The Nag's Head, Reading, has done a lot better since Greene King declared it unviable and sold it. Here's the inside view:
"Everybody hates us, but we did do two things right - we spent a lot of money on the cellar, and we sold the pub!"
Here in Oxford GK landlords are at a real disadvantage, since many people will always choose a non-GK pub all other things being equal.
GK management seem to be in denial about this. The inexperienced tenant of my local GK pub was advised by GK that her percentage gross profit figure was too low despite doing good business, so she put all the prices up by
20p. As a result the pub is now at least a third quieter than before.Paul
GK would probably advise some sort of promotion to get the customers back in again. And 20p isn't much nowadays.
In a publican there's no substitute for knowing the customers - building social links that'll keep them coming in even when the price goes up, and learning what their priorities are. The inexperienced tenant must be new to the pub, so she'd have been better advised to be cautious about discouraging her punters before they'd had time to bond to her.
20p a pop is a pretty big hike to impose all in one go, and can move a pub from 'reasonably priced' to 'a bit pricey'. If you're running a community local in a mixed area you don't want potential customers to think of it as pricey, especially if they're disinclined to visit GK pubs anyway.
Most pubco managers are obsessed with percentage gross profit. They haven't learnt the Wetherspoons lesson that total net profit is what matters, not how big a markup you can pass on to your customers.
Tied tenants are in a difficult position though, since they're cynically ripped off by wholesale pricing.
Paul
Paul
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