Buying groups: Together they're stronger
To most customers, a pub is a pub. The different between the a managed outlet and an independent tenancy, lease of freehouse is not something they understand.
However, price is something customers definitely notice. In a market where meal and deals menu offers abound in the managed sector, the fact that independents struggle to match such offers is a clear disadvantage.
Buying groups aim to help bridge this competitive gap. One of the most active in the pub sector is Leisure Supply Group (LSG), which was set up in 1995 and is now the UK's leading buying group for leased and tenanted pubs. Although independent of pub groups, it works with operators such as Enterprise Inns and Shepherd Neame to by offering free membership to their licensees.
Through buying deals with more than 40 suppliers - these include Brakes, 3663, and Walkers - it offers members products such as food and snacks, glassware, cleaning products, catering equipment and payment technology.
LSG now has more than 12,000 members across the country, spending more than £21 million a year and saving more than £4.5 million last year.
For example, in Shepherd Neame's tenanted estate, 239 pubs have benefited from LSG services during the past three years, and 180 buy on a monthly basis. Last year the cumulative spend was £850k, with estimated savings of £200k.
Case Study: The Golden Cross
The Golden Cross is an Enterprise Inns leased pub located in the village of Saunderton, near High Wycombe, Bucks.
As the only pub in the village, it serves as a central hub for community life, with customers including locals and the business trade.
Lessee Mark Malin completed a major project in the garden this year, including a redesign and refurbishment along with a new children's play area.
This investment, along with rising costs and a fall in customer numbers across the winter, have meant that money has been tight. Malin is therefore always on the lookout for the best deals and areas where he can make cost savings. The Golden Cross is an LSG member through Enterprise Inns.
Before making use of his membership, Malin looked at other possible purchasing groups, but felt none could equal LSG's breadth of service.
"I felt that LSG had the biggest range of suppliers and products. Whatever the item, they usually have a supplier that can meet my needs."
The pub has been an active member of LSG for about eight years. "Our account manager knows our pub and I know him by name, so when I call LSG to talk through my requirements I can ask for him, and I don't have start from scratch every time to explain my situation because he knows my business."
Through LSG, Malin has purchased vending machine supplies, frozen food, bar and kitchen sundries, two tills and also his credit card terminal. Overall, he estimates that he makes approximately £2000 a year in savings. The credit card terminal alone saves around £600 a year.
