Pubcos vs Reality

nobody@flickr.com (The Sun and Doves) — Sat, 30 Jan 2010 16:24:04 -0800

This Group is for gathering simple trading information about The George Canning Pub in Camberwell, London SE5 to prove a point:

Pubcos say they operate pubs. They do not:.

Individual lessees who run their own business in the pubs they rent from the pubcos are the ones who operate pubco pubs. Pubcos take the rent, and increase it aggressively at every opportunity, and take the lion's share of the profit on the beer and other products they sell to their lessees at extortionate rates without ever brewing or handling those products themselves.

Unsustainable pubco business practices are causing the financial collapse of pubs across the UK. The wave of closures no one can possibly have missed in every hamlet, village, town and city exceeds unprecedented numbers. This reality is leaving a lasting legacy in our communities from Land's End to John O'Groat's and a deep scar is being cut into British society.

Pubs and their traditional point as a focus and hub of community life are closing forever, never to return, contributing to alienation and lack of facility everywhere.

Pubcos' rapacious taste for taking all the profit from every pub is fuelled by their huge indebtedness to banks and bondholders. The systematic removal of profit from their estates has led to years of chronic underinvestment in the pub stock of the UK because the operators cannot afford to maintain 'their' properties - which leads to financially fragile businesses operating out of run down and dilapidated buildings.

Unable to compete in economy of scale with competition from managed pub estates, pressures of necessarily high tied retail prices encourages customers to visit less often and other pressures on trade lead to pubs failing because they have no reserves to get them through lean times.

The George Canning is an excellent example of a viable pub having been run into the ground and closed through the unsustainable business practices of its pubco freeholder.

The last lessee was there for around seven years. It, like all businesses do, needed regular investment to keep it fresh and busy, it had none, because it did not make enough profit. Once the lessees' business failed the freeholder was left with yet another shut pub on its books.

They took it on themselves to reopen the pub after a refurbishment costing around £140K. Since, as pointed out above, pubcos do not 'operaten' pubs, the Canning was reopened for the freeholder by a management company - they are paid to trade pubs while being marketed with a new lease.

With a complete redecoration, new furniture, kitchen and bar equipment, awnings and exterior lighting, the pub now looks a lot less tired than it did and in principle provides a much greater level of comfort and amenity for customers than it did. But what hey! It's a LOT quieter now than it was when it failed.

Why is this?

The new Canning is bland, dull and lifeless. It has no individuality. It was rehashed to prove a point: that the pubco knows what it is doing. The rather awkward problem, as evidenced by the Canning, is that when it comes to OPERATING pubs, pubcos are clueless and useless. They don't know the first thing about authenticity, individuality, character and the commitment it takes to make a pub a thriving centre of local attention.

The George Canning SE5 Observeration Group

Pubcos vs Reality