Revolution for Morland Breweries?

Morland says it may buy more retail brands to meet the demands of the modern pub customer. We report.

Being based in the quiet Oxfordshire town of Abingdon has contributed to Morland Brewery's reputation of being a sleepy regional brewer.

But these days, the company is riding high on the back of a revolution led by brands and retailing which has transformed the company's outlook and practice.

The company currently owns former Unicorn Inns chain Newt & Cucumber, Wig & Pen, European bottled beer outlets called Ice-O-Bar, and, more recently, the Exchange Bar & Diner chain.

Retail director Peter Furness-Smith said: "We must have a range of concepts so that we can adapt to meet what is a very changeable and unpredictable set of consumer trends."

He has just ordered a revamp to create "Newt & Cucumber Mark II" — a modernised version of the chain to cater for a wide range of tastes.

The only site to benefit from this so far is Reading. The pub there now incorporates the best aspects of Wig & Pen and Ice-O-Bar to allow staff to treat breakfast customers with as much priority as late evening revellers.

Furness-Smith is already thinking about a "Newt & Cucumber Mark III" as the chain evolves to meet demand. Newt & Cucumber has emerged as the flagship chain within Morland. There are no plans to expand Wig & Pen, though there might be one more Ice-O-Bar.

By contrast, Morland plans another nine Newt & Cucumbers.

"We will not be altering all our sites to Mark II. In some sites, this would be inappropriate," said Furness-Smith.

Pub restaurant chain Artist's Fare will see eight new additions as the chain continues to be popular.

Furness-Smith's strategy is one of combined growth of all the retail areas — including Morland Taverns community pubs. "We want to grow all parts of the business at the same time — we don't want anybody left behind," said Furness-Smith.

Exchange Diners were bought from Allied Domecq, which found the chain too small to merit serious investment and long-term thinking.

About 60 per cent of Exchange turnover is food and the comparatively large sites —3,000-3,300 sq ft — add to Morland's overall retail margins.

Average turnover is roughly £11,000 per week per site. Three dedicated managers will look after eight of the 24 sites each.

The menu will be improved and prices brought down to more affordable levels. And pints of beer will be promoted rather than discouraged.

Furness-Smith said: "They were not very keen on pints under Allied Domecq. And pricing was totally out of synch with the market."

He denied that Exchanges would become pub restaurants. "Artist's Fares are pub restaurants. Exchange is a full restaurant service with a distinctive point of difference as an American diner."

Exchange also takes Morland to new areas of the country, including the North East. "But we decided to expand beyond our Oxfordshire heartland some years ago now," said Furness-Smith.

"When we bought Unicorn and Chapmans this took us to the South Coast and into Birmingham and Ipswich."

The new pubs and restaurants will not simply become outlets for Old Speckled Hen, the company's flagship real ale brand.

"We are consumer driven, though obviously we want to sell as much as possible," added Furness-Smith.

He has a team of site-finders but Morland will not pay too much for high street properties and locations.

"Some people are committing suicide. In two years time, we will see a certain amount of shakeout and the first ones out will be those who paid top prices.

"There will be tears in this area," he said. "We have a lower-risk strategy but it is right."

The key to success is "people", he adds. "It is important to have good levels of recognition, training and bonuses related to targets which are achievable.

Furness-Smith added that the industry was spending too much time worrying about the minimum wage.

Labour plans to introduce a scheme after consultation with business.

"The minimum wage will have an impact, but it won't be that great. And it will affect everyone, so no-one will emerge with a competitive advantage.

"What is far more damaging is the Social Chapter and increased employment protection."

He fears part-time and new members of staff will be given the right to sue for wrongful dismissal.

Currently, only workers with two years' experience enjoy this right. A recent case involving a pregnant employee cost Morland £5,000.

Morland plans to venture into family pubs with the launch of Wizard's Castle in Rottingdean, East Sussex, an ex-Chapmans pub. Wizard's Castle will become a part of the Artist's Fare.

Furness-Smith says Morland now has electronic point of sale tills in half its pubs.

He said: "In some pubs in the high street these days, without it, you're dead."

Pricing is a key aspect of day-to-day high street strategy. Some Morland sites have been adversely affected by nearby JD Wetherspoon pubs.

In Slough, Berkshire, weekly take went down by £2,000 after the pub chain arrived next-door-but-one.

Another idea Morland is keen to exploit is snacks. "The sandwich and snack trade is booming and we think our pubs can make the most of this," Furness-Smith adds.

Ideas such as this need to keep coming thick and fast if Morland is to stay at the forefront not only of high street pub retailing but of community trading as well.