Charity: Time to wake up to diversity

Marston's boss Ralph Findlay had a fairly stark warning last Friday for tenanted licensees — life is becoming increasingly challenging, and it's time to diversify.

The vast majority of the pubs that have closed in the first year of the smoking ban do not belong to the big five tenanted companies. The free trade and high street are seeing the big casualty rates.

But there's no point in ignoring the realities. Many of the big five's 21,000 tenanted pubs will be suffering.

Findlay went as far as dismissing Enterprise Inns' claim that 73% of tenants are trading in line with, or ahead of, last year. "I don't really see how tenants could be making more money this year than last year," he said.

Findlay went much, much further than you normally hear from pubco bosses. He acknowledged that the increasing price gap between the on-trade and off-trade has become the issue that exercises licensees most — and rightly so.

"Tenanted pubs have to understand they can't survive just by selling drinks. There's got to be something added on," he said.

Targeted support​

Like other tenanted pubcos, Marston's is offering targeted support — in South Wales, for example, it's providing a 50p-a-pint subsidy on one key product to help 26 of its pubs fend off the competition.

The company also provided a little more information than usual on the two obvious route of diversification for its own licensees.

Some 80% of its licensees now serve food, with 30% of sites food-led. In addition, 12% of its pubs have letting rooms — a total of 1,300 of them estate-wide — with 56% of these categorised as "premium".

The diversification message is a vital one. Licensees need to regard their pubs as retail shells — and think long and hard about generating maximum revenue. It's a message that large numbers of licensees have absorbed and actioned already.

But one message you receive from the best licensees over and over again is that the job of learning from other pub retailers' successes never ends.

Next week sees the return of the Morning Advertiser's money section, where we profile some of the very many licensees who have found innovative ways of attracting new customers.

There's plenty of life left in the pub trade, as we all know. It's just that the pace of change is increasing.

Inflation​

One managed operator says he's receiving daily letters from suppliers warning that they need to increase prices.

Marston's says suppliers on existing contracts are reporting problems fulfilling terms because of inflation in ingredients.

With food and other types of inflation so evident, you wonder how the Government inflation figure sits at just 3%.