Greene King accelerates Local Hero pub agreements

Greene King MD Simon Longbottom told the Publican’s Morning Advertiser that the company is sticking to a relatively simple formula for its Local Hero lease agreement, based on a 25% rent discount plus a 6% turnover royalty fee. Local Hero pubs receive a free-of-tie option on 50% of the pubs’ cask ales and a £100 per barrel discount on Greene King cask ale brands.

“Local Hero was created to innovate around the beer tie. We looked at our pubs to let and realised that some people were being put off by the rigid choice of beer,” said Longbottom, during a visit to the Stag & Hounds pub near Slough, where beer sales have increased from two to 10 barrels a week since it was converted to a Local Hero pub in October last year. “It also offers licensees a fairer balance of risk and reward.”

Longbottom admitted that Greene King “went too rural” with the Local Hero offer at first, with lovely country pubs that looked great, but lacked the necessary footfall for the model to succeed. Now the criteria for a Local Hero pub has been refined to be based on a combination of factors including the size, potential customer base and “charm” of the pub.

Greene King refuses to put a target on the potential number of its pubs that could be let as Local Heroes, but the company’s website currently lists nine pubs available under the agreement, including one – Ye Olde Bell & Steelyard in Suffolk as “under offer”.

Longbottom revealed that the Local Hero agreement has “brought to us a pool of people who weren’t naturally looking for a Greene King pub”, and exposed the business to new learnings from those incoming licensees and the local brewers that now supply the pubs.

The Local Hero agreement was originally trialled in 2011 at the Waggon & Horses pub in Braintree, where takings reportedly tripled from £2,500 to £7,500 per week.