline. Steve Warwick, London regional chairman of the Federation of Small Businesses, warned: “We have long said that there needs to be more competition and sources of finance for small firms because relying on the big five is clearly not working. To get the recovery on a firmer footing, businesses need to access finance and greater competition in the banking sector should help this.”
The Treasury is attempting to improve the impact of the FLS by offering much bigger incentives for banks to lend to small businesses. But Bank Governor Sir Mervyn King has said the tweaks are “not a game-changer” as caution over a tough economic outlook tempers demand for loans.
Capital Economics UK economist, Samuel Tombs, said: “It is too early for the lending figures to reflect any boost from the recent extension of the FLS. But as things stand, the continued weakness of bank lending remains a major reason why we expect the economic recovery to struggle to gather pace in the foreseeable future.”
The Independent
‘Fake shops’ open up ahead of the G8 summit
With the globe’s most powerful figures descending on their doorstep, bringing with them the attention of the world, it is not surprising that the authorities near to next month’s G8 summit have tried to spruce the place up a bit.
But officials have been accused of going too far after they plastered large stickers across boarded up shops in order to give them the appearance of still-thriving businesses.
Locals in the area have criticised the move, which they say masks the effects of the economic downturn and is a waste of resources.
The large stickers have been fixed to closed-down stores near to the Lough Erne resort, in County Fermanagh, Northern Ireland, which will host next month’s meeting of the leaders of eight of the world’s richest countries, among them Barack Obama, Angela Merkel and François Hollande.
The site was selected by David Cameron – as Britain is the current chairman of the G8 – and he said it would be a “brilliant advertisement” for Northern Ireland. But businesses in the area have suffered in recent years, leaving many vacant sites which are now being disguised by the local council.
One set of stickers have been fixed to a former butchers in Belcoo, on the border between the province and the Republic.
They show the shop – which traded as Flanagan’s until it went out of business about a year ago – still fully stocked with a selection of fresh meat on display. A sticker pasted on a closed door even shows an open door and an apparently well-adorned interior. Another set of stickers have been put up in the windows of a former pharmacy in the village, to give the vacant site the appearance of an office supply stores.
In nearby Maguiresbridge, a “fake” coffee shop has been depicted in another vacant property, while in Garrison, a derelict house has been given the appearance of a much-loved, occupied home.
Phil Flanagan, a member of the Northern Ireland, said: “These fake buildings are in every town and village in Fermanagh now. People are amused by them. No one is fooled. It is like when your mother-in-law is coming to visit and you give the house a tidy up.
“It is not part of regeneration. It is just for the G8. It is a case of papering over the cracks and putting out lies about the economy. Most people seem to think it is a waste of money.”
As well as the fake interiors, other images have been fixed to boarded up shops. An empty shopping centre in Enniskillen has been decorated with large photo displays of local picturesque sites.
The work is being overseen by Fermanagh District Council, with funding from the province’s Department for Social Development.
In total, more than 100 properties near the Lough Erne five star hotel and golf resort have been tidied up or redecorated, including Enniskillen’s Clinton Centre, opened by the former US president on the site of the 1987 IRA bombing of a Remembrance Sunday service, which has been given a cream makeover.
The Daily Telegraph
Food and drink
Sun promotion offers two meals for £9.50
This summer, The Sun brings you great Meal Deals from over 700 restaurants and pubs nationwide from as little as £9.50.
With Meal Deals, you can get either 2 courses for 2 people from only just £9.50 or 2 courses for 2 adults and 2 children from just £15 available at lunch and dinner.
Whether you fancy a delicious homemade pizza with that special someone or a hearty pub lunch with the family, this offer is perfect for you!
It couldn’t be easier to take part. Just collect four of the seven differently-numbered tokens printed in The Sun, then attach your tokens to the voucher we will print on Tuesday 4th June. Make your restaurant booking and hand in your voucher upon arrival.
Vouchers will be valid any time up until Wednesday, July 31, 2013, subject to availability and the restaurant’s individual terms.
Participating pubs and restaurants include: Beefeater; Brewers Fayre; British Carvery; Do Drop Inns; Dragon Pubs & Thai Restaurants; La Tasca; Pizza Kitchens & Bar; and Table Table.
The Sun
Ice in six out of ten restaurants contains more bacteria than toilet water
The ice served in six out of ten of Britain’s most popular high street restaurants contains more bacteria than the water found in their toilets, an investigation by The Mail on Sunday has found.
Scientific tests have shown that ice from branches of McDonald’s, Burger King, KFC, Starbucks, Cafe Rouge and Nando’s all had higher levels of bacteria than samples of water taken from their lavatory bowls. Experts say it could be due to them being cleaned more often than the ice machines.
None of the samples found presented an immediate health danger, but four contained such high levels of microbes the restaurants should be considered a ‘hygiene risk’, according to a Government-accredited laboratory.
The samples from McDonald’s, KFC, Burger King and Nando’s all suggested ‘poor hygiene’ over their ice, the laboratory said.
In the cases of Nando’s and Burger King, the levels of bacteria in ice were more than double than that which the scientists said they expect to see in drinking water.
For the tests, staff were asked to provide a sample of ice in a sterile bag. A sample of water in the restaurant toilet was also taken by an accredited environmental health practitioner.
The samples, obtained from branches of ten chains in Basingstoke, Hampshire, were then couriered in a fridge to Microtech Services Wessex in Bournemouth, Dorset, for testing.
HOW THEY COMPARED
NANDO’S More bacteria in ice than toilets. Tests on ice water at 22C: 2,100 organisms. Toilet water: 1,300 organisms.
BURGER KING More bacteria in ice than toilets. Ice bacteria at 37C: 260 organisms. Toilet water: Within drinking water regulations.
McDONALD’S More bacteria in ice than toilets. Ice bacteria at 22C: 1,400 organisms. Toilet water at 37C: 260 organisms.
KFC More bacteria in ice than toilets. Tests on ice water at 22C: 1,100 organisms. Toilet water: Less than 1.
CAFE ROUGE More bacteria in ice than toilets, but not above laboratory’s hygiene guidelines. Toilet water: Less than 1.
STARBUCKS More bacteria in ice than toilets but within laboratory hygiene guidelines.
PIZZA HUT Bacteria in ice at 22C: 430 organisms. Toilet water exceeded drinking water standards.
PIZZA EXPRESS Bacteria in ice insignificant. Toilet water: 3,200 organisms at 22C, highest in study.
GOURMET BURGER KITCHEN Bacteria in ice insignificant. Toilet water: Within bacteria count guidelines.
WAGAMAMA Ice bacteria at both temperatures less than 10 organisms. Toilet water at 37C: 160 organisms.
All per ML
Experts said the samples from McDonald’s, KFC, and Nando’s showed that contamination was likely to have been caused by ‘environmental issues’, such as a dirty ice machine.
The Burger King result suggested the cause was human contamination, likely to be from a staff member failing to wash their hands.
The results have prompted some of the chains to review their cleaning procedures, although two companies disputed the findings.
The Mail on Sunday
New ales hail the beer tax cut
Two new ales have been brewed to mark The Sun’s Axe The Beer Tax campaign victory.
Chancellor George Osborne and his Treasury colleague at 11 Downing Street, Sajid Javid, have been honoured with beers after cutting 1p off a pint in March’s budget.
Pennies From 11, made by Mr Osborne’s local Tatton Brewery, Cheshire, and Sajid’s Choice from Bird’s Brewery in Mr Javid’s seat of Bromsgrove, Worcestershire, will go on sale in the Commons.
Thanks to the Budget cut and our campaign Brits could down half a billion extra pints in the next three years.
Meanwhile, thousands of pubs could be at risk from an industry revamp.
Ministers want to axe “beer ties” where landlords have to buy booze from one big firm in exchange for lower rents.
Critics say this means tenants are charged over-the-odds for alcohol.
A fairer deal, targeting giant “pubcos” of more than 500 boozers, could save £100million a year.
But insiders fear axing ties would price tenants out of buying pubs and prompt a flood of sales.
The Sun on Sunday
Half of us can’t cook by the age of 18
Almost half of Britons admit they were unable to cook properly as young adults and say their children are no better.
According to a YouGov poll of nearly 2,000 adults for The Sunday Times, 44% could not cook five different hot meals by the time they reached 18, and 46% said their children could not achieve that target.
Many rely on takeaway meals and packaged foods with almost a third eating a home-cooked meal on three or fewer nights a week; 5% never eat a meal cooked with fresh ingredients at home.
Despite that, 76% believe they have a healthy diet.
The survey suggests that a lack of cooking skills is partly generational. In the 1970s, many families relied on ready meals. Children, especially boys, were rarely taught to cook. The survey found that people over 60 are more likely to cook meals from scratch instead of eating takeaways or ready meals.
John Vincent, who is advising the government on school food, said he was unsurprised. Vincent and Henry Dimbleby, co-founders of the Leon chain of restaurants, have persuaded the government to introduce compulsory cookery classes for children aged 7-14 from next September.
“Teaching people to cook is a fundamental human right. In a five-year period in Finland, various measures, including more cookery lessons in schools, transformed the health of the nation. We hope the same thing will happen here,” said Vincent.
The Sunday Times
Food safety testing to be beefed up
Whitehall officials are to take a tighter grip of efforts to guarantee the “authenticity” of British food in a desperate attempt to rebuild confidence in produce following the horsemeat crisis.
The Department of Environment, Food and Rural Affairs (Defra) is to take joint control of an official body designed to improve work to test products, spot risks and prevent dubious items entering the food chain.
Trading standards officers will also be forced to improve their monitoring of food on sale, under an “action plan” to be discussed by the Food Standards Agency (FSA) this week.
The report on “food authenticity” will lay out plans to protect the food chain by stepping up national co-ordination of testing and monitoring by local authorities, “setting priorities for sampling and analysis … targeting enforcement action, and opportunities for the FSA to play a stronger role in guiding activity”.
The paper reveals that the number of food samples taken by councils has fallen in recent years, dipping by 14.6% in the year to 2012 alone. And it warns the effectiveness of the testing programme could be threatened by government cuts.
The “action plan” is the first official acknowledgement of failures in the system set up to protect consumers from contamination of the sort that was exposed – through investigations in Ireland – in January. A government inquiry into the adulteration of processed beef products with horsemeat and pig meat, and an FSA review led by Professor Pat Troop, vice-chair of Cambridge University Hospitals, are expected to finish this year.
But the FSA proposal to “ensure effective consumer protection” reveals that the decision has already been made to have the Authenticity Steering Group, which spearheads efforts to prevent food fraud, run jointly by the FSA and Defra.
Andrew Rhodes, the FSA’s director of operations, said part of the steering group’s remit would be to “ensure that the authenticity programme is targeting the right priorities to make sure enforcers have the methods they need to address emerging food mislabelling and food fraud issues”.
Mr Rhodes’s report also concedes that the FSA needed to improve relations with the food industry, which had “sometimes been cautious in sharing intelligence on risks with us in case specifics emerge… that compromise their commercial interests”.
The Independent on Sunday
Well-heeled mwomen are now leaders in the boozing league
Wealthy ‘ladies who lunch’ in Britain’s most prosperous areas drink more alcohol than any other group, research has found.
Women in Knightsbridge and Hampstead in London, Esher in Surrey and Merchiston in Edinburgh are twice as likely as average to exceed a recommended limit of three units a day.
Daily Mail
Interviews
Interview with William Jackson, Bridgepoint
Crayfish and rocket, chicken and avocado, BLT — William Jackson has had them all. He buys lunch at Pret A Manger at least three days a week, and picks up breakfast there just as often. “I’m very familiar with the product range,” he says.
But, then, Jackson is no ordinary customer. As well as being chairman of the sandwich chain, he is boss of Bridgepoint, the private equity firm that owns it.
It’s a sort of reverse Victor Kiam situation — he bought the company, so now he loves to use it. Luckily, Pret opened a branch next door to Jackson’s office off London’s Regent Street, although the 49-year-old insists that’s mere coincidence. It certainly makes it easier to keep an eye on things, which is especially handy when you own consumer-facing businesses. Despite the economic climate, Jackson’s private equity firm is increasing its exposure to the British public’s tightening purse strings.
Bridgepoint is in talks to buy the Côte restaurant chain for up to £100m and already owns Fat Face, the clothing chain, Hobbycraft, the art and craft retailer, and Wiggle, the online bike store. Another investment is Dorna, the firm that owns the rights to Moto GP racing, which Jackson also chairs.
Owning such prominent businesses has proved a double-edged sword for buyout firms in the past. Those that took control of the AA became a lightning rod for discontent over the methods of the private equity industry. Howls of protests from the trade unions led to some of the most senior buyout chiefs being given a grilling by a parliamentary committee in 2007. If the banking crisis had not broken, providing a fresh target for public anger, they might still be in the line of fire.
Jackson, grey haired and bearing a passing resemblance to Tony Blair, remembers the period well — “hard-hat time”, he calls it — but says that a lot of the criticism is just plain wrong. Asset-stripping, for example. “It’s rubbish. You couldn’t really make money if that was your strategy.”
Like almost all private equity firms, Bridgepoint raises money from investors such as pension funds and adds borrowed funds to buy companies. It typically owns them for three to five years and then sells on, hopefully for a juicy profit.
Bridgepoint has shunned monster deals in favour of buying businesses worth less than €1bn (£850m) and, although it invests in many sectors, it has a penchant for retailers, leisure companies and food and drink brands.
Things don’t always work out. Faith, the footwear chain, was one of the more notable disappointments. It collapsed in 2008. Jackson concedes that the only certainty is that deals never go according to the initial business plan. But he thinks his firm gets it right more often than not.
“Take Pret — it was formed in 1986 and by 2008 it had got itself to £28m profit. Since then, that has doubled, with a partnership between private equity and entrepreneurial management. I don’t think that’s a coincidence.”
See full interview here
The Sunday Times
Interview with Bruce Dickinson, Iron Maiden
For a man whose fortune is estimated to be in excess of $100m (£66m), Bruce Dickinson does not need to work, let alone juggle the creation of a new airline and aircraft maintenance business with the demands of a 36-date world tour during which he will play to a combined audience of some 1.5m in 30 different countries.
But then the Iron Maiden frontman is no ordinary millionaire. Sitting with his battered WH Smith desk diary and a 10-year-old Nokia mobile phone in front of him, Dickinson eschews the trappings of wealth in favour of juggling his passion for playing to large audiences with what has become the 54-year-old rocker’s day job.
“The reason I do all the things I do now is because I love them. Life is too short to do the things you don’t love doing,” says Dickinson. “If your only arbiter of anything is money, really you should… go and rob banks.”
Instead, Dickinson has chosen to invest his time and some of his fortune in a Welsh aviation business he hopes could employ as many as 1,000 people in five years’ time, and in the creation of a new beer, which Dickinson himself spent six weeks tasting and sampling at Robinsons Brewery in Stockport until he was happy with the flavour.
“It’s going to be in 10,000 pubs next week,” he says, citing JD Wetherspoon, Enterprise Inns and Punch Taverns as pub companies who have signed up to take deliveries. “I had no interest in a limited edition, slap-a-label-on-it beer,” says Dickinson, who estimates that in a fortnight, some one million pints of the beer – called Trooper after one of the band’s songs – will have been sold. “It’s the fastest selling beer they’ve ever produced,” he says of Robinsons. “I’m going the blow the doors off the brewery.”
As with everything else he puts his mind to, for Dickinson, there would seem to be no half-measures.
See full interview here
The Sunday Telegraph
Ian Gregg - being a bread winner for 50 years
Ian Gregg, 74, led the eponymous family business from a single shop in 1964 on Tyneside into a public company in 1984 with several regional bakeries and 300 shops. Today, Greggs is a £416m company with 1,600 branches and more than 20,000 staff.
The son of founder John Robson Gregg, he was just a boy when he first joined his father at work, selling pies from a van to miners’ wives in Newcastle.
Q. Did you think you would get to where you are?
A. No, I did not. I set out at 25 with a view to running a small business in Newcastle, but it just took off. Our success on Tyneside from the mid-1960s and during the 1970s was phenomenal. Within 10 years the annual turnover went from £100,000 to more than £5m.
I joined Greggs after university in spite of my parents’ wishes. They wanted me to go into a profession, which I was doing until my father died aged 55. I took on the business with my mother, who primarily looked after the catering side.
I became chairman of the company in 1984, and Michael Darrington (now Sir Michael) took it from 300 shops to around 1,300 before he retired in 2008. I feel very proud that Greggs has grown to this extent, and pleased that the business has offered a lot of opportunities to the people in it. I retired as chairman in 2002, but I remain a shareholder.
Q. When you had made your first million did you want to slow down?
A. Greggs’ first million-pound profit was in 1982. It was certainly a huge milestone. I can remember that we had a dinner to celebrate. We invited senior managers and people who had helped the business, and even some of our competitors.
I had no intention of slowing down because we were forging ahead. I was in my early forties, and we had 250 shops in the north of England. We were keen to go into the Midlands, Wales and the South.
Q. What is the secret of your success?
A. We provide excellent products that are good value, our staff are enthusiastic and friendly, and our shops are conveniently located. We have got about nine strategically located bakeries to make sure the products are fresh. We try to run the business according to simple old-fashioned values that reflect roots and family traditions, including the revival of recipes like “stottie” cakes in the north east. The extent to which Greggs has penetrated the national psyche in the past 10 years has really surprised me. Since 2000 we have become part of the British culture.
Q. What is your basic business philosophy?
A. Look after your customers and staff, and if you do that the shareholders will do alright as well. My ethos is to treat everybody fairly and with respect. It is also important to put something back into the community and share success. Greggs’ staff members enjoy 10% of the annual profits under our profit-sharing scheme.
Q. How did you expand into London and the south east?
A. With great difficulty. It was always a difficult market. The people don’t have a big tradition of eating sausage rolls and pies so we had to educate southerners to these delights. It was 15 years before we made any profit. We just persevered.
It is harder to get staff loyalty in London because people move around more. Elsewhere you can reach shops more easily and if necessary make multiple deliveries each day, but in London you cannot do that because of the traffic. Another problem in the 1990s was the cost and availability of sites. There was strong competition from takeaway units, coffee bars and mobile phone shops, which resulted in an escalation of rents.
See full interview here.
The Weekend FT
And finally…
Icing’s in the cake for cupcake craze
It was part of the Sex and the City vogue that for almost a decade defined sinful excess in New York. But just like Carrie Bradshaw and her friends, the gourmet cupcake industry is beginning to look stale.
The transformation of a humble snack into what one food writer described as “the sugar-frosting of America” is believed to have begun at the Magnolia bakery in Greenwich Village, a haunt of Bradshaw and her set.
Yet the obituaries are now being written for a fad that spread around the world. There were reports this month of cupcake overload in Dubai, where a dozen or more boutiques cater to sweet Arabian teeth.
“I worry that cupcakes have had their day,” said one Dubai retail analyst.
Also worried are the Wall Street investors who plunged into bakery stocks as cute little American cupcake shops suddenly turned into mushrooming global franchises.
“The gourmet cupcake market is crashing,” The Wall Street Journal declared, noting that shares in Crumbs Bake Shop, a New York-based chain, had plunged from a 2011 high of $13 to $1.70.
Behind the grim financial data lies a tale of over-ambition, calorific excess and feminist revolt. The glamorous indulgence of Sex and the City has given way to associations with obesity, binge-eating and what a feminist website complained was “our cultural fixation on eternal girlhood”.
Yet it had all seemed such a lark when cupcakes ruled the new millennium and the industry sprang up, peddling recipe books and home-bake gadgets. Television producers leapt in, making stars of photogenic bakers such as Candace Nelson, who is credited with opening the world’s first cupcakes-only bakery in Beverly Hills in 2005.
Nelson turned her Sprinkles brand into a franchise, and became a judge in Cupcake Wars, a reality TV series that pitted cupcake chefs against each other.
Then there was Georgetown Cupcake, a Washington bakery run by sisters Katherine Berman and Sophie LaMontagne. They earned their own reality series, DC Cupcakes. There are rarely queues outside today.
The backlash may have set in with Michelle Obama’s anti-obesity campaign. Most damaging may have been the hit series Girls, which has become the antithesis of Sex and the City.
When Lena Dunham’s grungy lead character munched miserably on a cupcake in the bath, “they became symbols of female depression and loneliness”, said New York magazine.
Style-setters have already found an alternative snack to go gooey about. Long live the cronut, a flaky combination of a croissant and a doughnut.
The Sunday Times
