To run managed or leased pubs... that is the question

Greene King's decision to boost its managed, brand-led pub estate over its tenanted one is a bold move.

The Suffolk brewer, led by chief executive Rooney Anand, sees a future in which a high quality retail offer revolving around food as well as drink revenue holds sway. Any pub company worth its salt wants to present the consumer with an unassailable offer, but such an ambition sometimes falls short for a variety of reasons.

Economic conditions, regulatory pressures, taxation, wholesale prices beyond the wit of many an operator and cash-strapped consumers can all combine to make life difficult, as recent experience appears to bear out.

Notwithstanding that it has many an excellent tenant, Greene King believes it can achieve an even better performance over the long term by keeping more of a firm hand on its tiller.

Judging by comments in its results announcement and Anand's own observations the company appears to regard running a greater number of managed pubs versus tenanted outlets as translating into a better retail experience, into better cost control, into greater opportunity to enhance margins and a better - and potentially bigger - bang for its investment buck.

Some have read into the shift in emphasis away from tenanted - for which read 'tied' pubs - towards a more managed operation as an admission of defeat, that the structure is unworkable. Only time will tell whether such observations will prove to have been prescient.

In the meantime Greene King is looking to make more of what it has already got, improve those aspects of its business which need a lift and shed those which - put frankly - are not worth its while retaining.

With some companies transferring managed pubs into tenancies it'll be interesting to see who comes out on top.