Ei Group chief executive Simon Townsend has vowed that the operator agreement is “categorically not going to replace the tied model”.
Speaking as part of a panel of senior leaders at MCA’s Tenanted Pub Company Summit yesterday, Townsend said that while the operator agreement had helped to propel Craft Union to more than 250 sites over the past four years, it would never suit all pubs or publicans.
Punch chief executive Clive Chesser agreed, adding that the tie would continue to evolve as the sales mix within pubs changes, such as the drive towards low and no-alcohol beer.
Lawson Mountstevens, managing director of Star Pubs & Bars said that the group’s Just Add Talent portfolio, which is a form of operator agreement, would grow to 150 pubs but was not appropriate for the bulk of its estate.
Meanwhile, Admiral Taverns chief executive Kevin Georgel said there was evidence that some publicans were switching from the operator agreement back into a traditional tenancy or lease.
Admiral does not currently offer an operator agreement or retail offer but Georgel stressed: “That’s not because I’m negative about it – I think it has a place and it is an enabler of investment into pubs. But, fundamentally I think the essence of the leased and tenanted model is about ownership of the operator. I think that’s a nuance of those pubs, which is extremely valuable from a customer perspective.
Mountstevens added: “I see it as part of our suite of agreements. It opens up opportunities for certain pubs and particularly those that require significant capital contribution. It takes a lot of risk out and allows us to recruit from a different pool.”
Townsend said: “I would go as far as to say it is categorically not going to replace the tied model. They are fundamentally different. Craft Union is a very clearly defined retail offer which has its own specific investment structure, pricing and marketing activity. The operator model is ideally suited to that type of offer. However, a stastic I am very proud of is that 49% of the operators in our Craft Union business are the former lesees or tenants of those businesses. It suits them to be able to drive the front end of those businesses, while we drive the back end. It’s horses for courses.”
Chesser said: “The tied model is crucial for British pubs to survive around its communities but it will continue to evolve in line with consumer demand, and move away from being centred around beer and encompass all the elements the pub has to offer – including low and no alcohol.”
The panel were also challenged by the audience to say what they were doing to address diversity issues within the sector.
Georgel said that while Admiral has a relatively high percentage of female BDMs the challenge was to progress that into more senior roles.
Mountstevens said: “We need diversity of gender but also diversity of thought and background. We are doing a lot of work about how we draw people in from fundamentally different backgrounds and give them a platform to progress their careers.
Townsend said: “We have grown our headcount from 600 to nearer 2,000 in the past few years. It’s probably not that surprising that in the final 1,4000 the diversity is far more balanced and I think that is a god sing of the direction we are traveling in. It also forces us to look at things like flexible working and career re-starts. We have to be honest about the fact that we haven’t made it that easy for a mother to return to her career after having a baby.
Georgel concluded: “We have heard the use of the word ‘consumer’ more today than probably ever before at this conference. There is a sea change. There has been more a perception of us as property companies and now that is shifting to us all focussing on the needs and experiences of consumers. That should start to attract new and different people.”