Subjects: Long live the new-build, back in the real world, let’s keep it positive, and make it personal
Authors: Glynn Davis, Paul Chase, Elton Mouna and David Charlton
Long live the new-build by Glynn Davis
The Roman Ridge was my nearest pub when growing up so it resonated with me even though we had moved away by the time I was old enough to legally join the regulars. I did, however, pop in there occasionally in the following years with old friends who still lived nearby.
Even though I have happy memories of boozy evenings and pool-playing afternoons in the Ridge it could hardly be described as a classic pub and certainly had no architectural merit. It was a typical “estate pub” of the type that sprang up after the Second World War during a period of active housebuilding, when each new built-up area would have its own boozer. This was not dissimilar to the pub on the corner of every street approach taken by the industrious Victorians.
We’re not in the same gung-ho housebuilding environment today but with a serious shortage of residential properties, plenty of new-build activity is taking place around the country. This is something Marston’s has been focusing on with its pub strategy for some years.
The company has been opening about 20 new-builds a year within new towns and growing suburbs. These sizeable properties (costing about £3m apiece to build) have been generating healthy returns. Marston’s has a strong focus on food and families so the new-build approach gives it an opportunity to create sufficient parking spaces and sizeable kitchens. These pubs might not be everybody’s cup of tea but the City has found them rather palatable.
What has been surprising, therefore, is competition for new-build sites has been limited, with Marston’s chief executive Ralph Findlay saying recently the level of rivalry for the sites is “quite low”, even though these openings are the key driver of earnings growth for his business. That is not to say Marston’s is the only name in the new-build game because other pub operators have found an opportunity to create modern-day pubs from scratch (with all the amenities demanded by millennials and young families) appealing.
Fuller’s, for instance, built the Sail Loft in Greenwich by the Thames and used floor-to-ceiling windows on three sides (and across two floors) to give its customers impressive views of the river and Canary Wharf. It’s a world away from the traditional Victorian pubs that make up the bulk of Fuller’s portfolio but additions such as this are most welcome.
Such was the pub’s impact CAMRA awarded it the rarely-given “new-build of the year” award at its Pub Design Awards in 2017. The fact it was awarded at all suggests the new-build pub might be coming into its own as more operators recognise the advantages of starting with a blank sheet of paper.
Hall & Woodhouse enjoyed such freedom when it constructed a unit on the waterfront in Portishead, near Bristol. The company took the unusual route of connecting a group of former shipping containers and in doing so has created a unique building that highlights how we can view pubs through a more airy prism than dark wood and dim lighting.
This growing appetite for building from scratch isn’t confined to pubs because the hotel industry has experienced a 37% rise in the number of new-builds during the past year, according to the Knight Frank UK Hotel Development Opportunities 2018 report, with the budget end of the industry accounting for a hefty 69% of this new-build stock.
This is all positive stuff but what I hope we don’t find in years to come is these new venues were ultimately designed too rigidly for the specific tastes and demands of the day and didn’t recognise that incorporating flexibility into the model is vital for longevity.
This has been the problem with many of the estate pubs, which have found it tough to maintain their relevance to today’s customers, whose tastes have changed dramatically while competition for their money has grown beyond all recognition.
The sad result is many of them have been flattened by developers. It came as a shock when I returned to Yorkshire a couple of years ago and found the Roman Ridge obliterated, with six new-build houses in its place. The local populace clearly needed those houses more than it wanted the pub.
Glynn Davis is a leading commentator on retail trends
Back in the real world by Paul Chase
It has just been announced that the Welsh Assembly Bill to introduce minimum unit pricing (MUP) in Wales has been given Royal Assent. Predictably, the usual suspects – Alcohol Concern, Alcohol Focus Scotland and the Institute of Alcohol Studies – are all crowing and calling for its immediate introduction in England. So the Welsh Assembly government clearly isn’t interested in seeing how MUP works out in Scotland first – so much for “evidence-based policy”.
However, there never was any real-world evidence for MUP – its supporters rely entirely on the discredited speculative numerology of the Sheffield Alcohol Pricing Model (SAPM). This purports to show how a minimum unit price would cut consumption and the benefits in terms of reduced alcohol-related harms would cascade down in a sort of hierarchy.
But there were two things SAPM neglected to model and that economists have identified as unintended consequences of this kind of government price intervention. One is market displacement, the other product substitution. Let me explain. Market displacement is what happens when consumers wake up one morning and find a popular product has suddenly rocketed in price and they can no longer afford it. Consumers vote with their feet and seek a similar product on the black market.
This happened in Russia in 2010 when the government imposed a minimum price of 220 roubles for a half-litre bottle of vodka. Consumption was displaced on to the black market, where people bought cheap and dangerous moonshine. In response, the Russian government reduced the minimum price in 2012 to 185 roubles – about the same price it was before the government intervened. Consumer responses to government regulation neutered the minimum price policy. Will consumers do this in Scotland and Wales? It’s too early to tell but anecdotally we know Tesco’s car park in Carlisle is full of cars and vans with Scottish number plates! Some of these will no doubt rock-up on council estates in Glasgow and flog cheap English booze to price-conscious Scots.
But what of product substitution? Remember all those stories about cheap white cider being sold to vulnerable street drinkers and alcoholics with chaotic lives? MUP will solve all that by pricing these products out of reach of the poor. In Scotland, a three-litre bottle of Frosty Jack’s white cider made from apple concentrate and with an ABV of 7.5% was selling for £4.25 before MUP. OMG! Pocket money prices; alcohol cheaper than water – something must be done. Well now it has been. The same bottle now costs £11.25 – and sales have fallen off a cliff.
Problem solved? Not quite. If you’re the kind of drinker who necks a three-litre bottle of strong white cider in one session it’s safe to say you’re not a connoisseur – you do it to get blotto! These people haven’t gone away and signed the pledge, they still want/need to get blotto but their tipple of choice has been priced out of reach. What else can get you off your head for the night? A gram of synthetic cannabinoid Spice sells for £6. A bag of heroin off the streets of Glasgow can be bought for as little as £8. If you want to understand the effects of Spice on the homeless, visit Piccadilly Gardens in Manchester and see for yourself. Meanwhile, deaths from heroin and other opioids are at a record high.
So what happens next? Answers on a postcard please. I simply ask in what rational universe is it desirable for a bag of heroin to be almost 30% cheaper and a gram of spice 46% cheaper than a three-litre bottle of cider? Victory for public health! Vindication of MUP!
But these things weren’t in the Sheffield model so they can’t possibly happen. It has been peer-reviewed and the academics are quietly confident this will work. It seems to me this is what happens when government price regulation is thrown in the middle of a free market by people who don’t understand how markets work. This is what happens when activist academics living in ivory towers persuade dumb politicians that if they can control the price mechanism they’ll be able to socially engineer the sober society. Meanwhile, back in the real world I don’t think it’s that simple.
Paul Chase is director of CPL Training and a leading commentator on alcohol and health policy
Let’s keep it positive by Elton Mouna
The top brass at the Campaign for Real Ale (CAMRA) are a well-intentioned bunch and certainly know how to write a press release that hits the headlines. I refer to a recent press release detailing four out of five people in the UK have experienced a local pub closure in the past five years.
In the notoriously “no-news” month of August, a story like that will without doubt pique the interest of news organisations and fill an hour of any half-decent radio phone-in. The trouble is the headline writers and phone-in presenters tend to put an even more negative spin on what is already a negative story, reframing it to “the end of the pub is nigh” or “shock horror as one pub closes every nanosecond”.
I know CAMRA is only trying to do its best for us and its aim is to highlight high beer duty, high business rates and VAT inequality. That’s all commendable but a press release like that can unfortunately have a double-whammy when the “law of unintended consequences” comes into play.
Let me give you an example. I ran an event earlier this week designed to give something back to an area Remarkable Pubs trades in. In tandem with a local charity that supports young people, I spent the day with four Hackney teenagers highlighting – via a hands-on workshop with other industry colleagues – what a brilliant, opportunity-filled industry the pub and hospitality sector is and how it can make an excellent career choice. The event coincided with the CAMRA press release and subsequent, mainly negative press coverage about pub closures. This resulted in one of the young people asking me in a coffee break if the industry we were discussing held a secure future as he had heard a lot of negative messages recently. It was a terrific question from a bright chap, which I guess illustrates what I am trying to get at. Let’s inspire young people with good, strong, positive messages about our industry and, while we’re at it, let’s also send strong, positive messages to tourists visiting our wonderful country that pubs are alive and definitely worth a visit.
In summary, with a pint of Siren Brewery Broken Dream Breakfast Stout in hand (to prove I read all its press releases) I raise a glass and thank CAMRA for all it does to highlight the issues our industry faces. Perhaps, though, a more positive spin would still get the message across, inspire more people to make a career in our industry, and reinforce in people’s minds that pubs are simply a brilliant, thriving institution.
Elton Mouna is managing director of Remarkable Pubs
Make it personal by David Charlton
I was flicking through the morning news round-up when I came across an interesting BBC article entitled “Are online bookings killing restaurants?” This is an interesting question and one I’m obsessed with in my role as commercial director of marketing technologies.
For me this is the eternal debate of how evolutions in technology can keep pace with human behaviour. At the heart of it is how we make the most of new technology without losing the essence of what a drink or meal out is. It’s an experience that makes us feel good, an emotional experience and an emotional connection with a brand. That’s why we need to focus on showing the cult of personality and helping operators to make that personal connection with their customers.
According to the BBC report, no-shows account for 5% to 20% of total restaurant bookings across the country and can cost venues thousands of pounds a month. The blame was firmly set at the door of third-party online booking sites, which offer lots of deals and let people make multiple reservations at the same time.
The article quotes well-known operators that are understandably frustrated by the amount of no-shows and the impact this has on their bottom line. Let’s face it, people not turning up on busy trading periods, especially during the summer holidays, is unforgiveable. In real terms, it’s like being invited to a party, not turning up and not even having the good grace to apologise. You wouldn’t do it to your friends, so why would you do it to a restaurant? The answer is because you don’t feel an emotional connection with the restaurant if you book through a generic website and therefore don’t feel guilty about cancelling at the last minute or not turning up. You don’t think about the implications for the business, staff or other customers who may have enjoyed a night out at your empty table.
The BBC article quotes renowned restaurant critic Jay Rayner, who thinks online bookings have de-personalised the relationship between restaurants and their customers. He said: “If you talk to an individual when you book, some form of connection has been made and it’s much harder to screw a restaurant around. If it’s all online, people think less about the consequences, which is reprehensible.”
This is why restaurants need to take a different approach and start to cultivate the art of personality. In our experience, online booking systems don’t have to be impersonal – in fact they should be the opposite! Creating a personal and brand-authentic experience is at the heart of what we do at Zonal, giving people the tools to engage with their customers and build a relationship that lasts.
Our online booking solutions can be customised to match your brand personality – from the language you use to the look and feel and the offers you tempt people with. It also seamlessly links with EPOS so you can mine a huge amount of information about your customers and their habits – from their likes and dislikes to how likely they are not to turn up.
On the theme of no shows, there are a lot of tactics restaurants can use to minimise them. Using reminder SMS messaging in your brand voice to remind people of their bookings at set times before they arrive will jog their memory. There’s also something to be said for making it easier for people to cancel their booking. Let’s face it – it can be daunting to ring a restaurant and cancel so give people an easy-to-use SMS, social or web facility to cancel or reschedule their booking. At least you’ll know they’re not going to turn up and can promote the empty table.
The system could also offer different functionality based on guest history and their loyalty status so in theory you could stop regular offenders from making bookings or flag up you might want to ask them for a deposit before you accept the booking.
Part of that emotional connection is also about building brand loyalty and making your offers authentic so if you know a regular customer always orders a vegetarian meal, don’t send them your steak night offer! In fact if you use it properly, EPOS can give you so much information about your customers it can be really powerful. It shows how often they visit, when they visit, how much they spend and, more importantly, tells you what they order regularly so when you seat them at their table you can offer them their favourite drink. Imagine how powerful it is when you ask a customer if they would like their usual glass of shiraz when they arrive? How valued does that make them feel? It would certainly make you think twice about not turning up.
It’s about making the intelligence in your EPOS work behind the scenes for you so you engage with customers in your brand language and build an ongoing dialogue. Keeping it personal pays, and making an emotional connection with your customers will help to limit no shows. It won’t stop them but it will certainly make people think twice before letting you down.
David Charlton is commercial director, marketing technologies at Zonal, the leading technology provider to the hospitality sector