Roger Whiteside: Riding to the rescue with Punch Taverns

The former boss of Thresher, the off-licence chain, Whiteside joined Punch a shade over 100 days ago, replacing the departing Deborah Kemp.

Arriving at a time when both the company in particular and the sector in general are up against the most challenging financial, economic and political circumstances in a generation, it would be fair to say that Whiteside's plate is pretty full.

However, he seems unfazed by the scale of the task. Instead, like the Ducati 1098 motorcycle upon which he tours Europe in his spare time, he seems very much fired up - evangelical almost - about the challenge.

Whiteside is keen that the group's message - that it is trying to be as supportive as possible towards all its customers (that's its lessees to you and me) - is heard loud and clear.

It is a message that some claim is loaded with caveats, most notably the beer tie and rising rents - witness the recent demonstration outside the pubco's offices in Burton-On-Trent.

Noting this picketing of the company's offices by the Fair Pint crew, Whiteside points out that the pubco's eight regional operations directors - or RODs, as they are known at Punch - met with a number of the protesters in the company's boardroom to discuss their grievances.

Factors such as any RPI-related rent reduction (see story p13) and the pegging of the group's wholesale price increases are designed to provide further help to those who fear for their future, he says. On the subject of the tie, Whiteside says the group can "reduce the wet rent component of a lessee's agreement… reducing the margin we make on the beer is a way of sharing the risk [associated with a declining beer market]".

A very good place​

Punch also provides what Whiteside calls "a very good place" to buy non-tied products including wines and spirits, through the pubco's interest in drinks distributor Matthew Clark.

But won't buying less beer from Punch, as some lessees claim they are doing, and moving more towards non-tied products hurt the pubco in the wallet?

Whiteside is nonplussed. "If we can show that we can provide great service, great products and great prices [through Matthew Clark] then hopefully people will buy from us. The way you lose money fastest is to let pubs fail and we want to avoid that," says Whiteside.

And as food becomes a more important part of the pub offer? Will Punch look to gobble up a piece of that pie too? "No," is Whiteside's unequivocal response.

Whiteside is equally adamant that the other whipping boy of the disgruntled licensee, the business relationship manager (BRM), is seen to be onside with the people running the group's pubs.

"I want the BRMs to be an extension of Punch Taverns policy in terms of the help and assistance we can provide, getting across what we're trying to do.

"It can't happen in all cases, I know, but I want to get a level playing field on approach and thinking," he says.

So while Whiteside has a long-term agenda designed to satisfy both the expectations of shareholders and the people running his pubs, he is currently very much addressing the shorter term challenges.

"I'm trying to understand the way things work currently and make early decisions to alleviate some of the short term pressures," he adds, acknowledging - in a somewhat understated fashion - that there is "corporate stuff going on" with the pubco.

"But my focus is working on the operational side of things," he says.

Turning pubs around​

His primary task, it appears, is to turn around the fortunes of the 1,000 or so pubs of the group's 7,700 leased pubs which are in decline. That or sell them, to either their existing lessees - from whom independent observers note there is "reasonable interest" - or to third party businesses for alternative use, such as McDonald's or KFC.

The days of selling pubs "in large lumps", as he puts it, are over. Buyers which could hoover up such packages, like Admiral Taverns, have long since put away their cheque books.

Not every pub inside the turnaround operation is close to the edge of the commercial precipice, he says, and there are those outside it that could perhaps be moved within at some stage.

"It's not a fixed number. Some will be repositioned in time. It's flexible. But I won't pretend that there won't be sales from the 1,000 pubs," he adds.

Whiteside says it makes sense to corral the group's troubled pubs into a division dedicated to their recovery - or sale. With a management team in place to oversee the business he is moving forward on two fronts.

"We're focusing the right people to work on the division's pubs," he explains. "That way their performance should hopefully benefit. And while there will be BRMs working with these pubs the balance can be released to focus on the better-placed sites.

"We want to do what we can to target support during what we hope will be a short-lived downturn," he goes on. "I've found that there is no such thing as a lowest common denominator in a leased business, instead each has to be assessed on an individual basis as regards the level of support it requires."

This assessment process, which forms the core to the turnaround division's progress, will involve co-operation from the lessee in a number of areas if they want help, Whiteside says.

"A financial assessment of the business is important. At the moment we don't have readily to hand some of the pubs' accounts. If people want help, they will need to be open with us," he points out.

This is often a sticking point for lessees, who see their pub as their business and believe that their landlord should keep its nose out.

Whiteside understands this, but says that if assistance is to be provided there will need to be transparency. He adds: "But if we need to provide extra financial help we will. Where circumstances dictate we will offer forms of financial concessions."

The biking pubco executive is very enthusiastic about the lease model, as one might expect of a man in his position.

"We're not just a landlord. What landlord of a retail outlet on the High Street would dip into his pocket to the tune of £1.6m a month in lessee support? The lease model allows people to get into the business for a low entry cost.

"One just has to be realistic as regards levels of expectations and capabilities," Whiteside says.

"At the end of the day, if you think the leasehold model is flawed, go and buy a freehold pub. However, you won't get the support we give our lessees. Yes, there are tensions, but we're all seeking a win/win out of this."

Whiteside says that despite the sector's current problems he "wholeheartedly" believes in the future of the British pub.

"I agree there will be fewer in the future. Yes, those that close will be the poorer performing ones," he predicts.

"But the better performing pubs, those who address the needs of their customers with good service and good products, will come out of the current environment stronger and fitter. And hopefully we will own as many of these as possible!"