INN JEOPARDY

The great British boozer is under attack as ‘traditional’ pub goers decline in numbers and the big chains woo punters to their concept bars and themed pubs. But how can the ‘locals’ fight off the threat of extinction?

The rest of the world has started doing something typically British, while the British themselves seem to be doing it less and less. Our traditional pub is the latest UK export – Allied Domecq Leisure has just opened a branch of its English-style John Bull pubs in Bangkok, and is extending the chain in Asia to add to its 50 across Europe.

But while the pub takes off around the globe, its future in the UK is uncertain. The obituary for the pub has been written many times. But they now face an unparralleled pincer movement from competing leisure activities and the threat of the “super pub” concepts, which will be fatal for 500 pubs this year alone. This month the traditional British pub is facing a fresh onslaught from concept bars which will rip out its fading fixtures and turn it into a heavily marketed pleasure dome.

Ironically, given its activities in Bangkok, Allied Domecq Leisure announced this week a 150m investment in three of its UK pub concepts which are very different to the traditional local.

Allied Domecq Leisure managing director Martin Grant says that the company plans to convert up to 250 locals into Big Steak Pubs and develop the Wacky Warehouse play barns next door. These provide play areas for children, and form part of Allied Domecq’s plan to make the pub family friendly. Domecq is also expanding its 90-strong chain of Firkin pubs, aimed at students and offering an “authentic” real ale experience, complete with roaring log fires.

Domecq, along with rival Whitbread, is also launching three further leisure concepts which bear little relation to the shining, horse-brassed bar of old. The company is opening Football Football in London’s Haymarket which, as the name suggests, is a football-themed restaurant even boasting a hologram of Terry Venables. It is also launching Smiling Sam’s, a 20,000 sq ft “one-stop licensed leisure concept”, featuring video games, bowling, restaurant and bar facilities with an American Deep-South theme. Five are planned for this year.

Meanwhile, Whitbread is converting three more of its pubs to the Pitchers sports bar concept, which feature video screens showing sports.

The fact that two of the UK’s leading pub retailers are doing their level best to get away from the idea of the traditional pub is a measure of the demise of the local boozer.

Over 500 pubs are closing down each year as people turn away from the traditional pint at the local in favour of alternative leisure pursuits, such as a night at the cinema, a restaurant or a club, or simply staying at home with feet up and a six-pack of cans. From about 60,000 UK pubs at the end of the Eighties, the number could decline to 53,000 by the end of the Nineties, says Whitbread Inns.

The growth of drinking at home is one of the biggest threats to the pub operators. Brewers such as Bass are looking at direct doorstep deliveries of beer, as are supermarkets such as Sainsbury’s and Tesco. It is still unclear how consumers will respond to direct sales of beer, but it could reinforce the already growing trend of home entertainment.

The country is becoming littered with the skeletons of pubs, left deserted by shifting population patterns. The pub’s traditional base of young males is declining as the population ages. Location is one of the prime determinants of a pub’s ability to survive, and many of those in poor locations will close.

Small independent pubs are the most vulnerable. They have found it hard to get into profitable areas, such as pub food, and lack the buying muscle of the growing band of multiple pub operators.

The Government’s Supply of Beer Orders enacted in 1989 has been partly blamed for the demise of the independent pub. The Orders required major brewers to sell or release half their pubs over a limit of 2,000 from a beer supply tie. After the legislation, 14,000 pubs changed hands, creating the large but vulnerable independent sector and encouraging the new sector of multiple operators.

In the meantime, pub operators are becoming increasingly desperate in their attempts to segment the market and target ever more specific groups of consumers.

They are adapting to a new climate, where greater numbers are going to the pub than in the Eighties and spending more per visit, but visiting less frequently.

Pubs will survive by cashing in on food, entertainment and leisure activities such as video games and through selling more premium-priced drinks – alcoholic or not. Food is the most important area of focus and its value is predicted to grow by 19 per cent to 3.6bn in 1998, according to Whitbread Inns.

Despite the decline in pub numbers, operators are bullish about their ability to extract value from the new breed of concept pubs.

Allied Domecq Leisure marketing and development director Martyn Grealey is upbeat about the future: “Pubs are going to get better at focusing on customers and responding to what they want.” He sees increasing segmentation by operators as attracting new groups which previously gave the pub a wide berth, such as families and women. It is estimated women will account for 40 per cent of pub goers by the year 2000.

The biggest opportunity, according to Grealey, lies in catering for families as this is the group least represented at present. So Domecq’s extension of its Wacky Warehouse chain suggests it agrees with Grealey’s analysis.

The 18 to 24-year-old market will become relatively less important and is likely to constitute only about a fifth of regular pub goers by the end of the century, according to the Whitbread report. The same sector of the population accounted for roughly 25 per cent in the early Eighties.

However, segmenting the pub-going market into age groups and social types does not find favour with all pub operators.

At Greenalls, the marketing department spurns traditional methods of dividing pub goers. Marketing director Ric Cowan says: “The classic segmentation tools of socio-economic and geodemographic groups misses the point. Occasion is the key driver. The art of marketing and operations is to have the right pubs to address different needs at different times of the day and week. You have to deal with needs in a different way.”

Cowan gives the example of Greenalls’ Square Venues, aimed at the young, but more specifically at the Thursday to Saturday night occasion of heading into the city centre with a group of friends and trailing round a circuit of pubs. In this case, decisions about where to go are made en masse, between eight or nine people.

To become part of this circuit, the venues offer a club environment in a pub setting, with wall-to-wall sweating bodies and video screens all based around a square bar in the middle of the pub.

Greenalls divides its pubs into three divisions: the 18 to 24-year-old concept pubs; outlets specialising in food; and the more traditional type of pubs for socialising over a quiet drink.

Segmenting the market through occasion means pubs cater for different groups throughout the day. In city centres, there are pubs which cater for business lunches at midday, the office crowd after 5.30pm and a younger, “good-time” crowd later at night.

Pub marketing has adopted the language of retail and brand marketing, in a bid to differentiate each chain and increase segmentation. The decision process of funnelling the marketing into above and below-the-line spending is similar to that for retail chains.

Above-the-line advertising at-tempts to encourage people to go into pubs. It also promotes the category, encouraging people to try out pubs as a form of leisure activity, rather than going to the cinema or any other form of entertainment.

Bass Taverns director of marketing John Unwin sees communication as the essential element in differentiating the new breed of concept pubs. But, he says, above-the-line advertising is innappropriate for many of the company’s pub brands, such as the youth-oriented All Bar One. “As brands grow, above-the-line support becomes appropriate, but for niche products, mass-market communication is less appropriate,” he says.

Below-the-line activity is designed to hang onto existing customers and get them to spend more money while they are at the pub. This is an area of growth for pub marketers – and a growing band of them are adopting loyalty tactics more usually associated with retailers than pubs.

At Whitbread Pub Partnerships, the role of marketing is slightly different, since its pubs are all tennanted and any marketing initiative cannot be introduced by dictum, but has to be sold to the licencee.

The company has started experimenting with loyalty schemes. One, run in conjunction with Asda, is aimed at both the over 55s and young affluent pub goers.

Greenalls has introduced a loyalty card called Pub Plus, where consumers build up points to gain added-value benefits. And Bass Taverns is testing out three separate loyalty programmes at present.

Despite the in-roads made by the tightly targeted concept pubs, the local pub is not a thing of the past. As Bass Taverns’ John Unwin says: “There is still a significant role for the local pub – they can satisfy different consumers in different occasions.”

When it comes to pubs there is one person ultimately in charge of marketing – the pub landlord. All the retro furnishings, mock libraries, pub quizzes and chalkboard menus in the world come to nothing without the charm and personality of the landlord.

Maybe this is the reason behind the demise of the British pub – the British landlord is notoriously lacking in charm and many have personalities you would rather forget. Nonetheless, unlike any other field of retail, marketing or sales, the landlord occupies a unique position.

Traditional landlords are under growing pressure and are fast becoming an extinct species. They are being replaced by career apparatchiks with degrees in pub retailing and a knowledge of the latest marketing techniques designed to get drinkers spending more money.

In the new world of concept pub chains, the licensee plays a crucial role, says Greenalls’ Cowan: “The licensee is the key driver in the the young person’s venue, as the young are switched on to service. The role is more and more important in creating the ambience of the outlet – the licensee oversees hiring the right kind of staff.”

The pub operators are capable of extracting value from a few closely targeted groups of consumers, and claim they are increasing the number of people going to pubs.

The effect of this could be to suck trade away from the traditional local pub, making its position even more precarious.

There are similarities here with food retailing, where the modern superstore has served to demolish the independent grocery store base. The difference will be that the new super pubs will be more expensive, rather than less. Whereas the public house once opened its doors and waited for the drinkers to roll in, modern pubs will use all the techniques of modern consumer marketing at their disposal.

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