Story of the Day:
Exclusive – Greene King to trial two new concepts as it continues to create a balanced portfolio
Brewer and retailer Greene King is trialling two new concepts as part of its continuing plans to create a balanced brand portfolio, Propel has learned.
The Nick Mackenzie-led business has begun trialling Seared – a pub concept, with a “freshly grilled, globally-inspired menu”, and Everly, a boutique hotel offer, positioned as “affordable luxury”. The trials and continuing investments in the group’s existing and fledgling brands, including Crafted and Hickory’s, is part of the group’s long-term strategy to create a balanced brand and asset portfolio, broaden the range of customers it is reaching and stretch into different occasions.
The first Seared site will open on The Castle in Droitwich, Worcestershire, early in the new year. It will be positioned “slightly higher than Hungry Horse”. Mackenzie said: “Hungry Horse remains really important to us – we’ve still got 230 sites under the brand and we’re still investing in those businesses and evolving that brand – but this sits slightly above it. Seared is something we’ve been working on for a little while now. It is very much about maximising our position in the value segment of the market. Seared is about staying as a pub but putting in a really good value for money, well executed food offer focused around freshly grilled food, with a little bit of an international twist to it.”
The first Everly site will open at the Three Horses site in Rottingdean, East Sussex. The site will have 32 bedrooms and 290 covers, with a food menu focused on local produce. Mackenzie said: “We think there is a really good opportunity in the leisure/break market with Everly. It’s affordable luxury and in a premium part of the market we have not been in before.”
The company will open the sixth site under its premium pub offer, Crafted, next Thursday (7 December), with The Prince of Wales in Esher, Surrey. Mackenzie said: “We continue to hone them, but we’re really pleased with where they’ve got to, and customer scores are really good. We will take our time with Crafted, we need to make sure we get the sites right as we evolve them.”
Earlier this month, the business opened its fifth Hickory’s site since it invested in the brand last autumn, in Wrexham. Mackenzie said: “The Hickory’s management team uses a really rigorous approach to site selection and to how they open a business, and we’ve been really impressed by that. So far, the openings have been really strong, and got stronger as we’ve gone on. We’ll start to ramp up again a little bit more next year, and then we’ll start to plan what happens after that.”
Phil Urban (pictured), chief of Mitchells & Butlers (M&B), the All Bar One, Toby Carvery and Harvester owner, has said margin percentages are “not something that we obsess about” but is focused on how quickly the business can get “back to and beyond the cash profit that we were making pre-covid”.
Speaking to Propel after the company reported a 9.1% increase in like-for-like sales for the 53 weeks ended 30 September 2023, Urban said: “We were in volume growth last year. In the first half of the year, we were probably flatlining a bit. I’m always cautiously optimistic, and you have to remember that before covid, the industry was in a very slow, structural volume decline. We’re working hard to maintain our volumes and we’re doing that through a lot of guest-obsessed workshops that we do as part of our Ignite programme.
“In terms of margins, we were something like 14% pre-pandemic. It’s not something we’re that obsessed about. It’s the quantum we’re more interested in, because we probably won’t get back to pre-covid levels of margin. Once you’ve got a living wage going up by 10% and others cost burdens, then by definition, unless you really pass all of that on, you’re not going to maintain your percentage ratios. Plus, every time we convert a Harvester to a Miller & Carter, we’re sort of making a conscious decision to sacrifice percentage margin for cash margin. So, the way we view it is how quickly we can get back to and beyond the cash profit that we were making pre-covid, and we are hopeful that is only two years away.”
Urban said Christmas bookings have started a lot earlier than recent years and was “really encouraged” by their levels. However, he said a “good or bad Christmas will absolutely be dependent on the walk-ins you get”.
In terms of sector consolidation or acquisitions, Urban told Propel: “If I look in the crystal ball for M&B and the journey we are on, first and foremost, we want to get our profit back to where we were pre covid. Once we’ve done that, we’re going to be a highly cash generative business, the pension liability will have disappeared, and the end of the securitisation will not be in the too distant future. The optionality for M&B then becomes big, because we can do a number of things. But that is sort of tomorrow. In between times, opportunistically, if we felt something was on the table that was of interest, then we would make a call.”
Consumers loosen purse strings on high tempo occasions but quality and atmosphere key: Consumers are ready to spend freely on high tempo occasions in the on premise, but only if they get high quality, new experiences and great atmosphere, according to CGA by NIQ’s Evolving High Tempo Occasion Report. On consumer intercepts for the research, nearly half (47%) of high tempo on premise users said they hadn’t budgeted for their spend, while another 13% said they probably wouldn’t stick to their budgeted amount. Only a fifth (19%) thought they would adhere to the money they had allocated themselves. Nearly nine in ten say new or innovative experiences are now either essential (41%) or nice to have (45%) on their high tempo occasions. While bars and drinking pubs are still the most common destinations (visited by 28% and 26% on their last high tempo occasions), other channels include pubs with a food focus (22%) and casual dining restaurants (15%). In total, food-led venues now account for 30% of all high tempo visits. Just under two thirds (64%) of high tempo consumers say they like visiting event spaces and creative venue complexes, and half (49%) of these think the atmosphere there is better than in traditional outlets. “Consumers’ decision-making on high tempo visits is more complex than some might think,” said Paul Bolton, CGA by NIQ client director. “The range of channels they use now goes well beyond conventional late-night venues, and they are more sharply focused on atmosphere and quality. These consumers are ready to spend heavily and trade up to premium options, but with disposable incomes under pressure, they want to be sure they’re getting good value for money and memorable experiences.”
Eckbert will provide further insight in his video from the Propel Multi-Club Conference. Premium subscribers will receive access to all 12 videos from the conference tomorrow (Friday, 1 December) at 9am. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email firstname.lastname@example.org to upgrade your subscription.
Propel Multi Club organises four all-day conferences each year. Operators attend for free thanks to our wonderful sponsors. The flagship event is the Summer Conference and Party held in September (see the video above), attracting 400 attendees. If you would like to get involved as a sponsor email email@example.com or firstname.lastname@example.org