Scottish & Newcastle Pub Company rebrands and offers new support for tenants

The Heineken-owned leased pub operator has agreed to pay for some costs, such as Sky or business rates, during its licensees’ first year of trading on a new agreement. It also said that it would let its lessees terminate their contract with three months’ notice at any time on the agreement.

The new three-year Business Start-up Agreement offers low-cost entry to the trade, starting at £10,000, which includes a £7,000 minimum requirement for working capital.

“It’s a lower risk way for people to come into the trade,” trading director Chris Moore told M&C Report​. “They’ll recognise we’re serious about being good business partners.”

The Blue Anchor in Hoylake, Merseyside, is one of half a dozen pubs to have trialled the new agreement.

The firm has also launched a first-year support package for pubs that require “additional financial backing to fulfil their potential”, and is focused on helping with cash flow in the crucial first year of trading.

“Measures to keep cash in the business are tailored by pub, ranging from payment of business rates and Sky licence fees to additional discounts on beer,” the company said. “The agreement also provides incentives and rewards success; beer sales exceeding targets attract an additional discount, and cash bonuses of up to £5,000 will be paid for high scores in mystery shopper visits.”

Moore added: “We’ve got great pubs with lots of potential. What we recognised was that in some pubs it’s going to take time for them to build on that potential and find their feet.”

The company also said it was changing its standard agreement from a five-year term to a rolling three-year term to “offer greater flexibility to operators”. Terms of 10, 15 and 20 years are being introduced as standard options on its fully repairing and insuring agreement; all of these can now be assigned after two years.

Moore said: “We consulted with existing licensees and looked at the marketplace, and the feedback was to give people more options.”

Meanwhile, the new Star Pubs & Bars business is beginning a 12-month rollout of new schemes to help pub licensees build business and reduce costs. The schemes include:

• A food support programme providing a range of “off-the-shelf menus” backed up by kitchen investment and training.
• A choice of “high-quality coffee solutions” provided by Nescafé.
• Online training and a new support-focused website for existing lessees.

Moore said there were “rigid procurement exercises” to find the suppliers. The two criteria for finding the food provider were the quality of the offer and a recognition that food in leased and tenanted pubs “is not the easiest to deliver”. “It really is high quality. We are not playing at this,” he stressed.

The developments come almost one year after Heineken bought 918 S&NPC-operated pubs from RBS for £422m.

Moore said: “Our new Star Pubs & Bars identity is not just a name change. It is intended to reflect the many developments behind it that make a real difference to people’s businesses; both in terms of attracting new talent into the industry at a time when business confidence is low and bank lending tight and making it easier for all our lessee partners to build their businesses by creating further ways of increasing profits and reducing costs."