PUB DOCTOR

Pubs or Houses for Sale?

2011-09-02T09:33:00.000-07:00

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

2011-08-02T09:31:00.001-07:00

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

2011-01-18T12:28:00.000-08:00

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

2011-01-01T12:57:00.000-08:00

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

2010-11-19T02:11:00.001-08:00

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

2010-11-09T13:31:00.001-08:00

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

2010-07-21T13:45:00.000-07:00

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.

Brief Comments on Punch to Nigel Parsons

2010-03-30T14:25:00.002-07:00

Comments to Nigel Parsons at Evosecurities

Hi, Read a segment of your article last night in the Morning Advertiser and I'm fascinated you'd still recommend Punch as a buy stock.

Surely the only route for Punch is a strategic with-drawl with least pain as possible for bond holders? The fundamentals are so poor. As a trading business selling beer: the current long term decline in Pub beer sales (when you exclude the High Street Bar sector where they aren't strong) will not alter, and conversely they are more vulnerable with a high number of urban community sites which are most at risk. As a landlord with on the whole low quality tenants, zero brands and mediocre buildings - its hard to see how they are well placed. Branded and managed operations are picking off customers from their operators everyday. The investment 'bet' that Punch embarked upon 10 years ago just hasn't paid off - there just wasn't the number of high quality operators who could sustain the high rents that the investment pay back required. The huge mistake in the whole project was to not create a franchise brand model that operators could follow. As a result in a declining sector there is no graceful exit. I take your point that they are successfully selling off to raise cash - but I am not convinced they are only selling 'tail end' sites. I think it is mistaken to blame the current economic cycle for Punch's position - there is a much wider change going on down in the Independent Pub sector and I believe one should be cautious about relying and tracking trends in the managed and branded sector as a guide.

Brief comments on Punch to Wayne Brown at

2010-03-30T14:22:00.000-07:00

To Wayne Brown at Altiumsecurities

Hi Wanted to agree with your analysis of Punch reported in MA yesterday.I was surprised that Nigel Parsons thought otherwise. The fundamentals in the business look so poor. As a landlord they have mixed quality tenants; a desparate lack of any brands; and the huge investment made in the first 5 - 8 years is already wearing off. This of course failed to deliver the long term sustainable rent increases that any other property developer would have expected ( I accept they came through for a while). The problem was the lack of quality operators and the right emphasis of the corporate structure to support those operators. The big failing was not to develop brands to franchise. As a trading business not only is this in decline but even where sites are viable beer sales are declining as a proportion of total drink sales. There might be some short term capital gains, but they will be short term and short lived.

Article below

2010-03-04T05:37:00.003-08:00

I particularly like this article ( below same date). The thinking, sentiment and conclusions are spot on.

Six Practices of Entrepreneurial Thought and Behavior For Thinking Like and Owner - By Jeffrey Elsworth, PhD, School of Hospitality Business, Michigan State Univ. :: Hotel News Resource

2010-03-04T05:36:00.000-08:00

Six Practices of Entrepreneurial Thought and Behavior For Thinking Like and Owner - By Jeffrey Elsworth, PhD, School of Hospitality Business, Michigan State Univ. :: Hotel News Resource

Repy to Merrill Lynch Report - Buy Punch & Enterprise

2010-02-03T11:24:00.000-08:00

Article on line in MA on Wednesday - Merrill Lynch both encouraging new investment in the UK Pub sector ( which I obviously support) and also recommending Punch & Enterprise as Buy stocks!

This was my contribution to an online debate:

There is absolutely no where for Punch and Enterprise to go with something like 25% of their remaining stock having no long term viability in the modern food or drink retailing world; those businesses are simply waiting to die as the tide has gone out on their local markets never to return. The only reason the death throes on these smaller local Pub businesses are going on so long is the still long queue of amateur operators who simply need somewhere to live; and whom Punch has now been reluctantly relying on to keep doors open (thats a virtual quote from a prior senior Ops Director at Punch).

Frankly this could go on for years but in the end someone is going to have to pay for the inevitable 30% fall ( my crude minimum estimate) in the number of trading sites in the sector. The inexplicable naievete of many parties involved - including Government, local Government, Great British Public, and to an extent the trade bodies - is all working to sustain the myth of this sector.

I would however say very confidently that for the remaining professional food service retailers, modern bar operators and some niche businesses the future should be pretty rosy and provide a good basis for growth and income.

Iraq Enquiry

2010-01-23T03:03:00.000-08:00

Just heard a great quote.

I feel the same about this Iraq enquiry as I do about a new Beatles release in some new format or enhancement - theres loads of excitement and press coverage but in the end when you paly the music the song remains the same.

2010-01-09T04:08:00.000-08:00

The Weather is devastating for business - but it could be worse!

Of the 9 businesses I currently look after only 3 are trading at anything like normal levels; the rest are open but with virtually no customers! ( I have to say also with no staff on duty also, just management holding the fort). I was planning to get my first e shots out this week but have held off as frankly I don't believe for a minute the offers are going to be anything like strong enough to tempt customers out in these conditions. I actually don't think giving it away with cash back would work at the moment. Therefore I 'm holding off and preparing messages for next weekend when I hope the market will be more responsive.

I feel it could be worse because frankly if we are going to have a slow couple of weeks they may as well be the worst two weeks of the year.

Frustratingly my marketing set up just isn't slick enough at the moment to be able to respond quickly on a day by day baisis. For instance where the roads to and from a Pub are clear and the Pub car park is clear it would be great to re-assure 500 customers that alls well and we'd love to see them.

In the meantime I am getting on with my marketing planning for the next three months and in particular I have been encouraging Valentines packages to be both bold on pricing and available for the entire weekend. Its been 6 or 7 years sicne the last time Valentines fell on a Sunday. Last time I can clearly remember the market faithfully turning up on the Sunday evening - this year I'm not so confident and fearful a great many will want to make use of their usual Saturday night out and save on the second dinner out! We'll see; but all menus are going to be available both nights.

2010-01-09T04:05:00.000-08:00

Couple of thoughts for new businesses starting up:

Book Keeping and Accounts. You'll have naturally got an Accountant and you'll probably even have set up a monthly book keeping system - either your self or a book-keeper. However beware of the time these processes take and the time lag between week to week business activity and of getting timely and accurate profit or loss information. Pubs operate with cash everyday and as a result they are cushioned for a while from the economic reality of their activities - the VAT accrues in your bank account and so it can be some months before it becomes really clear just how expensive or indeed profitable your day to day business is. Most commercially run Pub businesses acutally produce a weekly profit forecast - from the sales, payroll, food and drink purchasing information put together with a fixed weekly estimate of overhead costs. This isn't necessarily an accurate profit or loss picture - but it is quick; and definetly serves to warn or remind you just how much capital or reserves you'll be eating into every week a loss is incurred.

Marketing: Build it into everything you do from day one. It doesn't have to be slick and corporate but you must have an awareness that you are not alone in the market place and no matter how good you think you are; today's fickle customers may not see it quite so clearly. Get email addresses, give out incentives to return, be energetic in disseminating your message and building your 1000 regulars every business needs to survive.

This Week - A Valuable Message.

2009-11-17T12:39:00.001-08:00

This week I am pulling together the material for the first e shot for nine individual Pub businesses. I've spent quite a bit of time on setting up the mechanics to make this work but now its time to think clearly about what's going to make a successful communication.

Over the last months I've got into the habit of signing up for anyone and everyones email lists and now get a good selection of messages of varying value. In the case of this particular project I have 9 quite different and independant businesses and the only reason they are all going to be broadcasting at the same time is for my convienience rather than their need. Clearly once a pattern has been established that will have to change!

Going back to the practicalities - I had spent alot of time thinking about and then working on the whole business of how we would go about an e marketing programme and internally I have had a long debate with the client over whether we should be outsourcing the work or handling it in house by setting up a marketing function we manage ourselves. Now that debate is over ( and I'll go into that debate and the costs at another time) I find myself more and more thinking about making the messages valuable and interesting to the recipients.

In particular I am concious of the hard work involved in collecting the database members; whether it be persauding an individual to sign up or that when they have persauded them we have incorrect or ilegible details we can't use; either way a useable database for an individual Pub site of +1000 names isn't built over night. My best site has built up 1500 + over 4 - 5 months but with a real zeal and determination not found in every busy Pub or Restaurant Manager. Therefore if we accept its hard work building the database what we don't want to do is turn half of the recipients off in the first newsletter. In trials for one site so far we get around a 35% opening rate; so its worth remembering if your database is only 100 then only about 35 people are even going to look at the message you sent.

I discussed the issue of value messages with Rob Ward ( LinkedIn) at the weekend and his reminder that everyone in 'town' is sending out discounted product messages like crazy and not to forget customers are just as interested in product developments and / or the personal angle was timely!!

Anyhow Ive set myself the goal of getting material for an e shot from 8 out of the 9 businesses this week and getting that info into shape to go to the next stage; as well as ensuring everyones databases are as up to date as they can be before we boradcast on or around 8th December for a Christmas messaage!

In addition I have to prepare for my new 'Marketing' help who starts work on December 1st. We have 11 web sites to build and a strategy to work up before Christmas!

And finally I was pleased to receive a call this week from a 'Brother of a Friend' whose buying a Pub site in Essesx and it looks like he'd like some guidance!

Watch this space.......

2009-10-15T03:53:00.000-07:00

Comments on Punchs' Roger Whitesides article in Morning Advertiser

This is not a visionary statement and as most comments reveal its easy to read that this is simply more of the same.
Essentially the Gentleman is saying we'll just do everything we've always done but we'll do it better - well frankly just in pure management science terms never mind the troubled Pub sector anyone with even a little experience of organisations would read this is naieve.
The only little ounce of truth which is now coming through thick and fast from all Pubcos is the acceptance there are going to be less Pubs - the question of course is how many less - 20% ? 30%.
What we need from Punch ( and Enterprise) as custodians of a huge chunk of the sector is a vision of the future of Pub retailing that takes into account the inherent weaknesses in the sector which are
its cheap to enter
anyone can have a go
Pubs don't easily fit into a modern retailng model
punters prefer brands
Where is the strategy to ensure traditional Pubs living off beer sales can become and remain economic into the next three decades?
Where is the strategy to help food Pubs fight back against increasingly dominant, and growing branded food alternatives
This isn't just about more effective BDMs and better busines trained tennants - this is about a model that will ensure Pubs have a real place in the future of leisure time in the Uk
One final word on the fantastic team at the heart of Punch - they may well be internally an awesome bunch but externally there is and has been for years an ugly and completely unfounded arogance that pervades everything the organisation appears to do. It resulted in huge amounts of capital wasted in the early days and today it doesnt mix at all well with the undoubted fear that lurks.

2009-10-01T08:36:00.000-07:00

Today I visited a corporate run Pub site just outside Kidderminster, partly to review the Pubs management but I also took the opportunity to look at the various customer marketing hooks they hade in place.

They had everything: Bring back discount voucher; sign up email newsletter; business card drop; feedback form; innumberable blackboard offers and managers specials.
Some were useful tips to copy but the over riding impression was of a marketing department running wild with ideas and formats; none of which seemed to tie in to the style of the operation; had any connection with with the operation; and vitally I didn't sense these initaitives had any connection with the people in the business, very much like a McDonalds solution without anyone bothering to check a branding link to whatever the brand or place was.

Practical tip - if you want customers to sign up to your email newsletter - leave a pen next to the cards!

2009-09-05T10:12:00.001-07:00

Saturday afternoon and Im setting up my first blog, when I should almost certainly be taking the dog for a walk! Watch this space.