Doing a U-turn on the tenanted sector

A couple of months ago I attended the MCA Tenanted Pub Company Summit for the first time. It was fascinating and had a huge impact on my long-held views on this part of our industry.

When I started Red Mist Leisure in 2004, our first step into the world of pubs was via a tied Punch lease on the Surrey/Sussex border. It was a small and idyllic rural pub with great potential but it was in a real mess, trade was non-existent and the building was tired and dilapidated. We had few funds so we closed while we did the cosmetic improvements ourselves pending a joint refurbishment with Punch later.

I had just turned 27 and although I had some solid hospitality experience behind me, my only real experience of pubs was from the other side of the bar. As such I looked to Punch for guidance, especially when it came to planning the improvement works. I needed their input on what investment I needed to make, the extent of the refurbishment, and the style of design and décor. In hindsight I realise their knowledge and guidance was very poor, and we ended up with a pub that didn’t properly meet the needs of the target market or local community, had too much investment from both parties and was not sustainable.

I can’t of course lay all the blame with Punch, I have to take my fair share of the responsibility. But I looked to them as the experts and, ultimately, they weren’t.

Fifteen years on and holding to the view that many pubcos were out of touch and lacking clear direction, I now realise how wrong I’ve been. The leased and tenanted side of our industry has fragmented much over recent years and groups like Punch, EI Group, Admiral Taverns and Star Pubs & Bars are smaller and far more in tune with the needs of modern pub goers.

It was refreshing to hear talks from leaders of these companies outlining their strategic plans for the future.

Each presentation was focused on key aspects like quality, passion, standards of operation, customer engagement and local communities, areas I believe had been overlooked for too long.

Later in the day we heard from Peter Hansen, of Sapient Corporate Finance, who pointed out the huge interest and investment this part of the industry is attracting from various financial institutions.

The thoughts and experiences of the day really stuck with me. The leased and tenanted sector has had a rough ride over the past 10 years and we are all aware of pub closing consequences that have followed. However, the dynamics have changed, a substantial shift has occurred and, looking ahead, I am really optimistic about the future success of the sector if the current direction is followed.