A tale of two cities - the story of City Pub Co

By James Wallin, MC Allegra FS

- Last updated on GMT

Related tags: City pub

A tale of two cities - the story of City Pub Co
How one pubco successfully runs an 'east' and 'west' operation - and how they plan to go nationwide.

As with all good double acts, Alex Derrick and Rupert Clark know each other well enough to be able to finish their sentences.

As City Pub Company West chief executive, Clark says of his Australian counterpart at City Pub Co East: “We may have different accents but we’re saying the same things and trying to achieve the same results.”

The pair have been working together for the past five years, since Clark joined Derrick at Capital Pub Co and both ended up following the company’s founders – Clive Watson and David Bruce – to their new EIS-funded venture, City Pub Co.

Even their routes into the industry mirror each other, with both finding their calling “by accident” and working their way up from pot washing to the boardroom.

Now, with the backing of their mentors, they are jointly focused on growing a nationwide collection of diverse pubs in what they admit is the most competitive market they have ever experienced.

Currently operating 22 sites, the company has just raised £8m through its 6% con-vertible preference share offer to drive growth in 2016. Openings in Bristol, Cambridge, Oxford and Brighton are part of a plan to grow the combined estate to 30 sites by mid-2017 before seeking a listing on the AIM market.

The sale of the Church Street Townhouse in Stratford to Brakspear in October, was part of a strategy to focus on areas where the company believes it can create a hub.

Clark says: “Stratford is a great location and it was a shame to let go of the Townhouse because it was a lovely site but, ultimately, we didn’t see huge scope for us. It has the tourist trade but we are conscious that if we’re going to have multiple sites, we need to have office workers, students, foodies, craft beer fans. There are plenty of locations we’re focused on that offer all that.”

Trust put in managers and staff

The areas being considered across the estate include Canterbury, Cheltenham, Exeter, Southampton, St Albans and Birmingham.

Both men insist that their staff are key to developing the right concept for the right area.

Derrick says: “The only way we can successfully do what we do – running completely unique sites across a fairly broad geography – is to trust our managers on site level to run the businesses and make decisions based on their day-to-day ex-periences of their local market.

“It’s such a crowded market at the moment and there are a lot of people trying to replicate something they have seen executed well somewhere else, without really thinking through if it is right for that particular area.

Clark adds: “Design has to facilitate the offer, not dictate it and we are quite meticulous about working out what is going to be right for that area.

“Ideally, whoever is going to be the day-to-day manager going forward should be involved from an early stage. We don’t want to come up with something and then foist it on the manager.”

Profit share scheme for all

With a culture that puts front-line staff at the heart of the company’s growth, both Derrick and Clark are conscious of the need to keep their offer to staff competitive. To that end, City Pub Co, this year, launched its inaugural company-wide profit share scheme. The scheme entitles any member of staff who has been with the group since the start of the year to get an equal share of the company profits.

Derrick says: “We already had profit share schemes for managers but this was taking it forward even further. What’s great about it is that it’s split total evenly. Rupert and myself are going to get exactly the same amount as the cleaners and the KPs. It’s looking like it’s going to be about £300 a head.

“It’s such a competitive market out there you have to do something different to stay ahead and be the company everyone wants to work with. There’s a cost to it obviously but we felt really strongly that we wanted everyone to share in the company’s success.”

Clark says: “It’s really driven an interest across the company in how we are doing as a group. I was talking to one of the guys in the kitchen at our Norwich site the other day and he was quizzing me about the financial performance of the company. It’s great to foster that sort of ownership across the workforce.”

Development programme

The company has also launched an assistant manager development programme, from which the first 10 students are about to graduate.Clark says: “It’s built around practical examples of how they can drive trade in their pub and, for each module, they are going back to their pub and effecting change. It’s not just academic, they can see the impact their training is having.”

Derrick says: “Assistant managers are very much the unsung heroes of the pub. We have some real talent across the estate and this is about harnessing and developing that.”

Along with the need to compete in terms of recruitment, Derrick and Clark say they try to remain constantly alive to the shifting demands of consumers.

Clark says: “There have never been more options in eating and drinking in this country than there are today. That means you have to exceed their expectations in whatever you’re offering them. It can’t be just an average cup of coffee or a half-decent selection of beers.”

Derrick says: “It’s a challenge to find fresh ways of doing things while avoiding anything too gimmicky – that’s going to look dated in six months.

“You have to look to new places to get your ideas – I was out in New York recently looking at some really amazing concepts but it comes back to that core principal that it has to be right for that pub, that area.”

Related topics: MA Leaders Club

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