Casual dining is taking a hammering right now, Jamie’s, Byron, Prezzo etc and yet Wetherspoons, once the ugly duckling, is now looking like the swan of the sector. Tim Martin founder and Chairman of J D Wetherspoons plc explains more about fashion and other pub centric subjects.
Tim is at a loss to explain this tide of well being towards his pub chain, considering that for 38 years it has largely been deemed unfashionable. Perhaps they are the Aldi or Lidl of the pub sector, I muse. Tim thinks not, although he admires them much.
They have a ‘cookie cutter’ approach, which he says JDW’s has deliberately not taken. Every pub is individual, and whilst many in the sector have been seduced by the notion of brand, in pubs people like the individual nature of them.
We are sat in the Shakespeare’s Head in London’s Holborn where everything is designed around the name and tells the story of the name. Tim proposes that, maybe, the world has moved away from the cookie cutter approach and more towards their way of thinking. They have been developing individual pubs for a long time.
It is impossible to conceive doing a professional interview with Tim Martin without referencing BREXIT. I suggest that perhaps BREXIT has put the brakes on things in the general economy. It is firmly rebutted – VAT receipts up by 15%, Income tax receipts up 5%, tourism at its highest level and household income at historic highs along with 300,000 jobs created in the last 12 months, Tim firmly and fairly asserts that economically things are in good shape.
The ‘doom narrative’ is peddled by a ‘remain dominated sect’ comprising the Oxbridge dominated elite, economist’s that write for the Financial Times, The Times, and others. The doom narrative was created in George Osborne’s mind desperate to find a theme to justify the story. In actual fact the evidence points in the other direction – the U.K. is doing quite well.
Wine and spirits comprises as much as 20% of the Wetherspoons business, so an important part of the make-up. Whilst he has always been one step away from the wine and spirit industry, he recognises that it is made up of skilful intermediaries. The fact that the same spirit brands are behind the bar today, Matthew Clark is still a supplier and that Diageo a U.K. listed company demonstrate the resilience and strength in the U.K.
Whilst duty has gone up the really big success is wine. There is a tremendous amount of it now in the on and off trade. Whilst not suggesting that he is a wine expert if offered a glass of New Zealand Sauvignon, particularly if it was a glass of Villa Maria, he would consider himself an expert. Most of the wines on the Wetherspoons list can be seen in a supermarket, and with people drinking less and spending a little more, I wonder if it will stay like that?
It is possible, but unless the noise from staff and customers becomes so loud for now it will. Their bars serve much wine by the glass, so they want a small range with a high throughput, including draught wine, so that the serve quality remains high.
Tim’s past is rooted in beer and dealing with beer suppliers. Each pub has half a dozen guest ales on sourced through a specialist who handles all the small breweries dealings. So the focus remains on the beer.
The are 895 Wetherspoons pubs now, a few less than a couple of years ago, happenstance or strategy?
In the aftermath of the recession they got a bit excited opening second pubs in towns, which possibly didn’t warrant it. They have pulled back from that, not exactly like Napoleon’s retreat from Moscow, but it is a fun analogy. Interestingly sales per outlet have grown at the same time, is that strategic or tax driven perhaps?
There have been several initiatives that have been introduced over the last few years that have contributed. Breakfasts 10 years ago, coffee and tea before that, craft beer on a reasonable scale from 3-4 years ago, extending food times from 10am-11pm.
These all take investment and time. For example, in the latter initiative there are a lot of moving parts, from a standing start there are 1,000 hours at £10/hour to provide service before any other back of house costs in supporting.
Average size of outlet has increased as well, which might be down to opening in smaller towns, where there is just more space.
Bearing all this in mind then there will be less aggressive growth, as most large towns and cities have a Wetherspoons, so there is less space to grow into. Equally larger outlets have pluses and minuses – larger capital outlay, more bums on seats and so on, countered by the potential larger income.
Tim says that another factor is that they are not as young as they used to be so what of succession. Considering that he is expecting to still be working for the next 40-50 years, before enjoying a long retirement, succession seems like a moot point.
However, Tim looks earnestly at me whilst he says that it is a tricky question. Some companies, he notes, seem to successfully breed a culture through generations. He assures me that there are plans in place at senior management levels. They are trying to codify what they do so that there is some documentation there for future generations.
Tim’s appearance on Desert Island Discs featured the track ‘keep on walking and don’t look back’ (Temptations 1965). Maybe there is some residual culture, if he chooses to look back over the 38 years?
Government intervention in the sector and regulation is unavoidable even desirable in the alcohol sector. However one of the most ridiculous taxes ever to be introduced is the sugar tax. It will cost Wetherspoons £4M in the next 12 months.
Tim is sure that Jamie Oliver is a ‘nice guy’ but he is a ‘silly fucker’ and cheekily Tim suggests that Jamie having campaigned for the tax has now left it to the professionals to pay for it. The next two in the firing line are the ‘PR mad’ David Cameron and George Osborne who also qualify for his silly ‘F’ title.
In 20 years time could it be that alcohol is seen to be the scourge of society and pilloried as such, sent to the stocks, labelled uniformly, cast out of society altogether?
Tim thinks not. In recent years, people have moderated their consumption and it would seem too controlling for government to take that level intervention. And besides, there is lots of evidence to suggest that alcohol helps support socialising and health.
The dawn of the ‘Superagers’ where people are healthy into their 90’s, and recent research (from the US Tim believes) suggests that moderate alcohol intake contributes to their good health. Not to get left behind, Tim has upped his consumption to extend his chances of joining the Superagers.
If a hard BREXIT comes and tariffs are imposed one of the items that could suffer is Prosecco – much loved by UK consumers.
Tim retells the Kopparberg story. If they stop buying Kopparberg, which he stresses that they are not about to do, the people who will suffer most at those in the small town of the same name. So, it is with Prosecco, without the UK trade it will be the people of the Prosecco region that will suffer.
The UK trade can choose A.N.Other sparkling wine. He hopes that the EU negotiators, Barnier and crew, remember that, the UK market as the customer can choose cider, and other products, from lots of places, not least the UK. By imposing tariffs the people that they hurt the most are the producers that have built markets here.
As Tim has alluded he likes a tipple, not too much, and beer remains a favourite. He sticks around the same sort of 4-5% ales from brewers Doombar, Aberdare, Adnams and Exmoor make him quite happy. When it comes to wine New Zealand Sauvignon is a favourite. When it comes to red he lays no claim to being an expert so long as it is New World, strong, he is satisfied. Drunk alongside a plate of fish and chips in one of the pubs is a resilient favourite. Although I am minded to ask if we can get steaks in Wetherspoons now and indeed we can.
Despite Brexit etc Tim is off to learn French after our meeting, which he has done for 20 years. So, neither take him as parochial, nor his chain of pubs as cookie-cutters; he is thoughtful, friendly, refreshingly frank and challenging.
J.D.Wetherspoons may or may not be fashionable in the future – swan or ugly duckling, but it will be reliant on its leadership.
There are a number of different types of leadership which could be attributed to J.D.Wetherspoons – autocratic, Tim is the leader here; democratic as many layers of the organisation are involved in decision making; transformational, the pub sector has gone through massive structural change yet Wetherspoons is still fighting fit; possibly transactional and charismatic leadership.
Whichever it is J.D.Wetherspooons is still reliant on Tim and his unique style of leadership apparently for the next 40-50 years!
Look forward to the continuing colour that Tim and his pubs bring to the world.