Writing exclusively for The Publican, Wizard Inns boss Chris Hutt reflects on past changes and takes a look at the future fortunes of the pub trade.
Tim Martin says his secret is to make 100 minor improvements, then another 100 and so on. Try it, he says, and you'll be surprised what a difference it makes. I think he's right, and that is what licensed retailers need to do, even if we are not all yet in Wetherspoon's league.
At the same time, major demographic, social and political trends are changing the landscape in which we work. When I joined licensed retailing over 25 years ago, millions worked in heavy industry. Miners, steelworkers and shipbuilders sank huge quantities of beer at the end of each shift. In a generation these industries have all but disappeared, and so has the thirst they generated.
The brewing industry was vertically integrated. Major brewers exercised a stranglehold. Pubs were judged by their beer barrelage, by the contribution they made to keeping the brewery at full capacity. Facilities in pubs were Spartan. Licensing justices in major cities, in thrall of the brewers, refused all new licence applications, and were not even required to give their reasons for doing so. Then, in 1989, came the Beer Orders, our equivalent of the Big Bang, and in the subsequent 10 years the industry changed more than it had in the previous 50.
Food has come from nowhere to account for a quarter of the industry's total sales. Country pubs have metamorphosed from alehouses into informal restaurants. Soft drink sales have soared as youngsters take drink-driving legislation more seriously than their parents did. Wine and lager sales have leapt, while those of spirits and ales have slumped.
Looking ahead, what will be the seismic changes in the next generation? It seems to me that the customers are moving on, ahead of us much of the time. Their concern is shifting away from product and price, towards a need for more service. You still have to get the tangible factors, the basics, right but it's no longer enough. Customers want service, atmosphere, hospitality. Above all they want to have fun.
Four years ago at Wizard Inns we began to provide table service at some of our pubs. Today we do it at most of them - 20 per cent of the sales we generate in these pubs come from table service staff circulating on the floor. I emphasise that we are doing this in heartland pubs, often in unfashionable, provincial, suburban and community locations.
The customers just love it. I predict that our table service sales will keep on rising. Where we get it right, a virtuous circle establishes itself. The customers are happy, they spend more and give tips, this makes the staff happy and they are less likely to leave every few weeks. This makes the manager's task easier and frees him or her to develop the business more proactively.
Finding good managers has never been easy. Pub management is a testing, demanding, unrelenting job. It's a vocation. In a world where success depends on getting the intangible factors right as well as the tangibles, it's more important than ever to have the right person in the right pub. There will be a war for scarce talent. At Wizard Inns we want to be seen as simply the best operator of unbranded managed houses, and also as the best company to work for. As well as competitive salaries, and entrepreneurial bonuses, we offer an environment where, with 65 pubs and bars, each one of them really counts. The directors know all the managers, visit them and meet them frequently, listen to their ideas and problems and try to act decisively where appropriate.
Above all, our managers have the right to manage and are expected to exercise it. Some of our best managers are refugees from branded operations and from mega chains where their freedom to operate according to the needs of the customers is often curtailed. They respond to our informal, entrepreneurial approach and we respect their professionalism.
Professional managers develop and retain teams of good staff. Training is key. At Wizard we have tried to take a professional approach to staff training but there is much more to do, so we increase the resources we devote to it whenever we can.
There are too many managed houses in the UK, although the number is gradually coming down. I predict that the numbers will fall from 14,000 to 9,000 over the next five years, at which point they may stabilise. Many smaller managed houses would be better run as leased or tenanted pubs. At Wizard over the last five years, while we have grown to 65 pubs and bars from a standing start, we have also grown our average annual sales per site to above £600,000 from below £400,000. Within the next 12 months, we expect to achieve £700,000. At this level it is possible to attract and keep the best managers, and to re-invest to keep the business growing and to keep abreast of statutory requirements.
Branded pubs have a problem. There are too many brands (400 at the last count) and too many pubs (5,700 of them) have been branded. This represents a lemming rush of stupendous proportions and it will end in the usual way that lemming rushes do. The customers on Friday night are not looking for a "brand" to drink in. What they do want is "a good pub or bar".
I predict that fewer than 10 branded chains will survive in the medium term, accounting for no more than 2,500 pubs. In the meantime, how much capital will have been wasted, how many pubs, licensees and customers will have been forced into ill-fitting straightjackets?
Because of my involvement in the early days of the Campaign for Real Ale (CAMRA), people ask me if I think real ale has a future. I certainly do. While volume trends are currently bleak, demand has rallied a number of times in the last 30 years and will do so again.
There will be differences. Real ale now needs to be niche, not mainstream. It needs to be marketed as a relevant product in a new century. It needs to command a wholesale and retail price premium, reflecting the added costs of small batch production and quality ingredients. Adnams, Fuller's and a few others are showing the way and Cask Marque is playing an increasingly valuable role.
People have talked about licensing reform throughout my time in this industry. There have been some significant changes. In the '70s the afternoon break was abolished in Scotland. Surprise, surprise, in the acid test, pubs in Glasgow became more civilised as their owners were encouraged to invest in them and new customers were attracted. In the '80s the afternoon break was abolished in England, but not on Sunday. In the '90s that changed too.
The truth is that progress towards a modern licensing system has been pitifully slow, one small step per decade.
There is a chance now to break through, and I do hope the government and the industry won't bungle it. It's not rocket science, so why are we finding it so difficult to progress?
My "back of a postcard" licensing bill is as follows. Firstly, pubs should be able to open to midnight, and if that's too much to ask, then at least give us late openings on Fridays and Saturdays. Secondly, there should be a system of dual licences - personal licences, transportable around the country, belonging to suitably trained and vetted licensees; and premise licences, granted automatically if planning, fire officer, environmental health officer and other statutory requirements are met.
Thirdly, any new system should reduce bureaucracy and have fair, transparent charges. Is that too much to ask?
My contention is that a bill with these provisions would meet 90 per cent of licensees' requirements and be popular with customers. It has to be better than waiting another generation for the perfect solution.
Licensed retailing can look to the future with confidence. Our customers pay us to eat, to drink