Tenanted Pub Summit: Star Pubs & Bars targets minimum tenant income of £30K a year

Chris Moore, director of property and strategy at Star Pubs & Bars, told delegates at the Tenanted Pub Company Summit that operator profitability – alongside fairness and transparency – was at the heart of the company’s strategy.

“I want to put this out there,” he said. “By 2020 we want to grow the profit pool for each one of our pubs so that the minimum expectation of a licensee doing the right things should be £30,000 per annum P&L income, if not significantly more than that for most of them.”

Moore said that the rebranding from Scottish & Newcastle Pub Company to Star Pubs & Bars, and the messaging behind that, had contributed to a 45% increase in applications for lettings, and revealed that the company was also looking to halve its “lessee change rate”.

“These are some of the metrics by which we will gauge the success of our business over the years to 2020.”

He added: “Currently about 80% of our pubs serve food in one shape or another. By 2017 our expectation is basically, with one or two exceptions, that all of them will serve food. And food will make up about 50% of the sales mix.

“That’s quite a transformation from where we are as a leased and tenanted operator today.”

Meanwhile, the company has sent in a a response to the Government’s consultation on the statutory code claiming there is a need of real investment, innovation and professionalism in the pub sector “to reverse the current decline, and to get more happy customers through the doors”.

The company said: “The evidence presented by the Government for action is weak and misleading and simply does not justify the extent of the proposed intervention in our business model, particularly when the Government recognises that ‘many pub companies treat their tenants well’.

“The evidence presented by the Government relating to complaints has been shown to be wrong as it relates to enquiries on a wide range of issues. At the heart of the debate is the issue of whether or not pub companies are charging too much for beer (wet rent) and also charging above market rent rates (dry rent). We do not believe that the Government has provided any evidence that this is the case.

“We recognise that there is a high profile campaign for pub company reform, however we believe that this is driven by a vocal minority of tenants and former tenants and does not reflect the positive relationship that we have with the majority of our tenants.”

It also said that there was a significant risk that the proposals will lead to a large number of pubs being disposed of by pub companies.