Heineken UK unveils £39m plan to upgrade pub estate

More than 600 pubs, accounting for almost a quarter of the firm’s 2,400 strong estate, are set to benefit from the investment​, with 94 of the makeovers costing on average £200,000 each.

In addition, work will also be undertaken to reopen 62 long-term closed pubs throughout 2024, taking the total number of sites reopened since the start of 2023 to 156.

As well as this, the move has been predicted to create 1,075 new jobs within communities.

Star managing director Lawson Mountstevens said: “Pubs have proved their enduring appeal; after all the disruption of recent years, Star is on track to have the lowest number of closed pubs since 2019.

“It’s a tribute to the drive and entrepreneurship of licensees and the importance of continued investment.

“We’ve spent more than £200m upgrading and maintaining our pubs over the past five years, and we’ll continue to invest to keep them open and thriving.

“Time and again we see the value consumers place on having a good local and how important it is to communities.”

One example of this is the Ashford Arms in Ashford-in-the-Water, Derbyshire.

A Covid casualty, the Grade II-listed inn closed in March 2020 but reopened four years later after to a joint £1.6m refurbishment by Star Pubs and Rob Hattersley of Derbyshire-based Longbow Venues.

The funds turned the pub into a be premium country pub with a new snug, two bars, a 107-cover restaurant, nine boutique en-suite letting rooms and a 30-seater alfresco area with a retractable roof.

In addition, the scheme created 50 new jobs, benefitting local suppliers whose produce the venue uses.

Meanwhile, the Ship Inn, Worsbrough, Barnsley, saw a £370,000 refurbishment and reopened in February 2024 following a four-and-a-half-year closure, creating 11 jobs.

Specialising in entertainment and sport, the wet-led pub boasts bar and lounge areas plus a games zone kitted out with pool, darts and screens showing Sky Sports.

Regeneration plan

Elsewhere, the Coach & Horses in Carlisle, Cumbria, which had been closed for a year, saw a £300,000 injection, transforming its poor reputation into one of a top-quality family and dog-friendly local serving freshly prepared food.

The pubco added the six-figure regeneration plans had been designed to accommodate changing consumer patterns, including working from home and utilising suburban and rural pubs in a bid to save on travel costs.

In addition, it said the “major refurbishments” would transform “tired pubs into premium locals” and broaden each venues use and appeal.

Subtle “zoning” will signpost pubgoers to the area likely to suit them best, enabling different groups of customers to simultaneously enjoy a variety of activities – from watching sports to dining – without disturbing each other.

Dividing screens and distinct changes to lighting, sound systems and furniture styles will help delineate the zones, it added, with the new designs set to impact “every part” of the pubs, from the toilets to the gardens.

Other common changes will include overhauling cellars with state-of-the-art dispense equipment to ensure consistently perfect pints and repositioning tills to speed up service.

Upgrades with Heineken’s ambition to be net zero​ by 2040 in mind will also be implemented, including energy efficiency measures such as heating controls, insulation and low-energy lighting, which would typically cost £12,500 per pub and cut energy use by 15%.

Star property director Chris Moore told The Morning Advertiser ​the upgrades would transform the sites and broaden the sites to appeal to a wider range of people.

He continued: “It's about creating great consumer environments [and value] by modernising the venue to create multiple income stream businesses, making them more appealing to a broader range of people.

“When you invest, it gives people more reasons to go to the pub. People want to see the pubs as part of their community and part of the fabric of their social network.”

Moore added operators “valued” the investment and had been engaged with the design proposals, but one of the biggest challenges is the time it can take to bring the projects to “fruition”.

“We spend a long time working with operators when we're building these proposals, they take time to come to fruition.
“These are not small undertakings from us and from the operator, but we are committed to the same shared vision we have for these pubs”, he said.

In addition, the property director implored it was essential the firm gets it right and tailors each offering for each individual community.

Structures and processes

He continued: “We have lots of structures and processes to ensure we read the local market and understand what the opportunity is.

“We can do the construction elements effectively and efficiently, but it's all about recruiting the right operator and working with them to deliver the end product; the investments don't work without the operator.”

Though this is not the first big investment from Star into its leased and tenanted estate.

Moore detailed the pubco had injected similar amounts in the past and would continue to do so to ensure “consistency”.

He said: “We have a shared interest in ensuring that businesses are viable and successful.

“We're there to help support them and give them give them knowledge, share experiences around how to build sales and use our buying power to maximise the benefits.

In addition, the firm supports its operators with energy schemes and cost-effective refuse and recycling collection plans as well as sharing consumer insights on fod and drink ranges and trends.

“Well invested well run pubs are the road to being successful in this market, you have to be consistent to maintain those levels.

“I feel immensely proud about what Star does and everything the teams do working with some brilliant licensees”, Moore added.

Though the property director said business rates were causing cost pressures across the industry, adding the sector was “very heavily taxed” compared to others.
He continued: “We are a very heavily taxed sector and pay more compared to other industries.

“Whether that be duty on alcoholic drinks or VAT and business rates, which are a big concern for us and we want to see reform.
“Pubs pay a massive role in local communities. We need to support pubs and ensure that we don't look back in 10 years and think we've missed lots of opportunities there as a society.”