Neame said he is “unashamedly pro” the traditional three year tenancy model as the most suitable arrangement to give the best offering to the tenant and customer.
“I would say I’m probably more optimistic now about the potential for the tenanted sector than I ever have been in the 23 years that I have been in the industry and the reason for that is because I see great opportunity for investing in improving our pubs, our services and our offer and thereby driving higher returns for ourselves than at any stage during my time in the industry” said Neame, speaking at the Tenanted Pub Summit.
Neame said the time is right to invest in both the pubs and the licensees, which Shepherd Neame has done by offering licensees business support packages to control and reduce costs, passing promotional and marketing packages from third party suppliers on to tenants and inducting new licensees with bespoke training for the first six months that includes a fully-audited induction trail.
“We’ve reviewed our offer to include attractive pricing of beer, affordable rent, flexible short term agreements a return for both parties and an incentive for both parties to make a joint investment for mutual benefits.”
In response to “a rapidly changing consumer market” the company has invested in enhancing consumer experience through refurbishment of both interior and exteriors; aligning its portfolio of pubs with consumer needs in terms of inventory and beer quality; and focused heavily on the customer service and product offering to drive footfall.
On the future of the tenanted model versus franchised pubs, Neame said: “I agree the franchise model does have some merit in parts of our sector but I do not agree necessarily that it will become the norm.”