Mark Daniels: Going for Growth
I've just finished reading a report stating that Greene King have spent £1.8m supporting their tenants through what it describes as the toughest trading period for many years.
The support, given in the twenty four weeks leading up to 19th October, included rent concessions, service charge waivers, discounts and the provision of a range of value lagers, ales and wines and yet, despite having also endured one of the worst trading periods since coming in to the trade, I don't recall them offering me any assistance at all, even when it was obvious things had come a little unstuck. My once-busy little village pub recently went through a trading period so tight it could have generated its own diamonds from the coal in the fire grate, but it's now back on track and all thanks to my own efforts and the absolute hard work of my wife and staff.
Rather than offer assistance, however, what my brewery did was change my Business Development Manager twice in the space of three months (my fifth since 2005) and put some of the competing tenancy pubs near me on the market with offers to entice new tenants in that include a free-of-tie option on certain products and reduced rents.
As a Pubco, the Pub Partners division of Greene King has often voiced in the press that it will support its tenants and Greene King have won awards for their support packages. Yet whenever I've asked for support, relief, a bit of time or some form of assistance I've been told it isn't available to me.
I'm often careful when it comes to being too critical of my landlords and am fully aware that my tenancy allowed me to come in to the trade for a lot lower cost than buying in to a freehouse, but it is galling to hear of offers going around that clearly aren't available to me - or to hundreds of other Pub Partners tenants equally suffering in these lean times.
Upon signing in to my tenancy, however, I was asked to pay some money in to a fund that would be used towards training costs. £325 of that investment is still in that fund and is clearly visible in one of 'my accounts' when I look at my details online. Mulling over my training needs I decided that, after three and a half years running my beautiful pub, the best thing I could do was use that money and put it towards some marketing.
After a bit of haggling with the advertising department of a local paper I negotiated a ten week advertising campaign for £300 and asked my new rep if I could have the training money to put towards a marketing campaign to build my business towards Christmas and hopefully retain customers in the early part of the New Year.
The answer was a resounding no. The training fund, according to Greene King, can be used for nothing other than training and there is no flexibility on this decision. Have a free keg of Fosters instead.
Tempting, I grant you, but given the current economic climate a free keg of Fosters, even accounting for the large difference between what the cash & carry would charge me for one and what my tenancy charges are, is not exactly what I'd call helpful in this particular instance. First, it's got to be delivered, then it's got to be sold, and the money coming in from it will simply disappear in to the general running costs of my business.
Whereas £325 in my hand that can be used immediately to pay for any marketing campaign would provide instant help and allow me to allocate my cash much more accurately than trying to trickle out the sales of a few pints of Fosters.
Why not use the training money, came the suggestion as I argued my point, to go on the Go for Growth course? That would help me grow my business, apparently - but, I suspect, it wouldn't provide the growth that putting a regular, weekly advert promoting my Christmas menu and New Year deals in to one of the leading local rags for the next ten weeks would.
"We both know that if I don't use that training fund I'll just get it back when I move out," I opined, "so it would be much more useful if I could just have it now." The response was immediate: check the small print of your contract. Whatever money is left in the training and decorating funds upon departure, if not used for their allotted purposes, will be kept by the brewery. In other words, even though it's my money, I can't use it to the benefit of my business.
£1.8 million might have been spent assisting 320 pubs with rent relief, free stock and value product ranges but, in a division that has seen revenue drop 2.3% in the last year, it seems that not all the pubco's tenants are eligible for support.
I haven't asked for much, but it seems I can't have three hundred and twenty five quid of what is effectively my own money in order to go for growth and keep my business prominently advertised in what is going to be a very tricky start to 2009.
