Mark McQuater: quick change artist

After 10 years at the head of Barracuda Group, Mark McQuater is not just embracing change for the sake of it — he believes it's crucial for survival in the current economic climate and beyond, as Phil Mellows discovers.

Mark McQuater is proudly showing me around the new-look Vineyard on Islington's trendy Upper Street. It's bright and modern with lots to catch the eye, draw the customer in and make them want to stick around. Eclectic is the word. Jazzy even.

There's something bothering me, though. "Wasn't this once a Wetherspoon's?" McQuater hasn't a clue. Perhaps I'm wrong. Perhaps I'm wrong to expect him to know just because he was managing director of JD Wetherspoon when he first came onto my radar in the mid-1990s.

"I wasn't there for long," he says. But it's almost like that might have been a different Mark McQuater: McQuater the pubco hopper, the serial troubleshooter (see 'Key dates', right. This McQuater has been head of Barracuda Group, the company he founded, for 10 years.

"That's a long time for you," I say.

"It's different when it's your own company," he says.

McQuater has found the entrepreneur inside. He's enthusiastic about his pubs and has a sharp understanding of his customers. He is also, perversely, inspired rather than daunted by the rather serious challenges pub operators are facing today. To say he embraces change would be an understatement. He gives change a big, sloppy kiss. He wants to have its babies.

"We started with a blank piece of paper — 35 pubs in the north-east. Now we've got 225 and we are changing them so they can perform even better. It's been great.

"We were lucky we had a boom economy for a number of years, and the task now is to find ways to adapt to new circumstances, that's the real test of a business. And we're still gaining market share and still gaining new product sales — coffee and breakfasts.

"And food — it's one of the biggest changes. Ten years ago I would never have thought food would be so important to us."

A refinancing last year has enabled Barracuda to make those changes — £7m worth of refurbishments that are developing half the estate over two years, 60 pubs in the past 12 months, 50 pubs in the next 12. McQuater explains that sales are in growth at the company, albeit only a slight growth in the current climate (in line with the Coffer Peach Tracker). But he's not likely to even consider any expansion plans until at least the middle of next year — the priority for the time being is this investment in the existing estate.

And this includes a new team of designers bringing a fresh approach and new ideas.

"We've changed how we look, how we sell, the operating plan," says McQuater. "The pace of change has always been fast in the pub industry. Now it's really fast.

"We're looking at different solutions, not the plain vanilla pub. We've got to make the offer broader, to sell more things that are different, and we've got to keep adapting.

"Pubs are not easy to get right. You have to work on building what you've got."

One change that's proving successful is zoning, dividing the trading space into a pub area, a food area and a party area.

"It's working really well. People want to be having the same experience as the people around them. It can be uncomfortable when you're trying to eat and the next table is dancing or watching the football."

Sound reasoning, but a little worrying to find that the "pub" has now become just one zone within an outlet. Are we in danger of losing it altogether?

"The fact is that alcohol has become more difficult to sell on its own. But our pubs are still a wet environment. The pub zone is always the hub, and it's busy."

New generation​

He has an eye on the new generation coming through, the internet generation. "They are style conscious, fussier, more informal. And if they have an issue on a night out they can communicate it quite easily. So we've got to get better. That's something we're working hard at.

"The question is, will the younger generation use pubs as extensively as we want them to when they can take home a £3 bottle of wine from the supermarket? People will remain social animals, but what proportion of their evening will be spent on the pub circuit?

"We're trying to get them in for the early session and encouraging them to enjoy all evening with us."

Sometimes the solution is simple. Like putting beans on toast on the menu for £1.99 at Barracuda's student-oriented brand, Varsity.

"We've a generation coming through that's a bit lazy," McQuater confides, astutely. "We make no margin on beans on toast, but it gets people in. You've got to get them to use you as much as possible."

It also reflects the fact that they've got less money, and the economic climate means that older generations, too, want more from their visit to the pub.

"They're eating more, and they're wanting a higher level of service."

That's led Barracuda to trial various types of table service in 25 of its pubs.

"So far it's been good for staff because they get the tips, good for customers because they don't have to work as hard, and good for the business because we can upsell more. And we're busier.

"It's not for every pub, but it's got potential in a large number. You've got to have that level of service where customers are paying £3.90 for a pint of Peroni and are asking themselves do I go to Pizza Express or do I go to Smith & Jones for a burger?

"You've got to close that service gap between pubs and restaurants."

Staff are, of course, a vital element in this strategy.

"We need staff who are good at keeping customers in the pub. We need emotionally intelligent people who understand the culture of our business. It's important they're compatible with us and we want them to stay, to commit to us. We do that quite well, I think. It's not just the money you pay, it's how they're treated."

Success​

Over the decade, Barracuda has been successful in retaining people and developing them into managers who can carry the company culture. That's become crucial during the current phase of investment. As McQuater points out: "When you're spending money on refurbs you need the right teams to run them."

"Managing a pub is more complicated than it was 10 years ago. And the pub business is softening — food, coffee and table service is making pubs more attractive to certain groups than a traditional pub environment that's smoking, wet and more male. That needs a stronger calibre of manager.

"Talent's hard to get, but we've been around long enough to find people from within. More graduates are taking jobs with us too, and graduates have an appetite for change."

It's the C word again, and McQuater is, of course, right. We can see it happening. As trade gets tough the tenanted side of the industry, with fewer resources and perhaps less willingness to adapt, is struggling, while managed groups like Barracuda are more flexible and squeezing out a modest growth.

For McQuater, though, this isn't just about the current economic predicament. Change has become a permanent feature for much of the industry. Certainly on the high street. It's a fashion business.

"The big thing is to use your resources to keep a business exciting and that's something we'll always have to do," he says.

"It's been a hell of a decade for the industry and 2011, 2012 will be very interesting. The industry will probably get smaller, but the pubs that are left are getting better.

"You've got to look after your estate, your pubs and your people. This isn't a time for greedy operators who take the money and don't re-invest. Customers don't want pubs to be badly run and shabby. They want to be excited.

"We're trying to be what that new pub industry should be."

My kind of pub​

"The Nag's Head by Angel tube is one of our old traditional London pubs. We've never spent more than £10,000 on it at a time and it's a fabulous piece of old London if you're in the mood for a bit of history.

"But I enjoy the new, too. We're fitti