The firm’s newly appointed CEO Andy Spencer, who succeeded Clive Chesser in the role in September last year, told The Morning Advertiser (The MA) the pubco had “really clear goals” for 2025 to accelerate growth in its pubs and invest across the entire estate.
He admitted it wouldn’t be easy however: “While we are optimistic about the year to come, we’re also realistic that there are some bumps in the road, we’re not blind to that, but there is opportunity.”
He highlighted the headwinds, including the rising cost of employment which he said would have an impact on all operators to some extent, but added that consumer uncertainty was also a challenge and his role was to work hard to help their publicans and management partners (MP) deal with and offset the impacts.
Spencer has urged the Government to accelerate the committed long-term reforms to business rates to help firms like Punch plan and invest for the future.
He said: “As a sector, we’ve been dealing with annual business rate relief for too long now and it makes planning really difficult. Having meaningful and long-term reform is really important.”
Despite the challenges, Spencer said he had been “really happy” with how Punch performed over December.
“We had a really good Christmas. The teams worked exceptionally hard to get organised and drive bookings ahead of the festive period.
“We were further forward with our planning than we have been in previous years and that really came through in the booking performance, which led to strong numbers, in particular on food in our MP businesses.
“It was a record Christmas week by some margin in MP and the leased and tenanted (L&T) side performed well also. So, we had a festive period that we were happy with.”
“We’re realistic that there are some bumps in the road, we’re not blind to that, but there is opportunity.”
Punch CEO Andy Spencer
Returning to the headwinds and challenges, he said investment would be part of that solution, he explained, and help to drive efficiency in the Punch portfolio.
“We can work harder to help our publicans and MPs grow market share, that’s going to be really important for the next 12 to 18 months,” he continued.
In addition, Spencer said Punch had ambitions to grow its MP estate in 2025 by converting existing sites to the model, but at a sustainable pace, admitting they had perhaps gone “too fast” previously.
“In the past we’ve gone really quickly in that space and stubbed our toe, so now we know there’s an optimum number that we can convert in any 12-month period, and we want to get to that optimum, not the maximum number.”
He said recent investment into the Laine estate had also seen strong returns and that would remain a focus of the business as well.
“There are also opportunities to invest within our L&T estate, think a little differently about the agreements, what that looks like and if we need to innovate in that space.”
Acquisitions have also been part of the plan, with the company steadily growing in recent years: “Over the past 12 months we’ve been steadily buying single sites, and we’ll continue to do so - that’s worked well for us.
“Larger M&A activity may not come along. We’ll look at things, but that’s not core to what we need to do. Single site opportunities are important to us.”
Technology could also play a role in the business he said, but they were adopting a considered approach. “There’s lots going on to understand [what guests want]. That’s still in its formative stage and we are working to get our heads around that. But we are thinking about how we enable pubs to grow sales and how we can help our sites employ fewer, better people to be more efficient.”
Training would be key to that as well, he added: “We’re not employing teams ourselves; our job is to help our publicans and MPs be super-efficient and be the best employers out there. We’ve also just launched a new training platform, which we think will gain some traction.”
His main aim in the role is to think about what needs to change in the Punch business to ensure it can be a “brilliant partner” for its operators.
“I think we do a great job now, but I also think there is more we could do in that space to ensure we’re doing the very best we can to enable them to run brilliant pubs at the heart of communities and inspire those moments that make guests want to return.”
