The launch of Spirit Pub Company’s new concept Golden Oak Inns will move its estate up the value chain and lead to the shrinking of its John Barras estate from c230 sites to c70 over time.
The move will see the majority of the John Barras estate converted to Golden Oak Inns and to the Flaming Grill format.
Spirit said that with Golden Oak it had identified a clear gap in the rapidly evolving “locals” market, which is neither community, male-dominated pubs nor gastro pubs, nor pub restaurants.
It said that Golden Oak is a new take on the local pub, “better by design – a higher quality of food, drink and atmosphere”.
The concept was created with licensees and piloted in its leased division in 2012/13, before being refined and trialled in its managed division over the past year. Spirit believes that the brand has the potential to reach 150-200 sites.
The company said that returns across the seven sites so far converted to the concept had been “extremely strong”, with plans to accelerate its roll out to c60 sites initially.
In Solihull, the group invested £189k converting a pub into a Golden Oak site, seeing a weekly sales uplift from £7.8k to £12.8K, and delivering full payback within 12 months.
Chief executive Mike Tye said: “As the pub market has rapidly evolved we have purposely held back conversion of certain local estates until we found not one but two long-term solutions. Many will convert straight into the first of these – the Flaming Grill – but some will transform into an altogether higher-quality local.
“No longer drink or male dominated, these are not gastro pubs but high-quality, warm locals with great food that you or I would be proud to have in our community. This is an outstanding concept – absolutely on the money for the target audience.”
The company said it had reassessed the potential roll out of Flaming Grill from 150-175 sites to now 250-275 sites, with the refined concept and evolution of its foot-print allowing for greater demographic options.
It invested £135k converting a pub in Derby to the brand and saw weekly sales climb from £16.6k to £22.5k.
The company said it saw a total portfolio market opportunity of up to 1,200 sites for its managed division.
Comment by M&C Report editor Mark Wingett
As consumer confidence returns there is a sense that a trade up has begun from the value offers that had become prevalent across the UK’s pub market. With the launch of Golden Oak Inns, Spirit has arguably moved ahead of its peers in recognising this; launching a new take on the “local pub” at the expense of its most value-orientated brand John Barras.
Chief executive Mike Tye is confident the new concept and the more proven Flaming Grill format can hold its own agaiinst its value-orientated competition. He said: ”While in some cases we are fishing for sites in different ponds to our competitors I am fully confident that where we need to our brands can go to head to head with any competitors, so I am prepared to trade in close proximity whether to pub/restaurants like Hungry Horse, Brewers Fayre or Sizzling or metropolitan pubs such as Nicholson’s.”
Of course the caveat to all the talk of potential concept rollouts is the company’s expected takeover by Greene King. However, with that company’s own value offer Hungry Horse believed to be currently experiencing a decline in sales, it is not inconceivable that Mike Tye and his team have developed a ready-made answer to reverse this slide.
