According to recent reports, supermarkets now supply as much as 70% of alcohol sales in the UK – much of it heavily discounted – giving rise to well-publicised arguments about the social consequences. Less arguable is the impact that supermarket sales have had on pubs.
H&C News here presents the views and strategy of The Head of Steam and its Managing Director, Tony Brookes, who believes that supermarkets are the biggest threat to the survival and prosperity of the British pub:
“It is very clear that pub operators have to tackle the threat to their trade from home drinking, via supermarkets, very seriously and need to develop a series of offers which keep their customers coming through their own doors and away from the supermarkets. Landlords and staff need to show their customers – whether regulars or occasional visitors – that they are loved and valued, and that the pub wants their trade.”
Not all readers will agree with or be able to implement every part of what Tony outlines below, but H&C News firmly believes that there are useful lessons – and practices – here that should be considered and applied by many – perhaps most – pubs.
The ‘Stuff the Supermarkets’ campaign
The Head Of Steam Ltd operates nine pubs and has its origins back in 1980, when, as ‘Legendary Yorkshire Heroes’, it developed a chain of real ale off licences in the north east. It’s ironic, therefore, that the company should now be so anti-supermarkets and drinking at home. But times change, and in those days, most people drank alcohol in pubs, not at home.
Our company is now devoted to promoting the pub as a place to have entertainment rather than the home, and many will know that we have had an on-going campaign to encourage that – called ‘STUFF THE SUPERMARKETS’ – and have tried to encourage other pub operators nation-wide to follow suit.
The truth is: the pub trade is at war with the off-trade and the supermarkets particularly. The lead up to Christmas sees the major battle and our company is determined to get as much drinks trade away from the supermarkets and into its own pubs as possible.
Have fun, don’t be glum!
The pub trade needs people to come to the pub for their entertainment; our company has produced a nice generic poster to give customers a merry, jokey jolt to remember where it’s BEST to be if you wanna have fun….. and a clue is, not at home. Pubs are welcome to print it out and use and media are welcome to publicise it.
Take home brochure and gift packs
The Head Of Steam is making a super-human effort in this period leading up to Christmas to get as much as possible of its customers’ take home drinks trade for itself, thereby cutting the amount of purchases from supermarkets. The company is focusing on elements of the trade that supermarkets can’t compete with. It is incentivising its staff by paying them a bonus for sales made for taking home.
Closing the gap in price
One of the big problems pubs increasingly face is the gap in price between equivalent drinks bought in the supermarket and the pub (where costs per drink are massively higher than in a supermarket). Pubs need to make its customers offers which close that gap, with quality products, trading on the fact that their customers love them more than they love the supermarket.
Pubs need to recognise that off-sale prices have to be on much lower margins than can be enjoyed on drinks bought for consumption in the pub, and this is often a mental stumbling block for pub operators. Our company doesn’t have that block, given its off licence background.
Discounted prices – but only in bulk
So – our company’s take home offer includes a range of the most popular real ales at heavily discounted prices – but only in bulk, aimed at the party trade – 18, 36 and 72 pint containers, with a small discount for take out volumes of a gallon. Discounts are also available on draught and packaged ciders, imported and British bottled beers and lagers, and cases of wines.
Look at what supermarkets CAN’T do
“Pubs need to look at what supermarkets CAN’T do” said Tony Brookes, Managing Director of The Head Of Steam Ltd. ”For example, they can’t sell real ale or cask ciders. They also can’t sell some of our pubs’ most popular bottled beers, like Sam Smiths of Tadcaster – because Sam Smiths – like quite a few breweries – refuse to supply supermarkets. So if you like Sam Smiths beers, you can buy them from our pubs.
“We intend to attack the supermarkets head on – it’s up to us to encourage our devoted customers to support their local pub rather than the ubiquitous supermarket. But they’ll only do that if the price is right and can clearly be seen to be vaguely comparable to supermarket prices, for equivalent products.”
Another feature of the take home offer will be a range of imported and British bottled beers and lagers in presentation gift packs, with, for example, two bottles and a branded glass (see take home brochure attached). Brookes says:
“We are giving our customers the chance to get all their Christmas presents from our pubs, if they wish. The presentation gift packs are very reasonably priced, but we also have t-shirts and other items which would make excellent presents.”
… and customers can have a beer festival in their own home…
The Head Of Steam’s customers are being encouraged to do something that appears to be new: customers have always been able to buy real ales and ciders to take home in 2, 4 or 8 pint containers, as well as larger container sizes. Customers having a party, rather than having a large container of a beer, can instead have a whole range of ales and ciders in small quantities of each, where a pub offers a reasonable range.
“What a great offer for a guest at a Christmas (or birthday or any other sort of) party – to be faced with a veritable beer festival of choice, rather than a boring can of Fosters, which is all many parties offer. We’re not into one-upmanship in our company, but we know how to provide our customers with the wherewithal to have THE BEST party around.”
…and if you want your celebration to be really Scottish…
The Head Of Steam pubs are offering mixed cases of unusual but delicious Scottish beers – heather, gooseberry & wheat, elderberry and Scots pine – from Williams Brothers of Alloa. Gift packs will be available for Christmas and New Year (and Burns Night) presents, and you can’t get more authentic than this for celebrating the new year in (Scottish) style.
Special Promotions not found in the supermarket
Again, The Head Of Steam pubs are working with Titanic Brewery of Stoke to offer free presentation packs of their Plum Porter bottles and glass, by having a collector card stamped when they buy Titanic’s Plum Porter, Chocolate & Vanilla Stout and Cappuccino Stout (see poster and pack).
“This promotion again gives back to our customers. These lovely rich, dark winter drinks burst with flavour – but you’ll only find the deal in our pubs, not in the local supermarket,”
To further attract, the prize packs will have discount drinks vouchers for use in the company’s pubs during the dark months of January and February:
“Anything we can do to help make our customers’ lives happier in the winter months, we’ll do it.”
Give customers what they want – worldwide choice
One booming part of the licensed trade is that of quality world and British bottled beers. Many customers are coming to the pub less frequently, but when they do, they are often experimenting with rare and high-value beers.
So most of The Head Of Steam pubs have had new big bottle chillers installed to be able to offer literally hundreds of different bottled beers. The Head Of Steam in Newcastle has even converted a back room to become a World Beers Bar!
“It is noticeable, having studied their drinks stocking policy over recent years, that supermarkets are stocking an increasingly huge range of imported and British bottled beers and lagers – many at very low prices. Even if they can’t compete on price, pub operators should realise they have to at least offer a similar great choice – because that’s what their customers want. If they don’t, their customers can get what they want from the supermarkets.”
Get prices down and fight the supermarkets
One secret of fighting supermarkets is to offer really good value for money wherever possible. Most of The Head Of Steam pubs now offer draught 2.8% ABV bitter – Hop Back Heracles (branded ‘Northern Pacer’) or Caledonian 2.8 (branded ‘Scottish Pacer’) – and lager (Sam Smiths ‘Alpine’) – both delicious and strong in flavour but lower in strength.
Selling the lower strength beers and lager at just £1.95 a pint makes them price-competitive with many supermarket offers and cuts the price gap between pub and supermarket.
For more information click here