Pubs or Houses for Sale?

Like many others in the trade I get a daily barrage of of Pubs for sale, but at least 8 out of 10 of these properties aren't commercial premises at all - they're houses. I say let them return from whence they came.

Historically the pre- 20th century Pubs largely evolved from village or small town housing stock. Someone spotted an opportunity in the early days of the industrial revolution or before and started brewing beer in their backroom; and what do you know you've got a Public house. Then they became licensed and that added value to the building. And somewhere along the line these 'Houses' with their licenses to sell alcohol became for a while at least commercial premises, in a time when the expectations of the punter and reasons and frequency of visit were a whole lot different.

It was a world where in every town and village there lived a large population of working men, a good number of whom were 'allowed' or culturally expected to be drinking in their local 5 or 6 nights a week from after tea until closing time.

As we all know that market has long died. Actually it really has long died, perhaps 30 - 40 years in some areas, less maybe in heavy industrial areas, but even those its got to be 20 now. But somehow or other the cultural ghost left behind by this market carried on in some shape or another. There are still parts of the population visiting Pubs to drink beer on a regular weekly basis but in many non urban areas that group is too small to be economically viable. The Young pre married market need 'Bars' and cafes to meet in, but their requirements and expectations are way beyond the village or community locals standard. They aren't visiting 'houses' they are using urban commercial spaces; easily refitted every few years; air conditioned; lighting controlled.

So let the houses return to housing stock, and let those Pub businesses which are large enough and have evolved into viable commercial sites thrive. Some Local authority reluctance to let 'Houses' go back to residential stock because it happens to be the last Pub in the village is actually damaging to the sector as a whole. Stronger sites are weakened at this time by the stretch on market share created by these false sites. The fact there is still a stream of well meaning amateurs queuing up to fulfill their dream of running a pub, feulled by low entry costs and somewhere to live is just simply holding back investment and risking the independent Pub restaurant sector altogether.

Let em close for God's sake

A Big Challenge

Lately I have to admit to having been somewhat gloomy about the whole independent Pub sector.

It has recently seemed to me that the pressures of declining bar drinking in all sectors except the young (and I don't just blame that on cheap super market booze and the smoking ban) and the unstoppable drive of the big corporate operated pub restaurants and branded eateries could only do one thing to the poor old independent middle; and that was squeeze it to a long slow but inevitable death. ( Or at least reduce it back to far far smaller niche group of specialists).

And then I meet John & Tracy. John is a farmer who has lived in a small village in North Shropshire all his life, and he's gone and bought the village pub. Trouble is the village pub is a burnt out shell! And now for varying reasons many of them altruistic John's determined to bring it back to life, rebuild it himself and re open it with a flourish and a bang.

And hearing this story has relit a little spark in my mind; its not all doom and gloom and with the right determination, a little luck, plenty of personality and a busy canal just down the road, well you never know. And I think its served as a reminder to me that Pubs are still a little unique, they aren't all just corporate balance sheets, they can be made too have living personalities and it is still possible to make customers drive 30 minutes down country lanes for something special!

Watch this space.....

Bristol B&B Owners - Don't Panic

Following the B&B Gay Stay ruling many small hoteliers are going to be asking themselves does this mean I am now forced to accept any customer on request, irrespective of whether I as the owner want to or not. I can reassure you this isnt the case.

Peter and Hazelmary Bull's only real crime was naievette.

The Judges ruling that the couple had directly discriminated by saying their rooms were only for married couples has absolutely no baring on the fundamental right of restaurants, pubs and hotels to not supply to customers with food and lodging only THEY want to.

What they can't do is to refuse on certain grounds such as race, sex, creed; but the fundamental point is they aren't required to give a reason not to supply. Pubs ( despite their name Public) restaurants and Hotels are not public spaces, they are private businesses offering services to whom they wish. (Its usually assumed most operators want all customers!)

The Bulls mistake as fairly green and essentially 'amateur' operators is they actually gave a reason. Since the dawn of Christainity Innkeepers and Hoteliers have been making up reasons to explain to customers why they can't stay. There is no room at the Inn (We lost your reservation, and everyone else has arrived) - in reality there was still three rooms to check in but the Receptionist figured Joseph and Mary looked the most gullible and would take the line without too much fuss; they even took the Stable.

In other words you aren't required to tell the truth, we never have been, its always been about managing customers expectations in a crisis.

So next time you Christian's feel abit uncomfortable with guests that turn up not quite fitting your pre determined biblical ideas of how couples should be, try these :

We've had a flood, and your rooms a wreck.
Theres been a power failure in your wing and we can't get an electrician until tomorrow
We lost your reservation, Im so sorry, we've booked you into another Hotel.

Honestly theres loads more....

But what I think we can all agree won't work and never would is..

'I am so sorry we can't give a room, cos God hates poofs'.

Loyalty Cards

Just found this free research on YouGov.


21 April 2010
Loyalty card schemes NOT creating wide-spread customer loyalty, according to new YouGov research

A major new report from YouGov SixthSense on loyalty schemes in the retail sector reveals that 93% of shoppers would not stop shopping somewhere if they scrapped their loyalty card scheme and only 17% of shoppers choose where to shop based on their participation in loyalty card schemes.

86% of shoppers use a loyalty card on a regular basis, but despite the wide-scale usage of loyalty schemes, half of shoppers do not think it is worthwhile collecting points. Just under a quarter of participants would prefer retailers to offer more promotional deals rather than points.
Over half of participants in loyalty card schemes (52%) prefer to convert points into a money-off discount at the till, reflecting the thrifty nature of shoppers in the current economic climate. 19% of respondents save up points to earn a treat and a significant 10% of loyalty card users collect points but rarely, if ever, redeem them.

Only three schemes achieve significant usage levels. Tesco Clubcard (66%), Nectar Card (55%) and Boots Advantage Card (48%) lead the way amongst the British public, indicating that many people participate in more than one scheme.

Commenting on the results, James McCoy, Research Director for YouGov SixthSense says "Loyalty schemes need to do more to create customer loyalty. The schemes are best suited to retailers that are used frequently or where loyalty cards can be used in multiple stores, so that points and rewards accumulate at a fast enough rate to keep people interested. Participation is highest amongst the better off, indicating that because they spend more, they accumulate points faster and get more rewards, making participation worthwhile. Retailers need to do more to ensure loyalty schemes engage with all types of customer"

Notes to editors
All figures, unless otherwise stated, are from YouGov Plc. The survey was carried out online. Total sample size was 1,469 British adults (including 1,322 participants in loyalty card schemes). Fieldwork was undertaken between 18th and 20th February 2010.
The full report on loyalty card usage in the UK is available to buy now from YouGov SixthSense. This report is part of a series of 60 reports on the food, drink and grocery retail sectors. Other reports include chilled and frozen foods, snacking and alcoholic and non-alcoholic

Punch Bond Holders Debt for Equity Swap

In a recent article in the MA, Unison boss called for bond holders in Punch to consider a debt for equity swap much as MGM studios have recently done. The suggestion was called 'naieve and ill informed by city analysts,

I think.....

I dont think the naievete lies soley with the Union boss on this one.

Anyone with significant exposure to a retail property company whose sites are at best 'secondary' high street; have zero branded operators as tenants; whose own tenant base is frankly low on retail marketing expertise; whose traditional core business is declining at a frightening rate; and again whose tenants lack expertise in the 'new business model' ( that's running restaurants or entertainment venue bars); I don't want to go but you get the idea......; those bond holders may well be no worse off with equity than debt, infact its probably largely academic in the long run.

Day in the life

normal day in the office;
emails, promotional material to write,
some queries about ongoing campaigns
several calls about day to day queries
some vat forms to complete
my diary planned until xmas
trains booked for a trip next week
managers notified about upcoming budget planning etc
optician vist, selected new glasses
booked contact lens appointment
got back to wifes house,
scratched head about a Nigella meatball recipe
chopped a few things into a pan
found what I thought were bread crumbs but may have been a scone mix
went round to pick my two girls plus two more spare children, four for tea
stopped off to get milk and ice cream
kids sat down to homework
returned to meat ball mixture, bit sloopy!
began to make up meatballs
slopped abit of orange cordial into tom sauce to help flavour
it doesnt
fielding homework q's, mostly under 11s so Im ok
gentle barking from me at so not so gentle sreaming, (Toby you know who Im talking about)
get meatballs into sauce and pasta on.
empty dishwasher
get washing out
grate cheese
slightly over cook pasta
meatballs abit soft, but taste ok
Kids lay table and clear away homework, done?
dish up and serve cold water
mostly gets eaten and not too many complaints
discussion about getting rid of poos in space
clear table,and do a quick clear round and refill dishwasher
ice cream is completely eaten by all.
Beds made for guests,
finish off clearing up re load washing machine
take ironing upstairs
fold towels
first child into jimmies, others in front of tv
first child to bed, others into jimmies
last three into bed
ulser concern, try salt water
Ok lights out night night. xx
All quiet
Couple more emails
finish off last bit of washing up
Bugger wish I had my glasses really need to take out lenses.
Just wish sometimes I was a born a woman.
They're unbelievable at multi tasking,
my wife right now is drinking prosseco
and chatting to a friends
and texting another, in shampers.
night night

English Pub Retailing – Why so few Brands?

Quick! Name a Pub Brand

Quick - name any high street retail brand. How about a convenience store brand? Hotel brand? Restaurant brand? Now name a Pub brand? Not quite so easy, but Wetherspoons comes to mind and then perhaps some of the Restaurant / Pub crossovers like Toby carvery or Brewers Fayre. The Old Brewers like Marstons and Wadworths are beer brands slapped on Pubs but they don’t communicate or promise anything much about the Pub itself.

Why is there such an apparent dirth of brands in the UK Pub sector? I think it reflects of how far behind the UK Pub sector lags behind the rest of the retailing World; and fundamentally I think it is reflective of how backward the major landlords have been in their thinking about how our sector needs to develop.

If for a moment we crudely split up the Pub owners into the - big PubCos; the big managed house operators; the smaller regional brewers and the pure independents and small chain owners; and then look at where the innovation has been. The Managed House operators have developed a successful plethora of brands but this has almost exclusively been around turning Pubs into full service restaurants.

The Regional’s – Like their Own Brands!

The regional brewers have largely stuck to individual Pubs around their tenants. I would argue with a few exceptions this sector is probably the most backward in its thinking and most cherishes the individuality of Pubs; but its more paternal approach also tends to more successfully nurture the traditional style Pub tenant landlord. My guess is there is both a cultural mistrust of ‘Outlet style brands’ and a lack of retailing knowledge in these businesses. This position is in odd contrast to their understanding and need to build brand image around their beers.

The independent sector is of course awash with innovative food driven Pub solutions and developments, however evidence of brand development is limited. One successful example might be Brunning & Pryce who got up to around 13 sites before being swallowed up by the Restaurant Group; although ‘Brunning and Pryce’ brand is still being developed apparently tentatively by Restaurant Group.

Missed Opportunity

The real missed opportunity both for the sector and ironically themselves is that the PubCos haven’t explored or developed any ‘franchise’ brand opportunities within their leased estates. Why was this? I guess when they arrived in the late 90’s it was relatively speaking a boom time and it was all about securing property assets as quickly as possible. To their credit the likes of Punch channelled a lot of development capital into the sector but in their rush to invest no one apparently stopped to think about the need for a branded Pub solution. (Even more sadly Punch in particular rolled out many repeated and often inappropriate interior solutions but failed to come up with the Operating model/ menu/ drinks to give their ‘Partners’ a full solution).

Operator Resistance

I guess we must also acknowledge that as a sector a vast majority of Pub Managers/ leases are drawn to the individual nature of the businesses and firmly believe their own ability to stamp their personality on their respective pubs; and that efforts by Punch, Enterprise et al to sell in these off the shelf concepts I’m thinking of would have been quickly rebuffed.

Addicted to Brands!

I think now might be the time for a fresh look! And in particular I would suggest that for Punch and Enterprise it might be the only viable route out of what is otherwise a downward spiral. For even as the economy begins to grow again ( whenever and however slowly that might be) I would suggest the independent Pub sector is least well placed to capitalise and will benefit the least from growth, which rather like the wider UK economy Punch and Enterprise badly need to straighten out their balance sheets. Because very quietly over the last few years the UK Public has become more and more addicted to and seduced by and most of all reassured by brands.

And Punch and Enterprise leased divisions have none.

Corner Shops

Corner shops long ago embraced a brand – largely as a buying group excercise but in themselves the names Londis, Spar etc all have a promise and its mostly delivered inside the shop. So successful has this been for the convenience store sector that the big boys like Tesco have reversed into it with Tesco Express.
Brands Don’t have to be like McDonalds.
A brand doesn’t have to mean all garish colour and golden arches (although that one does seem to work quite well). Brunning and Pryce very successfully combined consistent interior design, menu solution and product control to create a really strong but quite understated brand product. I’m only slightly saddened Restaurant Group seems reticent about rolling them out.

The Time is Now

Pub leases/ operators need help. And local government subsidies or lower rates won’t do it. They need product solutions to help them fight back against the growing and real threat from the branded restaurant and (Pub) restaurant multiples. The local Pub eatery now competes with Nandos, Frankie and Bennys and the local Indian. All of whom sell beer!

We need to stop focusing on the false spectres of cheap supermarket booze, the beer tie (its about the whole rent /profit split package not just that bit), smoking ban and any other whinge we read about every week in the trade press. The huge challenge of our sector is the size of building we are supporting when compared to a high street lock up unit. We need much bigger profits to grow and sustain and we need a real C change in approach, and frankly abit of re-working of corporate strategy gobble-de-gook at Punch won’t do it.