The managed winner and leased losers

It’s another big week for the UK pub industry – for two reasons. Firstly, this Wednesday one of its most influential operators, JD Wetherspoon, is 30, and secondly, we will hear the latest instalment in the ongoing handbags in the leased pub sector. JDW at 30 It is easy to get carried away with company anniversaries – often an obligatory excuse for some good old PR puff – but JDW’s 30th seems like a sensible hook to reflect on a company that has undoubtedly helped shape modern pub retailing. There are many things that founder Tim Martin & Co have brought to the sector’s table but picking out just two fundamentals for a December Monday morning, (for me) it has to be that word retailing plus, put politely, the company’s trait of rapid adoption of best practise. A huge fan of Sam Walton, Tim Martin brought a different approach to operating pubs – at a time when “the trade” seemed scared to run itself like a proper retail business. He realised that to run successful managed houses you needed to be good at hospitality and retailing. Martin is a devote subscriber to the Kaizen philosophy of business – continuous improvement by 1,000 tiny steps. He also fully subscribes to the concept that retailing is 1% inspiration, 99% perspiration. Like all good retailers, he has been good at understanding footfall and identifying significant densities of people. In the early days his property strategy was largely to try to secure properties as close as possible to McDonald’s, because he knew they were the best at identifying such pitches. This pursuit of McDonald’s gives a clue to the second key quality – rapid adoption of best practice. Put simply, Martin has installed a “supreme magpie” culture at JDW – they beg, steal and borrow from others, and are often better at implementing the killer bits of innovation. They are among the best at promoting new ideas, be it their own or others, and impressively slick when it comes to making things happen quickly. Closely related to this is a “have a go” mentality. It is probably the reason why JDW sells more Kopparberg cider than Sweden and more coffee than Caffe Nero. It’s also important to remember that the company’s success has not come in a straight line. It has, as mentioned in this column a couple of weeks ago, proved itself the master of change. Within the peer group, it is without doubt one of the sector’s most admired companies and that just wasn’t the case five years back. Clearly there’s lots more to garner from JDW. More reflections and insight are available in the latest issue of the Morning Advertiser, which features an interview with Martin by MA editor Paul Charity, plus articles by chief executive John Hutson and yours truly (www.morningadvertiser.co.uk). The leased pub saga This week will also see Peter Luff reconvene a group of MPs to hear fresh evidence and to assess progress made by pub companies and trade bodies in improving certain elements of the tied-lease relationship. I know I am alone in thinking that the pub industry is doing a pretty good job of imploding, as far as this issue is concerned. The protracted process of trying to co-ordinate a measured and effective response to the BEC’s summer report, which called for change and an urgent referral to the competition commission, has been and continues to be fatally flawed. On the one hand some pub companies (you know who you are) were very late to recognise the need for change, adopting a “we are right, we have always been right and we will continue to be right” mentality, although thankfully this now appears to be changing, but not before time. On the other hand, and what remains a huge problem, there are still people at the heart of the debate representing lessees, who have participated in the mediation process, and who do not have any desire to compromise. It must be hoped that Peter Luff and his ministerial colleagues this week elect to pursue a watching brief, revisiting the issue in 12 months. In the interim, all stakeholders must help to identify a mutually tolerable road map that will avert legislation or further interference. As this will largely be about compromise, those not willing to constructively participate in such a process must be identified as extremists and cast aside. That could be a problem for some elements of Independent Pub Confederation. It is time for the leased pub industry to stop looking like it has no idea how to help itself. Identifying the best On a very different tack, it is time to vote for the best companies, concepts and individuals the eating-out and drinking-out markets have to offer. Visit www.rroty.co.uk to view the newly-released shortlists for this year’s Retailers’ Retailer of the Year Awards. This awards programme is unique, and hugely significant, because it is the only one of its kind. The winners are chosen by a meaningful cross-section of the industry’s senior management tier. There are nine awards: Best Emerging Concept Best Concept Best Company The Evolution Award Best Venue Deal of the Year Investor of the Year Rising Star Best Individual – the Retailers’ Retailer Please have your say at www.rroty.co.uk