I honestly believe we can make the tenant and leased model work,” says Chris Jowsey, insisting that, for Star Pubs & Bars, the market rent-only option (MRO) is nothing to be frightened of.
For the trading director within the Heineken-owned pubco, it’s about making the model work for everyone. “The value of the tie stands on how we help tenants to grow their business. It’s those retail skills that we need to foster and grow.”
To maintain that, you need time. “If you don’t offer long-term leases, we don’t think we’ll attract the quality of operators we’d like to attract. We want sustainable pubs that are there for five to 20 years, and we want operators to realise some commercial value from their hard work.
“If I was an operator, I would be worried if I wasn’t sure I could have it for a longer term — you’d be building the business for someone else.”
It’s that focus on development and partnership that helped power Star to success by taking the title of Best Tenanted and Leased Pubco at the 2015 Publican Awards.
Jowsey says Star has made great strides in recent years. “We’re definitely getting better, we wouldn’t have won pubco of the year if we weren’t, but there’s more to do.”
The win meant a lot to the company, he says. “I think it was recog-nition of how far we’ve come in a short space of time.
“However, it’s not just about winning it though, it’s about keeping it. That’s the mentality of the business. It’s great to win and be recognised, but we need to do it again.”
The company is certainly focused on what counts. “People make the difference,” says Jowsey, and the company continues to invest its efforts in that area, offering five-day training courses to prospective new tenants. “They can’t have a pub with us until they’ve completed the course. We’re very focused on their business plan.”
And that is paying off, he claims. “Since launching the training, our failure rate has fallen to 0.5% — we’ve had about two or three failures in the past 18 months, which is industry-leading.
“It shows that we’re recruiting the right people in the first place, we’re then equipping them properly and supporting them through that first 12 months.”
He says the support they offer is proving appealing to multiple operators particularly. “They are seeing that they can make money with a Star pub,” says Jowsey, who claims the company is taking on pubs that have been closed for years, and now, reopened, are taking about £30,000 a week. “We can make the difference with the right type of operators,” he maintains.
So just what does Jowsey and Star look for in an operator? “We want people who fit the offer — you need to know what you’re trying to create, and look for somebody who can fit with that. Then you need really good front-of-house skills, a good commercial head and, ideally, an operational background.”
He makes clear, however, that there’s no single template.
He says that having commercial ability is vital: “There are some people who do it as a lifestyle, and do it well, but they’ve got to have some kind of business sense, otherwise the pub will fall behind. If they’re driving a great pub then you’ll find the money follows.”
Jowsey has not spent his life in the trade, despite an early start working in hotels, he joined Scottish & Newcastle after having, in his own words, “failed to become a dot-com millionaire”.
Having worked his way through a number of divisions within the business, the opportunity came to move into the pub operations and Jowsey seized it.
“I spend a lot of my time out in the pubs and with our business development managers — it’s the best way to find out what’s needed and what’s going on.”
The company is certainly investing in its estate, with Jowsey announcing, on the day of our interview, a whopping £30m fund to be spent across its estate, equating to about 51 capital projects, with around £175,000 being spent on each pub.
Jowsey is also proud of the company’s investment in beer quality through it’s Smart Dispense system, which he says is bringing cellar technology into the 21st century. “We talk a lot about quality, it’s a Heineken value, in the retail part of business and the brewery. However, a lot can go wrong on the way to the consumer so we stole ideas from the Heineken world — and they’re good at ice-cold lager.”
He says the Smart Dispense system looks like a “big white octopus — very science fiction” but carries a number of benefits. It cuts losses — the low temperatures hinder bacteria growth to the extent it can reduce wastage by 75%.
“It’s so little hassle, easy to operate, cuts your wastage and someone comes in to clean it for you. It comes out so well, you even sell more beer. We’re seeing around an 8% uplift in sales of pubs that have installed it.”
The drawback is that the pubs have to pay for it, but with costs running to £300 a month in rent, Jowsey says the payback is worth it. And it’s proving popular, since the pilot launch about two years ago, the company has seen 200 pubs install the system, and he says they’re aiming to have 500 in the next 18 months.
Craft beer is another area he’s embracing: “It’s great for beer and it’s great for the pub. People don’t say, let’s stay at home and get some craft beers in — it’s given people another reason to go to the pub.”
However, he acknowledges the craft market remains small and is often just a great marketing device for some pubs: “It’s a powerful tool but we don’t sell a lot of it. Often having them on the bar signals that we’re willing to try new things. I don’t see the whole world being craft beer in the future though.”
It’s towards the end of the interview, after firm statements on commitment to the tied and tenanted model, when Jowsey slips in the news that Star is set to open its first managed site (revealed in the PMA on 2 July).
“We’re going to put our money where our mouth is and open our own pub,” he says, one which will be run under a new management pilot model.
However, he’s keen to play down the idea that the entire thing is a pilot run for a shift into a managed estate, saying the main aim is for it to provide an experimental facility for trialling new ideas and training staff, both from within the business, but also the wider estate.
“It will be a real test of where we’re adding value, and any new ideas will be tested in that pub. It’s a great way to know we operate excellent pubs. The key thing is to stand if front of licensees and say, ‘here’s a model’.
“It’s not us moving into that managed model. We have no plans to roll it out at this stage.”
So, for Star Pubs & Bars the future is bright — it’s tenanted and leased, with maybe a pinch of managed, and it’s certainly something that Jowsey — who feels he’s come full
circle from his early hotel days — is embracing: “What I enjoy is being out and about in the pubs. Meeting people and hearing their stories, it’s very motivating — it’s great, it doesn't feel like a job."
My kind of pub
“The ideal pub for me is somewhere local, where I can take family as well as friends. It’s got to have a food offer and be welcoming to kids — then I can go there more often. But it’s also got to have the ability for me to be there with my mates. I want to know the people who run it, and I want them to know me. It’s a pub for my community.
“My favourite is the Angel of Corbridge [in Northumberland] — beautiful pub, beautiful location, 150 yards from my house. It has a great bar, and they’ve put Heineken on, but probably just for me!”
Career key dates
- 2003: Joins Scottish & Newcastle
- 2004/5: Oversees the integrations of Bulmers Cider Co and Federation Brewery into S&N
- 2006: Becomes managing director, Newcastle Breweries
- 2008: Appointed managing director, John Smith’s
- 2010: Becomes commercial director, Heineken UK
- 2013: Lands role of trading director, Star Pubs & Bars