Café Rouge founder finds new pub theme

Karen Jones, of Café Rouge fame, has big plans for the Bar Room Bar chain. But have themed pubs reached saturation point?

Does the UK need another chain of branded pubs? Karen Jones, co-founder of French restaurant bar chain Café Rouge, certainly thinks so. Others disagree.

The Yorkshire-born entrepreneur last week revealed she has “big plans” for the tiny Bar Room Bar pub chain she bought from Punch Taverns earlier this year (MW September 2). But she is keeping the details under wraps, including whether the chain will be renamed.

Jones plans to launch the chain nationally, just as she did with Café Rouge – in partnership with Roger Myers – a decade ago.

She is entering a highly competitive market. There are about 400 themed, “branded” chains, with about 8,000 outlets, in the UK.

The amount of money spent in pubs has fallen by two per cent since 1993, in a period when the economy has grown by between one and three per cent. The number of pubs is also declining, from 81,000 to 76,000 over the same period. However, the turnover of individual pubs has increased.

For big brewers unwilling to compete on price, branding pubs has been a way to maintain profits and attract more female customers.

Brands such as Bass’ All Bar One, which is about to open its 40th outlet after a 30 per cent increase in turnover last year, and Scottish & Newcastle’s Rat & Parrot chain, have been high earners.

But the tide could be turning.

Several big name brands have reached saturation point after years of launches. The 180-strong Firkin chain, owned until last month by Allied Domecq, has seen a fall in turnover, and the majority of its outlets are about to be swallowed up by Bass and rebranded.

Meanwhile, Wolverhampton & Dudley is reviewing the 25 Pitcher & Piano café bars it bought from Marston’s last summer.

A recent report by investment advisers Morgan Stanley Dean Witter warns that the public is turning against heavily branded pubs: “There is a fine line, in branding a retail outlet, between adding value, through signalling a quality standard the consumer recognises, and destroying value, by becoming mass-market in a way that alienates the customer.”

Some analysts even argue that it is not possible to brand a pub in any recognisable way. They claim difference between “brands” is not great enough to build loyalty, and that concepts are too easily copied.

Stuart Price, an analyst at Credit Suisse/First Boston, believes the life-span of a pub concept is just three years, before it is crowded out of the market by imitators. He says: “With the odd exception, I don’t think people are able to distinguish what is on offer. I don’t think the chains are as sharply defined as they need to be. The danger is that you get companies which leap in with ‘me-too’ houses. They see a movement and they quickly try to copy it.”

Price says there are a number of companies which could easily launch chains to compete with Jones’. Bass could do it with All Bar One, as could independent chain Slug & Lettuce, which he believes could easily respond to a new food concept.

Pub retailing’s most recent success story, the Punch Taverns chain, has been built around non-themed tenanted houses. Punch development director and Jones’ former partner at Pelican, Myers, once said: “You can’t impose themes on a pub; branding is a fiction. You don’t go into a pub because it is a Firkin or a Big Steak – you go in because it is a nice pub.”

Despite these worries, Bar Room Bar is forging ahead. It is leasing two of its three premises from Punch and working with the company to search for other venues. In line with current thinking, it is a “soft” brand, avoiding the backlash against heavily branded, identikit town centre pubs that analysts say have had their day.

Jones has no plans to launch an assault on the already fiercely competitive drinking circuit, where several venues vie for drinkers’ attention. The three existing bars are “female-friendly”, local venues where drinkers can enjoy a pizza and live entertainment, without travelling into town. They are located in Hampstead, Kennington and Battersea.

Jones says: “We are not looking to put them in city centres. They will be where people live, not where they work, although I would love to put one in the City of London.

“It is not an overall concept, they are just great local bars. We allow our managers quite a lot of entrepreneurial freedom.

“It is going to be big, but it is too early to say how big. The growth will be as rapid as we can find the sites.”

One industry insider says: “If it is done well and she invests quite significant amounts in each unit, ensuring that the service standards are high, then she should succeed.”

Jones will need a heavy dose of Yorkshire grit and a new approach to pub branding to repeat the success of Café Rouge.

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