Managed operator JD Wetherspoon is showing signs of greater operational flexibility as it tries to drive sales. It's even letting its managers try new things. The PMA Team reports
Around a decade ago, on the verge of a big expansion spurt, there was a debate at JD Wetherspoon as to whether all of its new pubs should be given the same name Wether-spoon's. Those at the company in favour of a single name pointed to the importance of brand recognition in winning customer confidence.
As we all know, the counter-argument won the day and JD Wetherspoon has become the UK's best-known pub chain despite the pubs bearing a rich variety of names. Chairman Tim Martin recognised the need to give each a name that reflected its locality. The walls of each Wetherspoon pub tend to serve as an ancillary space to the local museum for those looking to discover a little more about a town or city's history. In pursuit of this policy, half a dozen pubs initially christened with the Wetherspoon's moniker have had their names changed to something more in keeping with their environs in recent months.
Sidestepping the cloning risk
The same is happening at several Lloyds No 1 sites. There was an earlier sticky patch in the mid-1990s when newly-opened pubs I visited would tend to look like they were coming off a production line. JD Wetherspoon ran the risk of opening identikit licensed retail boxes, each one reminiscent of every other, with highly-similar design features and colour schemes in the style of many other high-street brands. The danger was averted when JD Wetherspoon encouraged its architects to be adventurous, and produce designs appropriate to each building. Even now Wetherspoon's harshest critics have to admit that there are a wealth of JD Wetherspoon pubs in sumptuous buildings that have been beautifully designed for the job of shifting plenty of food and booze.
JD Wetherspoon's success in achieving the industry's highest consumer recognition levels came despite the company's refusal to deliver its offer in the same colour wrapping every time. It makes you wonder why food service brands such as Pizza Hut, Burger King, McDonalds and even Pret A Manger could not have been more ambitious in design terms and created more variety in the countless retail parks and town centres.
Although JD Wetherspoon deserves credit for its willingness to be creative architecturally, in many ways it has come closest in the pub sector to adhering to the strict retail disciplines of the multi-national food brands just mentioned. Countless pub brands were invented in the 1990s that turned out to be little more than one-trick ponies. Customers grew tired of them because they weren't brands at all there was nothing unique about what they were offering.
JD Wetherspoon, by contrast, had points of difference and unique selling points galore and had the self-confidence to stick to its guns. Like an Exocet missile, it was singular and unswerving. (It can't be a coincidence that the most effective and durable restaurant and other retail brands tend to benefit from single-brand management focus). Like its founder, Tim Martin, it was focused and unclubbable (you never see a JD Wetherspoon senior manager at a major industry shindig). It had the lowest prices, the best range of beers, the most comprehensive food service and the highest quality air.
It's hard to imagine a new supermarket company doing so well at its first, and subsequent sites, that Tesco and Asda give up the retailing ghost. But that, effectively, is what happened to companies like Allied Domecq, Whitbread, Grand Met, Bass and Scottish & Newcastle. They all decided that it was impossible to continue as they were and still compete with JD Wetherspoon in a way that would keep shareholders happy. It was hard at times to work out why these big companies could not mimic aspects of the JD Wetherspoon formula to do better in retail terms.
Freed from a sprawling structure
Even now it's difficult to understand why more operators haven't realised that customers simply do not want to listen to piped music every time they go to the pub. JD Wetherspoon's success has undoubtedly become less conspicuous in the past couple of years. Mitchells & Butlers, in particular, has been freed from a sprawling multi-divisional structure to apply some management focus. M&B has been aping JD Wetherspoon's breadth of drinks range, food offers and price points, as have other managed operators such as Spirit.
Operationally, there seems to have been three major areas of response from Wetherspoon in the past year one that failed, one that is a traditional point of strength and one new, or at least revitalised, area. A notable failure for JD Wetherspoon was a last-ditch attempt last September to reduce prices to get volumes and sales moving. The past year has seen JD Wetherspoon gravitate back towards its major competitors on price points, although a sizeable gap still exists (see table).
Range, variety and quality upped
A second area of operational dynamism has been aimed at improving the range, variety and quality of the retail offer. On the beer front, for example, one venue I visited this week is offering 10 speciality bottled beers, ranging from Bavarian Erdinger to Australian Crown Lager. There's a major push on cider with five brands on offer: Westons Oakwood, Sheppy's Oakwood, Organic Vintage Cider, Old Rosie and Magners Original Irish Cider. Thatcher's Perry, a 7.4% abv product made from a single variety of pear, has been introduced. The Spring Beer Festival sold one million pints and featured 50 cask ales. There has been a major push to improve the coffee and the fresh orange juice. Non-smoking pubs have seen such exotic menu additions as venison casserole, smoked haddock Florentine and paella. Customers at Wetherspoon's London pubs have been treated to a traditional Greek dish this summer a meze platter.
The focus on surpassing customer expectations and surprising them with unusual products is a well-ploughed furrow for JD Wetherspoon. A slightly more unusual piece of operational dynamism seems to revolve around encouraging managers to try new things.
In the mid-'90s, a trade magazine published a letter from a manager who complained about working in what amounted to a cloned beer factory. To the casual observer, the Wetherspoon retail machine did, at times, seem designed to reduce the importance of the licensee in the retail equation. The offer was so powerful that Wetherspoon outlets did not rely to the usual degree on the personalities of their licensees or their retailing skills.
In the past year in particular, it seems that Wetherspoon managers have been encouraged to innovate a little, try a few ideas of their own, break out from the retail strait-jacket, and experiment. Tim Martin has always been keen to hear managers' ideas on how to improve the Wetherspoon offer. But here's a few examples of managers being allowed to do their own thing:
Managers initiating change
Kim Harris, of the Rising Sun in Redditch, Worcestershire, has begun importing a Polish lager, Zywiec, in bottled form and on draught from the Namyslow brewery in south-west Poland, for his sizeable Polish customer base. The lager has proved so popular that it's now available in bottled form across the estate.
Licensee Aled Griffiths, of the Tafarn Y Porth pub in Caernarfon, Gwynedd, worked hand in hand with his customers to get Anglesey Brewery to make a hoppy beer with a 4.2% abv content, to be named after the pub. He was also allowed to hold a Welsh beer festival.
Portuguese-born manager Nuno Gonclaves, keeps the Printworks in Clerkenwell, London, open until 2am twice a week, when final orders for food are as late as 1am. Nuno says: 'In Portugal, people go out later in the evening and the atmosphere is more relaxed. I have taken this approach on Thursday and Friday nights and the customers really enjoy it.
In Northern Ireland, manager Alistair Cawdwell operates an area of the Spinning Mill in Ballymena, as a non-smoking cocktail bar with table service.
A few years ago, JD Wether