Try the new FT.com

November 28, 2011 3:55 pm

Wetherspoon focus shifts to small towns

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Landlord Michael Moyle became worried soon after he took over the Tywarnhayle pub in Perranporth, a resort town on an idyllic stretch of the Cornish coast, in late 2010. A week later a Wetherspoon’s pub, the Green Parrot, opened practically next door, its car park visible from the back.

“I was a little bit anxious … we have lost a certain amount of holiday trade,” says Mr Moyle.

wetherspoon

wetherspoon

JD Wetherspoon’s pubs and their swirly carpets are set to expand further as the company targets 50 openings per year, from urban centres to places like Perranporth and market towns such as Witney in prime minister David Cameron’s West Oxfordshire constituency.

Wetherspoon spread across the country has brought comparisons with another high street stalwart – and worries about the collateral damage it can bring in its wake.

“JD Wetherspoon is the Tesco of the pub industry,” says Paul Hickman, a leisure analyst at Peel Hunt. “A few years ago it was the Aldi of the sector – but now they’re increasingly about providing brand certainty to a wide range of customers, and not just value for money. As a result Wetherspoon’s is finding its concept works in smaller towns, and more rural ones as well.”

Out of Wetherspoon’s 850 UK pubs, two-thirds are in conurbations, with 150 in London alone. However, in the past year it has increasingly focused on pubs in towns with populations of 10,000-20,000, such as Bedlington (population 15,400), Broadstone (10,256), Hawick (14,801) Inverurie (10,885) and Perranporth, whose 3,066 population is swollen by the holiday trade.

Eddie Gershon, a Wetherspoon spokesperson, says that with city centres and suburbs becoming increasingly saturated, the small town approach is likely to accelerate. “It’s not so much a strategy as business as usual.”

Many local pubs find it hard to compete. “It is extremely difficult for independent or tenanted pubs to match Wetherspoon’s all-round value,” says Douglas Jack, an analyst at Numis. “It is all about scale – they have small margins which they make up for on volumes, which is why they have pretty big barn pubs.”

Pub closures in the UK – which ran at an average of 14 per week in the first six months of 2011 – are caused by a myriad of social and economic reasons, but there is anecdotal evidence Wetherspoon can be a factor.

Rival brings in more custom

It is darts practice night at the Royal George in Todmorden and the team are almost the only customers, Andrew Bounds reports.

Landlord Damien Mulheran breaks off from his game, sups a pint of lager and muses over the impact of the opening of a nearby Wetherspoon pub in this Pennine town of 15,000.

With three pubs closing in the last two years, many feared more would follow when the giant chain refurbished the closed White Hart hotel by the train station.

But it has not worked out like that, he says. “If anything they bring people in. You get people from Burnley and Halifax going there for a meal then coming here for a couple of pints.”

Mr Mulheran himself took over the George after Wetherspoon’s arrived. With bitter at £2 a pint – a typical price in Tod – most of his turnover comes on Friday and Saturday nights when drinkers turn to spirits.

“I am not in this job for the money. I am in it because I love it,” he says.

“If you’re a pub in a small town with a low turnover, depend on a handful of punters who have one or two drinks on a weeknight and a Wetherspoon’s opens, you’re in real trouble,” says Rick Muir, associate director at the Institute for Public Policy and the author of a report on pubs and communities. “As the price of alcohol in pubs is going up, Wetherspoon’s offer something to lower-income consumers and they can compete at a price level the leased-pub sector especially find difficult.”

Steve Powell runs the Globe pub in Hackney. Situated next to the Trelawney council estate, a few shops down from ‘The Yuppie Barber’, it’s at the crossroads of gritty and gentrified east London. Round the corner is Baxter’s Court, a cavernous Wetherspoon’s pub opened in 2003. It’s the reason Mr Powell refers to himself as “a survivor”.

“When I opened up in 1988 there were 38 pubs within walking distance; now there are about eight,” he says. “[The closures] accelerated when Wetherspoon’s opened up, it’s killed our daytime trade and many pubs just gave up.”

In response Mr Powell introduced themed music nights five times a week, including a Jazz Sunday which proved popular with the area’s growing population of young professionals. The Globe also applied for a late licence in order to capitalise on after-hours drinking when Wetherspoon’s outlet closes.

“You can’t compete with them on price so you need to look for other things – for us that means much longer hours, for less money, just to stay open,” says Mr Powell.

Iain Loe, research manager at the Campaign for Real Ale (CAMRA), believes Wetherspoon’s expansion forces other pubs to raise their standards.

“The same thing applies to a big supermarket coming into a small town … it’s a threat and an opportunity,” says Mr Loe. “Many of the pubs being knocked out are backstreet boozers, the type of place you can watch Coronation St, [but] at the same time people are looking for more individuality, so you can compete on other things.”

Despite the downturn in consumer spending Wetherspoon’s growth shows no sign of abating. In its full year 2011 results, the company’s revenue topped £1bn for the first time. Tim Martin, Wetherspoon’s chief executive and founder, says he has plans for a total 1,600 pubs in the UK, revised up from 1,500 pubs in April.

But back at the Tywarnhayle pub Mr Moyle remains cautiously optimistic – particularly when it comes to dog-walkers.

“Wetherspoon’s don’t allow dogs; with the golden beach that’s why a lot of people come down this way,” he said. “They offer cheap drink – but we’re very much a locals’ pub.”

This graphic shows new Wetherspoons pubs opened from July 2010 to date

Related Topics

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE