Oakman Inns is to “slowly migrate” its The Beech House concept away from the core business, as it looks to expand on the high street, MCA has learnt.

In the group’s trading update for the 26 weeks to 30 September, earlier this week, Oakman said that later this year it would begin to focus on the brand development and implementation of The Beech House concept.

Founder and chief executive, Peter Borg-Neal, told MCA that he believes the, currently four-strong, concept can do the same job in town centres and transport hubs that Oakman delivers in smaller towns and destination sites.

“In terms of offer it will slowly migrate away from the core Oakman business whilst retaining the values that are inherent in its metaphorical parent,” he explained. “Once it has reached a certain scale it might become appropriate to let it evolve into a separate business and perhaps into independent ownership.”

In the half-year update, Borg-Neal described The Beech House as “a high street offering capable of being developed in retail units, providing Oakman with a further level of flexibility regarding the type of sites that Oakman could acquire”.

When asked if there were concerns about expanding a high street concept, given the state of the market and the fact other operators are trying to diversify away from it, Borg-Neal said that his 41 years in this business has taught him one thing for sure – “that the high street is cyclical”.

“Piling in when times are good and paying silly rents is never a good idea – particularly if your plan is to rapidly roll out, in cookie cooker style, a concept that will not be able to evolve with changes in consumer taste,” he said. “However, accumulating quality sites at sensible cost levels and developing a flexible business model makes a lot of sense.”

Oakman achieved 8.5% like-for-like sales growth in the first half of 2018/19 – an increase on the 5.1% increase seen in Q1. Borg-Neal said he was very pleased this had not been achieved through going down either the discounting or delivery route, and told MCA that as a growth business its sites are, on average, more recently invested than those belonging to larger more mature businesses.

“However, I would point out that our core, ‘comparables’ estate consistently outperform the Peach Coffer tracker of total sector LFL growth,” he said.

“We believe this is driven by our focus on our S.P.E.E.D. principles – Sustainability, Passion for Pubbiness, Engaged Teams, Excellent Operations Design & Detail – which drive our operational execution.

“It is also significant that our key growth driver has been food with LFL growth at 11.7% over the 26 weeks ending 30 September – whilst others in the sector have struggled with food sales. We believe this is driven by our quality and the sensitive evolution of our offer over time.”

He said two examples of this are the development and inclusion of more than a dozen vegan dishes on its menu, and a repurposed children’s menu, which it hopes puts some of the healthier decision-choices back into the hands of the hosting adult.

“We have consistently grown our LFLs over the years and we are determined to keep doing so. That requires constant rethinking, huge numbers of small tweaks and a relentless commitment to constant improvement,” he added.