Spirit to sell 100 pubs

Spirit, the managed division of Punch Taverns, is looking to sell up to 100 pubs as it sets forth on a three-year programme to reach its potential.

Spirit, the 861-strong managed division of Punch Taverns, is looking to sell up to 100 pubs as it sets forth on a three-year programme to reach its full potential.

New division head Mike Tye said a review of the estate had shown that Spirit needed more concepts to maximise the current market opportunity.

He told City analysts that the company needed a new premium food offer and improved local and value offers.

New, improved menus had been introduced at Chef & Brewer, Two for One and City and Metro pubs.

The greatest opportunity for Spirit, though, was in its 300 local pubs, he said with some of the best turn-arounds already occurring in this segment of the estate.

Spirit had also embarked on accelerated "churn" of its manager and general manager staff, with a 25% change in personnel.

"Calibre has gone up a lot," he said. Labour productivity had increased by 5% while cost of goods had gone down by 5%.

Capital expenditure was reduced for now, focused on proven concepts or trial concepts. Staff had been trained to adopt SUMO — sell up, sell more, sell on — to drive margin per customer visit.

Aggressive marketing was also being used locally and nationally - the company had embarked on a national advertising campaign for Two for One.

Tye added: "It's not been done for a very long time."

He said that it was "very early' in the turn-around at Spirit but the key was to make the best of what was one of the best managed estates in the UK.

The gap had already begun to close in performance terms with managed company rivals but it would take three years to fulfill the estate's potential.

Tye told analysts, though, that he believed the programme could be carried out without a "big bulge" in capital expenditure.