Subjects: The march of good pubs, UK foodservice upping its game, cumulative impact zones and staying ahead on health issues
Authors: Paul Charity, Ann Elliott, Jeremy Philips and David McHattie
Good pubs and how they are created by Paul Charity
How many “good” pubs are there in the UK? The simple answer is: more than last year and a heck of a lot more than five years ago. The newly-published Good Pub Guide 2014 claims there are 4,800 or so excellent establishments and 4,000 pubs at the other end of the spectrum that are likely to close because they do not pass muster. In between these two extremes, it estimates there are 40,000 or so “average pubs” which range from “straightforward locals to the big chains of standard-pattern eateries and drinkeries with their reliably consistent offerings: you always get what you expect, no less – but no more.”
The Good Pub Guide’s editors were on the receiving end of a good deal of opprobrium when they suggested yesterday that the evolutionary culling of sub-standard pubs was a positive thing, strengthening the remainder of the industry. There is a fairly overt strain of snobbery inherent in the Good Pub Guide’s dismissal of the thousands of mainstream managed pubs with their huge volumes of food and drink, offering high quality food and drink at affordable prices. They may not be where Good Pub Guide editors choose to hold their lunches, but UK consumers flock to them for the very reasons that produce curled lips among the chattering classes. But broadly, it is hard to argue that every underinvested, poorly positioned terraced pub with a low level of amenity could and should be saved. Part of the pressure on the bottom-end pub stock in the UK is coming from the ever-improving top end of the sector where skills are rippling out across more and more sites. Skilled chefs tutored in London’s finest kitchens, former executives of large managed operators, talented entrepreneurs equipped with the nous to create a new generation of pub, restaurateurs retro-fitting pubs with sophisticated food offers, talented localists who understand their provincial markets intimately and brewers who care about their retail standards as much as their mash tuns are among the many diverse groups transforming the top-end pub landscape.
This phalanx of talent is moving quickly. Our database at Propel Info has no fewer than 520 multi-site pub operators running sites across the UK. The actual number, we suspect, is at least twice that number – it is just that many are still at such an embryonic position they rarely seek national “trade” publicity. The contrast with yesterday’s landscape can be seen at the Association of Licensed Multiple Retailers, which had a far more limited membership a decade ago – pure food specialists within the pub arena, for example, were more of a rarity.
The advance of skills across the pub sector is being helped by the tenanted pub companies, which still, let us remember, own 40% of the stock. We at Propel were delighted to see the huge response to Punch Taverns’ open invitation, issued through us, to outstanding operators to meet their top brass next week to discuss mutual business opportunities. The current Punch approach to co-investment with the UK’s best multi-siters is a model for how progress can be speeded up. Likewise, barely a day seems to pass without former Spirit’s leased division forming a new partnership with an outstanding multi-site operator. Over at Enterprise, which has some of the UK’s finest pub stock in its portfolio, it is equally good to see flexible and imaginative leases being signed with the likes of InnBrighton and the West Country restaurant operator Mezze. Despite the current noise about the tenanted model, it is instructive that Nick Pring and Malcom Heap, whose Realpubs success was built on the foundations of several Enterprise leases, have returned to their roots, with an Enterprise lease chosen for their second London Ordinaries pub. No surprise, too, that Propel was able to report this week how quickly London Ordinaries has transformed that pub’s performance.
One of the best current examples of how a pub experience can be transformed by talented individuals is the four-strong company Yummy Pubs, led by Tim Foster and Anthony Pender. All four pubs are reporting triple digit growth, and the company’s Somers Town pub in Kings Cross, where the pair are receiving extraordinary support from landlord Charles Wells, is a particular trading phenomenon. It is interesting to note, also, how dismissive a talent like Foster is of the current proposals to bring in statutory regulation of the sector. He was an attendee of the recent Tenanted Pub Company Summit and knows full well that success is in the hands of his team. Foster wrote in his blog: “The big issue at the moment – self-regulation or let the planks from Whitehall get involved. We’re big enough and ugly enough to sort ourselves out. Christ, the majority of MPs can’t even do their bloody expenses right and they think they can come and fix one of the most complex industries in the world with a magic fairy wand? It was the first time I have heard Dr Vince Cable talk in public – he was awful. It was the first time I have heard Ted Tuppen talk in public – he was fantastic. I was asked to sit on a panel and tell the room what I thought of my relationships with my landlords. It’s pretty simple: we have a fantastic relationship with one, frustrating as hell with another and non-existent with the last. We’re very self sufficient, we actually don’t need anyone’s help – what we need is for them to not get in the way of our progress. But if they have great people that can help us as Charles Wells do, we’ll take every single bit of it.”
No kind of government intervention is going to produce more ‘good’ pubs. That’s down to the industry and its fostering of people like Foster.
Paul Charity is managing director of Propel Info
Foodservice has upped its game by Ann Elliott
This has been a busy few weeks for going round and looking at dining concepts – it’s a hard life but someone has to do it and all that…
Recently visited places include The Grain Store in Kings Cross, Barnsley House in the Cotswolds, The Swan at Salford, Bill’s, Cote, The Parcel Yard, The Happenstance, Jamie’s, Wagamama, Plum and Spilt Milk, The Old Parsonage in Oxford, PizzaExpress, Café Rouge, Shake Shack and Social Eating House.
I didn’t really have a bad meal at any of them and highlights (and some lowlights) included:
• An outstanding lunch at Barnsley House including baked beets with carrots, orange and pine nuts followed by Heirloom tomato tart with courgette fritters and then glazed rice pudding with Barnsley House raspberries. All served by a team who just seemed so delighted to be serving wonderful food. A real joy and a great find.
• A joyous member of staff at Bill’s who couldn’t contain his enthusiasm about the expansion plans for the company even allowing it to spill over into comments suggesting that the same team that now owned Bill’s had originally owned Carluccio’s, but had sold it recently. I must have missed that.
• An awesome breakfast at Cote. I didn’t want a sausage but the chef filled my plate with superb tomatoes and more mushrooms so I had great plate-fill. Effortless service and a simple but effective table settings change between breakfast and lunch led by great members of staff – a treat to watch.
• Interestingly, some indifferent service in a number of places. Really imperceptible, but irritating – like always having to catch the waiter’s eye for something. Nothing to really complain about as such but distinctly off putting. I think Net Promoter Score is too blunt a measuring tool to pick this sort of thing up but it’s the really tiny things that definitely deterred my guests from visiting again.
• Leaving my phone in the Happenstance and the team there kept it for me – very kind. Being told off, however, for stealing chips from the servery at 9.30pm with four other customers in the dining part – I know I shouldn’t have done that but couldn’t resist. Didn’t need to be quite so rude about it though (them not me) – not very kind.
• Outstanding experience at the Social Eating House. Everything works. The team are wonderful and welcoming but not too effusive. The atmosphere is really lovely and the food is breath-taking both in terms of presentation and taste.
• Being really stunned in Jamie’s in Covent Garden: The waitress knew the menu backwards and helped me order something that wasn’t specifically on there; food arrived so quickly it was unbelievable. More team members than you could shake a stick at; a kitchen that was just amazing to watch in operation; table turns the like of which I have never seen. A front of house team working in perfect harmony. I always felt that Jamie’s was perhaps all fur coat and no knickers but this was wonderful – proved totally wrong.
• One waiter at one chain restaurant with such bad body odour we couldn’t smell the food.
• Loving everything about The Grain Store – in fact all so good I bought the book. Not quite as stunning as Dabbous but just great, really great. The food looks and tastes beautiful and it’s in a brilliant setting.
• The Old Parsonage in Oxford is worth it for a very special treat (like your 25th wedding anniversary and you realise this meal is actually your present). Roaring log fire and 32 degrees centigrade outside – different!
A real mix of chain, gastro and fine dining pubs and restaurants – some outstanding experiences, some great ones but no really bad ones. Dining out has changed beyond all expectations just in the last five years.
Cumulative Impact Zones: failure to prepare is preparing to fail by Jeremy Philips
For over 500 years magistrates granted alcohol licenses at their complete discretion. Then in 2005 a new regime came into force, where the presumption was that applications would be approved, save where objectors could demonstrate potential problems based on either a threat to the general public’s or children’s safety, crime and disorder, or public nuisance.
This has changed. In many parts of the UK the burden of responsibility now lies with operators to prove that their premises will not have an adverse effect on the local community. This is because guidance issued by the Secretary of State under Section 182 of the 2003 Licensing Act explained that councils could use their powers to adopt policies to reduce alcohol-related disorder in established leisure zones in their towns. The response, while slow to catch-on, has been the steady spread of ‘Cumulative Impact Zones’ (CIZ); areas that councils have identified as problematic due to the number of licensed premises they contain. In these areas there is a rebuttable presumption that any new application for a premises licence, or variation of one that could increase alcohol sales, will be refused.
This is a radical change to our licensing laws, and although not set out in the legislation itself this ‘guidance’, published originally by the Culture Secretary and more recently the Home Secretary, is having a marked impact on many businesses and property owners across the country. There is also very little one can do to prevent the designation of an area as a CIZ, unless one challenges the very evidence supporting the initial proposal, which will be beyond most licensees. Apart from judicial review (and I should say that the establishment of a CIZ has yet to be challenged in the High Court), businesses are left with a generally informal local process to object to a proposed CIZ. In reality, such consultations invariably result in the designation being adopted by the council, which will often have the support of residents and local police, the latter suitably armed with crime statistics.
What this means for new businesses
For freeholders and their tenants looking to obtain a new or later license for their premises within a CIZ the challenge isn’t insurmountable, but it is certainly extremely difficult. Their task will be to persuade the council to grant a licence in spite of its own policy. This means providing evidence to prove that despite the new licence, later hours or larger premises, the venue will not add to the areas’ proven problems. Now of course this is difficult as the correlation between more and/or larger bars and increased intoxication is an obvious one. However there are worthwhile strategies to follow that can help your case. These include, for example, placing an emphasis away from vertical drinking towards food and entertainment, if that is consistent with the style of business. Similarly, if you can show that your premises will present an entirely new kind of operation to the area, with for example ‘upmarket frontage’, door staff to improve safety and security, and lighting around the premises the odds can improve greatly, depending upon the reasons that the CIZ was adopted. Just as important is to be able to produce good references and a portfolio of other premises where there have been little to no complaints from residents or the police.
A good example of this was a new bar in Leeds that was granted a licence recently, despite its being in a CIZ, due to its portrayal as a specialist bar designed for beer connoisseurs. Another worthwhile approach in appropriate cases is the ‘broken window’ argument, where it can be suggested that a new venue would actually benefit an area more than a traditionally crime-attracting vacant space. I recently advised a client in a south coast resort to adopt just this argument. This, coupled with plans to decorate the venue to the highest standards and a pledge to set an example when it came to control of the door, led to the ultimate success of the heavily contested application.
What happens if you are an existing tenant within a CIZ?
Once you have been granted your licence then happily there is no longer any need to ‘renew’ your licence. Instead one simply pays the annual fee. Nevertheless, if you operate within an area given a CIZ designation then the risk of any licence within that area facing review proceedings will inevitably be higher. As public disorder issues have already been identified, if your premises come to be seen as part of that problem, it can be a case of ‘step out of line and it will be very tough to get your business back’! In my experience, this is a particular worry for the freeholders of leisure properties within CIZ’s who could, through no fault on their part, face a dramatic drop in the value of their properties in the event that their tenant loses the licence.
My advice to freeholders is to make sure from the outset that you are fully aware of the situation and the risks that come with owning a licensed property within a CIZ. Practical steps to consider include tweaking the lease covenants to put in place additional duties to notify the landlord of any problems – for example if the tenant receives any letter of complaint from the local authority or other regulatory body, and taking out a loss of licence insurance policy. Another step is to pay the modest fee of (presently) £21 per annum to register an interest with the council, entitling you to receive notice in most cases if the property is threatened with enforcement action. It has also now been recognised by the High Court that in certain circumstances it can be legitimate for two licences to be held for the same property. In a high profile case in July of this year the High Court ruled in favour of a nightclub premises in Guildford that had taken out a shadow licence as a form of protection against loss.
Finally, for tenants facing a threat to their licence, it is crucial to respond quickly at the first sign of trouble and to identify an expert to offer guidance and help steer your case. All too often we see cases where licensing barristers have been brought in far too late on applications, or reviews that were rushed through by the business owners and which have led to the wrong outcome, perhaps unnecessarily, as a result. By thinking strategically and getting advice at the outset this can be avoided as in my experience these stress areas aren’t necessarily a lost cause; you can get – or keep – licences so long as you’ve focused on the real issues from the outset.
Staying ahead on health issues by David McHattie
Quite aside from rising food costs, chef skill shortages, the supermarket VAT disparity and ever shifting consumer trends there is something else looming large which will shape the future of food offers across our pubs, bars, and casual dining businesses in the future. The health of the nation and the desire from certain quarters to constrain and control consumer choice is high on the agenda.
While smoking rates have declined from 39% in 1980 to 20% in 2010, Kings Fund analysis of peoples’ attitudes to their health suggest that only 40% of the population are highly motivated to adopt healthy lifestyles with the remaining 60% having a more negative or fatalistic attitude. Indeed new data from Long Live Britain suggests that in the next ten years we can expect 5.8 million adults to develop Type 2 diabetes and 3.5 million adults to develop cardiovascular disease.
In addition, the organisation reports that at least eight million adults drink over their recommended weekly alcohol intake and 4.3 million adults have harmful levels of drinking. A further 16 million adults in the UK are obese and 33 million are categorised as having a larger waist than they should, with nine million adults rarely or never exercising. Government statistics show that 22% of the population has an obesity problem, a problem with significant consequences for the health service and society.
It is clear that we are less physically active than previous generations with surveys suggesting that six out of ten men and seven out of ten women do not do enough exercise. Add to that XBox generation children who no longer walk to school and their parents, who do sedentary jobs and have little time to shop, prepare and cook healthy foods and it’s clear we have a national issue which should be addressed.
One piece of analysis has calculated that the cost to the NHS of treating the consequential health-related problems is in excess of £1m a week. In these budgetary constrained times there are many that believe everyone must lend a hand including the “out of home” market.
We are considered a significant part of the solution to the problems outlined above, problems so significant that the freedom of consumers to choose and the rights of operators to flex their menus according to market needs is deemed secondary. We are a victim of our own success, success hard-earned despite the tide of growing taxation, legislation and bureaucracy. The success is best illustrated by the growing volumes of guests we entertain:
• 19 million UK adults visit an eating out establishment at least once a week
• UK licensed hospitality serves 20 million meals a week
• There’s been a year-on-year increase of turnover in food-led sites of 7.6% and the number of food led pubs has increased steadily over the past few years
Any thoughts that changes to food legislation is simply a casual dining problem are well wide of the mark – it’s also a pub sector issue. It is little surprise that those more inclined to legislate to achieve health of the nation targets see our sector as a serious contributor to the goals.
This is not something we can denounce as puritanical madness – the health of the nation is important and we can certainly contribute. It is better we contribute earlier and help government find practical solutions which operators can adopt without denying consumers the experience many seek, creating a balanced series of solutions which are practical and do not drive customers away from the golden goose of retail hospitality, which generates huge value added to communities, the exchequer and UK PLC.
A reluctance to contribute will inevitably lead to legislation. It would be foolish to think otherwise and one glance at some of the suggestions and desires expressed to date will certainly cause operators concern: mandatory menu labelling showing fat, sugar, salt and calories – even for daily changing menus; salt banned from the table; a BOGOF or “All you can Eat” ban; supersize controls; food waste regulation; mandated maximum levels of salt, sugar and fat in dishes with naming and shaming of companies whose dishes exceed approved levels; salads without dressing; children’s menus – offered by 62% of pubs with “items that particularly appeal to children” – pasta, burgers and ice cream – will come under direct scrutiny, as will soft drink options.
Having endured a decade of challenges, we are finally seeing the green shoots of growth in many areas. But we are at a critical point where we can ill-afford any decline of consumer spending caused by legislative excess. As a sector we have often been the “low hanging fruit”, either when government need to raise tax revenues or wish to impose behavioural changes on society at large. A number of the larger operators in the sector have already signed up to the “Responsibility Deal”, but they cannot be left to bear the brunt alone. This is a matter for everyone in the sector who serves food and we must accept the challenge to work with government so that we might help them understand what is practical and that progress can be made step-by-step; after all, with 20 million meals a week being served, small changes can have significant impact.
We must be proactive to ensure those who would grab what they perceive as “low hanging fruit”, using legislation, do not create a raft of unintended consequences that will strangle the recovery of a sector that is a critical engine of growth and jobs.
David McHattie is chief executive of the Association of Licensed Multiple Retailers. This article is from the Autumn edition of Propel Quarterly
