It had to come some time, and in the end there was little surprise.
Nonetheless, the announcement this week that Wetherspoon’s founder and chairman Tim Martin is to step down from his executive duties is a major turning point, both for his company and the pub industry.
Martin, probably the most successful and best known pub entrepreneur of all time, is taking a back-seat, handing over the chief executive’s job to current managing director John Hutson, to become the company’s two-day a week non-executive chairman.
The fact that Martin has been on a six month sabbatical away from the business should have prepared staff, investors and competitors for the possibility, at least, that he might make the move permanent – and so he has.
Martin’s and Wetherspoon’s legacy is well documented. The big question now is what next for the company and the new man in the hot seat – John Hutson?
Some, including this weekend’s Sunday Telegraph, have already sounded alarm bells recommending shareholders be wary of the change at the top and to sell, describing Hutson and his board as “relatively unproven”.
Hutson is anything but, having run the operational side of the business alongside Martin for many a year. The test will be if that relationship will stay intact under the new regime’s shift in responsibilities.
The most important point is that Wetherspoon is entering a vital new phase of its business development. Growth purely by rolling out new sites can no longer be sustained. The openings programme has already been significantly curtailed. New challenges face the business and ones that Tim Martin might prefer others to tackle.
Improving the returns from its existing estate will be but one, as despite the company’s reputation for driving hard bargains it no longer has the monopoly on the best supplier deals.
Undoubtedly, there will be speculation about the company’s long-term independence. As has been said before in this column, Wetherspoon is about the only business that might tempt Mitchells & Butlers’ boss Tim Clarke to get out his cheque book.
But it may be time for Wetherspoon’s to look at a strategy purchase itself. Its acquisition and subsequent development of the Lloyds No1 chain, taking on and beating Yates’s, has paid dividends and provided a younger, late-night stable mate to the more traditional Wetherspoon’s model.
Wetherspoon’s reliance on a low-price retail strategy is perhaps the biggest concern going forward. It may be time to acquire or develop a new business stream that is less price sensitive and more quality oriented, possibly with a food focus.
There are a number of options, including the Yates Group’s own Ha! Ha! chain, which is that company’s most profitable operation at present. The recent interview in the Morning Advertiser by Yates’ chief executive Mark Jones, where he heaped praise on Wetherspoon, was as strong a come-on as seen for many a month.
But don’t expect any fireworks just yet, Hutson, as is his style, will be keeping his head down away from the publicity glare for a month or two at least. Then we may learn more about the next phase for Wetherspoon’s – and life after Martin.
• Another intriguing question is over who will succeed Bill Shannon as boss of Whitbread’s restaurant division. The choice will be important in determining whether Whitbread wants to influence the current moves to consolidate the UK restaurant sector.
Internal candidates will be headed by John Derkach, currently running Pizza Hut. But will Whitbread be bold and look outside – even among the bank of talent that once worked for it? That’s the interesting question.
