Back on track
In the wake of a troubled 18-month period, Wolverhampton & Dudley has transformed its managed pub business. Mark Stretton reports.
When Wolves unveiled its last set of numbers it announced Pitcher & Piano, its troubled high street brand, was no longer on the market.
The chain had been up for sale as Wolverhampton & Dudley concentrated on becoming a focused community pub retailer. It moved away from the high street last year, selling Lloyd's No.1, TP Woods and Varsity, as well as its unbranded venues.
Having watched the perceived value of the 33-strong Pitcher & Piano package plummet from £65m to £50m and then further still over an 18-month period, the company decided to halt the decline itself.
Mike Dowell, previously the managing director of Costa Coffee, was put at the helm. "Any fool could give it away," said managed pub boss Derek Andrew (pictured above). "We have decided to keep hold of it. The fact is, Pitcher & Piano is 33 pubs out of 600 managed businesses."
The revolution is more widespread than just Pitcher & Piano, and Wolves is in the midst of transforming its entire managed house business.
The division has been renamed Pathfinder Pubs. The new title was borne from a desire to unify workers in the division who have landed on the Wolves' payroll through a series of acquisitions.
"You get the best out of people by giving them an identity," said Derek. "We had our staff working under a host of different names - Banks's, Camerons, Marstons, Mansfield and so on."
Renaming a business can be costly. Unlike Consignia, the national postal service that will write-off about £1m in reverting back to the Royal Mail moniker, Wolves did not feel the need to dig deep in its quest for a new managed name.
"We could have spent a fortune on consultants," said Derek. "Instead we went down the pub, had a couple of pints and some chip butties and decided what we wanted - I think the bill was about £40."
Derek said they arrived at Pathfinder as the name gives a great sense of direction. It also encapsulates a spirit of adventure, and enlightenment. "I'm trying to create a team," he said. "I want people to embrace the change rather than be a victim of it."
More important than the new name, says Derek, are the values and the codes of behaviour underneath the new moniker.
"All good businesses should have a vision and a mission," he said, "but one of the things we have been good at in the past is coming up with wordy, complex sentences that look very impressive.
"What is important is what we are going to achieve from doing this. It's easy to have a call to arms and a mantra, but it's all in the how - it's what you do that is visible to customers and staff."
Pathfinder is purely an internal name. It will not appear on any signs or logos and will not be visible to the paying public. What should be apparent is the shift in culture, says Derek.
"We want to be the best community pub group in the land," he said. "As a springboard for that we have the best managed houses from four different businesses. I got the pick of the bunch."
The Pathfinder boss says he wants his pubs and people to be thought of as local heroes. "What's the acid test?" he said. "It's for customers to realise that nobody does it better than us - we want our pubs to be the pubs of first resort.
"We want customers to say, on balance, that Pathfinder is where they want to go."
He sees the company's Bostin' Local pubs as the best vehicle for realising the ambition. Bostin' is a black country expression for great. So far the company has converted about 60 pubs to the concept, and will convert 200 over the next five years. At £400,000 a throw, the project represents an outlay of £80m.
Wolves sees an average return of about 25 per cent on the investment. The brand is already evolving and the 60th Bostin' will see significant changes from the first. "It's a living, breathing thing," Derek said. "You have to measure and change and question all the time."
Putting on the sales hat, he says Bostin' Locals appeal to everyone across the social spectrum - social profile, generation and gender included.
"The hope is that people will know that when they step into a Bostin' Local, they are in a bloody good pub - really well run and for more than one type of occasion."
The large-scale pubs, which maximise the capability of the local, are pubs for all seasons, both in terms of weather and sport. "It's all about the horse-shoe bar, creating subtle areas," he said. "We make the bar accessible to females, who perhaps don't want to be greeted by the sight of builder's arse when they walk in."
Derek says the company has done its homework. "One of the sacred cows was that local pubs must have dart boards," he said, "until our consumer research told us that not many people like darts.
"It's an exclusive activity. The team comes in and hogs the board. It deters female customers. Bostin' Locals will not have dart boards."
Honest and open, the Pathfinder supremo admits that no idea is too good to steal. "But you must also be original and innovate," he said. "You don't always get a coconut. One in 10 new programmes don't work and the key is to understand why."
He says success comes from understanding what people want.
According to research, the cleanliness of toilets is more important than the brands on the beer pumps. "You'd be better off advertising 'great toilets' in the window rather than the drinks you're selling," he said.
"By and large you get the same products wherever you go - it is the context and environment in which they are served that is key."
Essential to the right atmosphere is staff service. The greeting customers receive is paramount to their return, said Derek. "Our entire business is at the mercy of the opening sentence between the barstaff and the first-time customer."
Rather than offering two-bob promotions, Derek wants to concentrate on a solid offer all the time. "People don't want to buy that drink for a discounted price at certain times - they want a great offer all the time," he said.
The Pathfinder chief says that if you do offers, make them Monday to Friday, all day long.
As well as drawing a line under the various remnants of other businesses that make up Pathfinder, the new name also represents another step away from the "brewer rules all" ethos.
Derek says that companies such as Wolves are still emerging from their brewing roots and the "we are a brewer, we know how to do pubs, so people will come" mentality.
"We are retailers," said Derek. "Retailers must give the customers what they want, and present it as profitably as possible.
"We have to remember that we are a business not a charity - we need to profit from our activities."
As soon as the company emerged from last summer's hostile Pubmaster bid intact, it set about building the future.
The latest set of results and concerns over long-term growth have left some people cold. The management has delivered on promises and, although the jury still appears to be out, Derek and the Wolves board seem determined to forge ahead.
"I feel we have a vehicle in Pathfinder that will bring some real results and benefit," he said. "We have emerged from what has been a fairly traumatic 18 months with something of the Dunkirk spirit - we will never let ourselves get in that position again."
Picture: Derek Andrew, boss of Wolverhampton & Dudley's managed pub division, which has been renamed Pathfinder Pubs: "We want to be the best community pub group in the land."
Related articles:
Wolves under City attack (17 June 2002)
W&DB names new P&P chief (27 May 2002)
Pubmaster
