Thursday, May 17, 2012

A marketing tool that doubles as a scapegoat

 see Article by James Moor in the Independent

Enterprise Inns, more than any other pubco, routinely blames the tenants and the customers, politicians and the weather for their company's increasingly poor performance.

Look at their pubs (look at all tied pubs - 60% of Britain's pubs are tied to buy expensive beer from and pay rent to companies like Enterprise). The ones Enterprise have been selling off to try to write down a crippling debt mountain have been going for an average of £265,000.

Why are they so cheap? It doesn't say much for the quality of their estate does it? It is because these pubs are run down, dilapidated, falling apart and not fit for purpose as 21st century businesses. These pubs are failing NOT because of customers' habits changing and tenants not doing a good enough job et al the usual catalogue of reasons fingering everyone but Enterprise Inns' own part in their demise.
The nation's pubs are a disgrace. It's a slow process of attrition driven by neglect at every level of the Tied Lease business model which Enterprise championed and all other pub company's have slavishly followed... Private Equity understand the model perfectly. It's called 'sweating the assets'.

Customers abandon tied pubs because the buildings suffer from decades of chronic underinvestment, they are years behind contemporary customers' expectations in levels and quality of amenity, product range and service.

And THAT is because the pub company takes far more out of the profits from each pub than the people who run the pubs do - which means the people who run the pubs don't have enough left to invest in training, product development, innovation or renovation of the buildings.

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