No need to let Clarke have his way

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Related tags: Executive tim clarke, Wal-mart, Supermarket, Tim clarke

Mitchells & Butlers chief executive Tim Clarke was in a talkative mood when the Morning Advertiser met him this week. His company newly demerged,...

Mitchells & Butlers chief executive Tim Clarke was in a talkative mood when the Morning Advertiser met him this week. His company newly demerged, Clarke has clearly been thinking hard about where his 2,000-plus managed pubs, which already earn 10% of the industry's entire turnover, are going from here. The path ahead for Clarke involves using his company's size and brand strength, like Wal-Mart in the supermarket sector, to deliver value to customers through targeted offers and by keeping prices firmly pegged. This, according to Clarke, will continue to deliver market share. More revealingly, Clarke sees JD Wetherspoon as the only managed company with the critical mass capable of pursuing a similar strategy. Of course, other managed operators like Ian Payne at Laurel and Bob Ivell at Scottish & Newcastle Retail will regard Clarke's views as a little dismissive of their own position and potential. But Clarke's vision of two mighty managed operations pinching ever-more customers with offers galore might sound thoroughly depressing to independent operators. After all, look at the way the big supermarkets have devastated the ranks of independent butchers and others. It's worth bearing in mind, though, how different pubs are to supermarkets. Nobody goes to Asda for a conversation with the manager or to meet friends ­ or waxes lyrical about the ambience at the deli counter. The best management training systems struggle to deliver the consistent passion and commitment that comes from the host who has invested his own money in a pub, for example. Go to a number of pubs owned by any managed operator and it is clear that service can be as variable as the weather. But for those entering the pub trade for the first time or re-negotiating a lease, Clarke's vision of the future is worth remembering. The subdued economic climate means it's a great time to build flexibility into your lease ­ or drive a hard bargain on a freehold price. Keeping fixed costs as low possible is one way to ensure Clarke doesn't have it all his own way in the years to come.

Related topics: Other operators

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