“Over to port, over to starboard”, is probably what you
hear from the tannoy on the captain’s bridge as the pub sector cruise ship
lists from side to side pulled this way and that by the pub governing associations grappling for
supremacy to protect their best interests.
Visualise a
bickering parliament’s question time, like a scene from Titanic with passengers
cast overboard flapping around in the water clinging to fragments of broken
business models.
Back on shore young, energetic, proactive, adept business
people had the foresight to wait for the bricks and mortar wreckage to be sold
off allowing them to become prosperous pub owners with outlets for all the
community to enjoy.
So what caused the pub sector ship to break up so
quickly? Simply bad foresight and business strategy. When market conditions and
customers' lifestyles change you can push as many barrels of beer up a hill as
you like but they will end up back at your feet. The recession just speeded up
the closure process.
The pub company tactic was to play monopoly and buy more
and more pub property imitating estate agents and wholesalers, which eventually
resulted in no custom for under invested traditional properties.
Pub companies forgot what the supermarkets are now
learning, it’s all about customers. Managing and operating a pub outlet is a
totally different scenario to what it was twenty years ago when social demand
for beer was at its peak.
What the landlords needed was a stringent pre-opening
business training programme with a steering and support relationship period
through the first precarious twelve months of trading.
Empty pubs created a panic with pub companies adopting
time share salesman tactics to get the next untrained incumbent in place as quickly
as possible. Departing, dejected landlords were seen rummaging in their pockets
to see if they had enough money for a taxi into the abyss and left scarred by
uncompetitive, unsustainable rents and bloated wholesale pricing levels.
As baby boomers fade away and generation x and y take
their place there is no regard for 400 years of brewing history. Instead there
is an on the go, fickle, “give me what I want, when I want it or I’ll go
elsewhere” attitude reinforced and conditioned by 'easy' internet activity.
Moving forward chief executives need to swallow their
pride and down a tumbler of humility. Getting to the sharp end of the ship they
should look at what their customers really want. The reorganisation of over inflated middle management systems and
creation of call centres for “property and compliance” issues .Also well
trained Business Development Managers are required to coach and mentor already overworked
landlords will generate turnover and profit growth to mutual benefit.
The pub sector will eventually learn and prosper but it
may take a new independent steering group to turn the ship well and truly
around and point it in the right direction. Once the failures trickle to a halt
the pub sector will be leaner and more adept with a cohesive long term strategy
of how it will grow its diminishing share of the leisure pound. Once the lesson
is learned maybe the next excursion out to sea won’t be such a bumpy ride.
Lester Pyatt
The Pub Specialist
www.thepubspecialist.co.uk
www.thepubspecialist.co.uk
Omark Hospitality Solutions
Supplier of the governments Growth Accelerator Programme
07931 238211
