Marston’s CEO Ralph Findlay: ‘We’ll pull out all the stops’

Ralph Findlay would have preferred more notice to get his pub estate open, having leant his voice to industry calls for three weeks. In the event it was more like 10 days.

Despite that, the pub company is ready to go with an impressive 85-90% of its estate, the remainder largely Scottish and Welsh pubs unable to reopen yet under devolved law.

“It’s tight, but we’re getting there,” the Marston’s CEO tells MCA.

“We always said we needed three weeks notice, and we’ve had less than that, but we will get there. We’ll pull out all the stops. I’m okay with it.”

Having been concerned with potentially restrictive conditions, he was happy the guidance was advisory rather than fixed and mandatory.

That’s not to say there won’t be challenges with some of the elements, such as collecting customer data for 21 days to support contact tracing.

This is more straightforward in its managed estate, where most of the data will come from digital footprints, such as online tables bookings or Wi-Fi log-ins.

But in tenanted and leased, it will be more reliant on paper and pen, which presents the greater likelihood of “somewhat variable” results.

“I need to be absolutely clear on this, we’re going to be trying to follow the guidance as closely as we can, because I think it’s important,” Findlay says. “I also think it’s a sensible approach for the government to try and have a bit of flexibility in that,” he says.

With pubs given the space and freedom to do what they do best, Findlay sees a greater challenge in the uncertainty over customer behaviour.

To mitigate this, the government must offer something “big and bold” to kickstart the economy, such as a VAT cut for hospitality.

“I think the government is absolutely going to have to do something imaginative to kick start the economy and inject some life into consumer confidence.”

One rather unsavoury insight into current consumer behaviour was the hoards of people descending on beaches, drunk, disorderly and inconsiderate, leaving piles of litter in their wake.

While this phenomenon, which was repeated across the south coast, is part of a complex combination of factors, Findlay says the pub sector will provide a much more edifying example, a managed environment for people to eat, drink, relax and socialise. 

“Most of our pubs are in neighbourhoods or suburban areas where the people live nearby, and generally there’s a relationship between the people at work and the guests,” he says. “I think that’s a very different situation to the beaches.

“What we’re really encouraging, and I have a sort of mantra on this, is to be responsible, be sensible, be sensitive to how other people will look at how we behave. I think we can create an atmosphere that looks very different to the sort of pictures that we saw at the beaches.”

Marston’s is well placed to capitalise on whatever further sunshine the UK has this summer, 90% benefiting from a beer garden, and most of the estate away from city centres, which Findlay suggests will be much more challenging.

Ultimately, reopening will be a learning experience, but one he is confident will bed in quickly. An overly clinical environment will be avoided as much as possible. 

“I think it’s going to be bumpy at first because there are new protocols and guidelines to follow. We are going to be asking guests to bear with us to some extent, because we’re new to this as much as they are.

“I’ve watched the media fascination with what the new normal pub looks like, with perspex screens and god knows what, and I don’t think it’s going to look like that at all.

“I think we can have a pub environment that feels like a pub, that looks like a pub. It’s certainly going to be a bit different in some respects, but it’s not going to look like a hospital.”

As per the guidance, Marston’s will not be requiring staff to wear PPE, though they are free to if they desire.

Away from pubs, it is just a month since Marston’s announced a joint venture with Carlsberg to create a new beer company.

The Carlsberg Marston’s Brewing Company (CMBC), which Marston’s will have a 40% stake in, sees the company bank £273m.

This alongside Marston’s debt reduction programme gives the company a much improved balance sheet, particularly when facing a £40m loss of sales due to lockdown.

Getting such a deal over the line during a global pandemic was not without its difficulties.

“I think it would be fair to say that it presented certain unique challenges,” Findlay says, with wry understatement.

“I’ve been involved in quite a lot of deals over the years and concluding one during lockdown is right up there in terms of experiences.”

The new company will naturally champion Marston’s core ales, and Carlsberg’s more lager-oriented offering.

Findlay, who is non-executive chairman, said NPD will also be a very important aspect, with no alcohol and craft beer to be “absolutely vital” for the venture.

Carlsberg, which will operate with a 60% stake, bring increased distribution and scale to the venture, and the combined business will make up around 15% of the UK beer market.

The Danish brewer also has a global position, which will provide export opportunities for the Marston’s beer brands.

The strength of Marston’s beer business has been well supported by lockdown sales, with the off-trade up 55%.

“It’s been important for cash flow generation, but it’s also been great for the brands,” Findlay adds. ”We’ve outperformed the market, I think it’s been a brilliant performance.”