Marston’s, the brewer and pub operator, is “cautious” about opening new-build pubs on retail parks that lack other leisure facilities, chief executive Ralph Findlay told M&C Report’s Pub Retail Summit.
The company has opened c60 new-builds since it started a renewed focus on them in 2009. Findlay explained that the company has been targeting “busy arterial routes” in areas with a mix of offices and homes, and near sites such as leisure developments and supermarkets.
“We’ve become much more choosy on retail park developments,” he said.
“We think retail parks are fine and good where you’ve got blue chip operators on them and where you’ve got some kind of complementary leisure. We’re cautious about retail parks which are absent of some of those things, given the growth of internet shopping and so on.”
Findlay pointed to research that showed pub food, a key element of the new-builds where 90% of sales are driven by food, was on the rise. The average pubs takes £98,000 per year on food in 2011, and the amount has been rising in recent years. In contrast. food sales in restaurants have remained fairly static at c£250,000 between 2001 and 2011.
He also said that while drink sales in pubs are expected to fall 3.1% between 2009 and 2015, pub food sales will increase 3.5% over that time, and these trends are “pretty much here to stay”.
Findlay explained that of the 60 sites built since 2010, 48 are “core” outlets with costs of c£2m and capacity for 180 covers. The remainder cost c£2.8m and have 250 covers.
In terms of tenure for the new sites, Findlay said: “Personally I still prefer a freehold. I don’t like sites where we give away a developer profit to somebody else. We want to keep it for ourselves. We also like complete flexibility for what we do inside.”
He was optimistic about trading prospects for the coming year, pointing to a 2.5% expected rise in average earnings this year, and the fact discretionary post-tax income is set to rise from 1.2% to 3%.
“If we look at the market now, it’s still really tough but there are signs it’s going in the right direction in lots of ways.”
