Speaking at the second annual Star Pubs & Bars National Lessee Event, in Edinburgh, trading director Chris Jowsey said owner Heineken was committed to UK pubs. “That’s the end of our disposals, with the exception of a few individual sites. It’s now all about growth for us.”
Jowsey revealed that Star will make available a “significant increase in funds” for pub investments in 2015.
The company will have spent £18m this year on 70 transformational projects and more than 100 ‘sparkles’, which was an increase on the £8.5m spent the year before.
Jowsey said: “We have to compete for investment with the rest of Heineken worldwide, but Heineken loves pubs and the UK market and that investment figure is going up all the time.”
He added that the company’s payback ambitions for pub investment projects was 5 years, representing a 20% per annum return on investment. “But I’d suggest the pubs themselves get an even better return,” he said.
Company progress
Jowsey shared with around 50 Star lessees the progress the company had made on commitments made following its first National Lessee Event last year. “Your feedback suggested that the quality of support from business development managers (BDMs) was variable – so we’ve reviewed all our BDMs and raised our expectations. In the past year we have replaced 25% of our BDMs. Most of the new BDMs have retail experience in a variety of areas, and will add value to or lessees’ businesses.”
Each Star BDM now has around 20% fewer pubs to manage than they did two years ago – 43 on average, down from 55. “Ideally we’ll bring that down further to 35-to-40,” said Jowsey.
He added that the company now has 84% of its pubs on substantive deals (of three-years plus) against a target of 85%, “which gives us stability and gives BDMs more time to spend on supporting lessees rather than recruitment”.
Training
Jowsey also said that since Star launched its four-day Innside Knowledge induction and training programme for new lessees last year, it has not suffered a single new business failure, which compares favourably with any other sector, he added.
Some 88% of Star pubs now offer food as the business makes progress towards its target of 100% by 2020. And there has been a 20% increase in Star pubs offering table-service – this is now available at 60% of Star pubs. “We’re moving up the premiumisation scale with food and helping people get there,” said Jowsey. “Next year we’ll be bringing outside food consultancy experts into the business to work with individual operators.”
Star failed in its ambition to take one of its pubs into direct management to use as a training venue for staff. “Every time we identified one in the South East, which was our target area, we let it,” said Jowsey. “But we will do this next year with a pub in the North, near my house ideally!”