Pulling the couch potatoes into the pub
Many licensees blame cheap, off-trade booze deals for the drop in pub sales, but a recent consumer survey suggests there's more to it, reports Phil Mellows.
Customers who could be yours are drifting towards supermarkets and sofas. The low prices are certainly a draw, but it's more complex than that. The question is, are you giving people enough reasons to make a visit to your pub worth the money?
One of the most interesting facts to emerge from the OnTrack survey conducted by retail consultancy firm him!, which questioned thousands of customers as they left the pub,
was that 50% thought the drinks were too expensive. Yet a staggering 54% didn't actually know what the prices were!
This strongly suggests that lower prices aren't the solution, even in an economic downturn, says Tom Fender, sales and marketing director of him!.
"It isn't about price," he explains. "Waitrose and Sainsbury's are winning in the recession, while Aldi, Lidl and Asda are the losers. It's about delivering value. During a recession we become less tolerant. We want to be served better and quicker."
According to Fender, the pub trade has to face up to some harsh realities and change the way it does business. "This industry feels sorry for the 39 pubs that are closing every week — in any other industry they'd say they weren't good enough.
"Change is crucial. Alcohol consumption is in decline. Pubs have to ask how they can extend what they do into other areas. Look at the way Amazon, Tesco, Boots, petrol station forecourts, railway stations and post offices have diversified. It's all about evolving, and the pub trade can learn from these other industries.
"Pubs have so much going for them — space, opening hours and car parks. But do licensees know what their sales are per square foot? There's no shortage of ideas when you look at what other retailers are doing. But what works for pubs? And how far can you go down the Tesco road before you start to lose the things that people visit
pubs for?
According to OnTrack, Shepherd Neame is one of the best performers, picking up him! awards for quality and efficiency of service at its pubs.
"Petrol station forecourts and multiple grocers are competing in the same market as pubs to some extent, and hearing their experiences is an opportunity to think about the leisure pound rather than the pub pound," says Shepherd Neame's retail director Nigel Bunting.
"You've got to differentiate yourself against the competition. Service levels and atmosphere are crucial. We have an average one-and-a-half-hour dwell-time in our pubs, and we wouldn't have that if our service wasn't good and there wasn't the ambience. Customers are more careful about where they're spending their money. They want to make sure the experience is right, and that it's value for money.
"We've changed our training and customer service to focus more on what the customer wants, and what we need to do now is look at upselling. Another area of learning is around marketing and communications. People aren't aware of promotions, so that's something we can work on."
Peter Wells, marketing director at Charles Wells, says there's a "huge amount" to think about.
"Tesco does four times as much consumer research as anyone else and it really understands what products customers want and makes sure they are available — and it is ruthless in delivering this. There's definitely more we can do to understand our customers.
"For the leased and tenanted trade it's challenging, but we've got to get across to licensees that it's good to know what people are saying about you and to respond to bad comments.
"It's important to have different income streams, but pubs that try to do everything for everybody miss the boat on everything.
It's the fundamentals of customer service that are the foundations of success."
Tim McCord, director of sales and marketing at Punch Partnerships, says: "The question I've been asking is, what if Tesco did pubs? We have to start thinking out of the box. We have to be consumer-centric, rather than beer-centric, and we should be looking at pubs as first and foremost dispensing customer service, not drink.
"We should think of pubs as brands and ask what is the consumer offer? Who are you targeting? The best pub operators already do that.
"It's about challenging a mindset. We're stuck thinking about beer and food when we need to think how we can use retail space to meet consumer needs. Every pub has a unique space that can give it a competitive advantage."
A trip to Sainsbury's has already inspired Batemans' joint managing director Jaclyn Bateman. "They had a lot of things marked on the shelves at £1 or £2," she says.
"Rounding up prices like that is an extremely interesting idea for pubs, especially if you're selling bottles from an ice bucket in busy periods. It's a good initiative.
"There also needs to be more emphasis on training and using the internet. It would be interesting to have some information on how people use the internet to choose which pubs to go to."
Steve Benton, head of commercial at Marston's, found the research "good for coming at things from a different perspective, for thinking about the art of the possible in a pub industry that has been ruled by what you can't do. It proves there's hope for pubs.
"There are some good ideas to think about — like selling ice cream. In fact, I've already got in touch with Wall's. It's a way of targeting kids and getting families to stay in the pub longer."
Paul Holmes, marketing communications manager at Admiral Taverns, is intrigued by the idea that pubs should be monitoring their sales per square foot. "It's an interesting take," he says. "We should be more retail-focused. There are opportunities we're missing — at petrol forecourts you can buy anything under the sun.
"It has to come down to educating licensees, and the trade press could help by publicising this kind of thing — we can't tell our tenants what to do. You've got to be careful, though. These kind of ideas work very well if you're a country pub, but they won't work everywhere."
