Thursday, 14 October 2010

The secret of our success

Wetherspoons are undoubtedly the greatest success story of modern times in the pub trade, all the more so because they have achieved that success in an overall declining market. They have about 1.5% of the total number of pubs in the UK, but because of the average size of their pubs probably account for more like 10% of pub drink sales. While there have been a few attempts to take them on, such as Bass’ Goose chain, none have really amounted to much. Although they offer low prices, that is far from the whole story as to why they have prospered so much. So what is the business model that has led them to enjoy such success?

  • They are very good at identifying sites that will fit the Wetherspoons formula. It’s rare for them to make a mistake. The Edwin Chadwick in Longsight was a rare exception where they seem to have completely misjudged the area, although I could see a Spoons working in the centre of Levenshulme a mile down the road. The success of Tesco is built on astute property management as well as retailing skills.
  • Wetherspoons sites are always ones with a lot of pre-existing footfall – they are primarily targeted at customers who are already in the area, or would be visiting it anyway.
  • By definition then, they are not destination venues. There is seldom much point in visiting a Spoons other than the one closest to you at the time (or maybe one out of a handful in a city centre). This may seem a negative factor, but it is fundamental to the business model. While a few Wetherspoons pubs do have car parks, they would avoid any site where a majority of customers would be expected to travel by car. They wouldn’t open up, for example, in the Rams Head at Disley or the Waggon & Horses at Handforth. In this context, it will be interesting to see what kind of fist Spoons make of some of the new pubs they have acquired in more suburban locations such as the Black Horse in Northfield, Birmingham and the Childwall Fiveways in Liverpool
  • They offer low prices and largely undercut the local competition, although they aren’t necessarily as cheap as often imagined. A perception of good value counts for a lot. If there’s a Spoons nearby, as a customer you have to justify to yourself paying more elsewhere.
  • Their all-day food offer, while obviously more adequate than inspiring, cannot be beaten in their trading locations for range and value. All-day pub food is still rare in town centres.
  • Their pubs are designed to be unintimidating and welcoming to the casual user and occasional pubgoer, hence the shopfront type appearance and open-plan layout. They are deliberately intended to be “unpubby” – I am sure the lack of fixed seating which I personally find offputting is a considered policy.
  • Their drinks range offers something for everyone, from the shot drinker to the real ale buff – nobody can object that “they don’t sell that!” It’s an easy default choice for a group to go to Wetherspoons. They probably have the widest customer age range of any pub chain.
  • Although it’s obviously in their commercial interest to sell cask beer, they also recognise that it is useful to keep CAMRA sweet. If CAMRA started generally condemning the chain it could do a lot of damage.
  • They have constantly varying offers and promotions to maintain customer interest.
  • They offer a consistent formula across all their pubs (with a few minor regional tweaks). This may be condemned as bland and uniform, but you know exactly what to expect, and it makes it much easier for the company to stay in control of what is on offer and maintain standards.
  • They have now achieved a critical mass so that the chain promotes itself through word of mouth – say to someone “there’s a new Spoons opening in Puddlebury” and no further explanation is needed.
  • They have created a subtle differentiation between the Wetherspoons and Lloyds No.1 brands which allows them to widen their potential market in the “night-time economy”, although the two can be indistinguishable in the daytime.
Wetherspoons have now become so big that it would now be effectively impossible for any other operator to mount a direct challenge – they are the “category killer” of the urban pub world. Indeed, Tim Martin openly acknowledges Wal-Mart as a role model. While I’ve said more than once that as a pub connoisseur I’m lukewarm about them (although I do use them) you can’t argue with their success. The same opportunities have been open to others – after all, Wetherspoons started small thirty years ago – but they have failed to take them.

7 comments:

  1. They own the Black Horse? I used to drink there on occasion when I was a student in Brum.

    ReplyDelete
  2. They do, see here.

    Sounds from the comments that it had gone sadly downhill. I too was a student in Birmingham but only went in there once, in its Davenports days.

    ReplyDelete
  3. When an Englishman considers
    a Wetherspoons venue a pub,
    then we might as well all call it a day and reminesce better times





    Adieu

    ReplyDelete
  4. I am yet to have a bad experience in a 'spoons, I fully endorse them as you find them in an environment that is generally bars and clubs where you have no hope of getting a cask ale.

    http://beerdemon.blogspot.com/

    ReplyDelete
  5. No doubt a winning formula, lowest common denominators often are, but just like Asda and Tesco they suck the commecial life out of areas and in effect lessen consumer choice.

    For instance in a neighbouring ward in Nottingham, one of the consequences of their opening has been the demise of a much loved early morning cafe .. I know survival of the fittest and all that ... but still a shame.

    JDW's are the Berni Inns of the moment, consistent throughout the land ... bland and uninspiring, characterless food and drink factories.

    ReplyDelete
  6. A clever businessman is our Tim.

    In some areas though, Spoons have been successful in opening up a market where ale is concerned. If I lived somewhere like Slough I'd be in the town centre Spoons every week.

    ReplyDelete
  7. Martin, Cambridge16 October 2010 at 21:54

    As you note, a 'Spoons is a good default choice for a group (and as easy a place to find post-shopping as Woolies used to be). The family group is a particular example, and I can't think of many other pub chains I'd suffer with a family (M&B's Vintage pubs aren't bad).

    As also highlighted, quality is very consistent, which is in part why CAMRA branches make awards.

    ReplyDelete

Comments, especially on older posts, may be subject to prior approval. Bear with me – I may be in the pub.

Please be polite and remember to play the ball, not the man.

Any offensive or blatantly off-topic comments will be deleted.

See this post for some thoughts on my approach to blog comments.