Monday, August 05, 2013

Tied Rents ARE higher than Free of Tie. PLUS the gross profit margins are a fit up.

Post from Robert Sayles on the Facebook publican forum Licensees Supporting Licensees:

"Piece in the PMA (1) today about ALMR (2) survey on rents. States that GPM (3) on wet sales in tied pubs is 61.7%. Doesn't seem to equate with what many ties publicans are saying?"

1) Publican's Morning advertiser (trade rag)
2) Association of Licensed Multiple Operators
3) gross profit margin

There is a clue in the name of the organisation: Association of Licensed MULTIPLE Retailers

These people stay in business (just) because they have VOLUME between their multiples of pubs and their pubco freeholders sell them beer at relatively large discounts. That's why they are able to stay in business (just enough for the bosses to make a good enough living but for them not to expand into other areas or to pay their staff properly) and why they don't as a rule get up and shout that the tie doesn't work.

Like everyone else involved with pubco's and the tie, they are small rodents clinging onto a fast spinning wheel trying desperately not to be flung off.

They might go to the dinners and send their kids to private schools and drive smooth cars but their balls are in Tuppen's pockets as much as anyone's.

You don't hear them get up and say, as Ted Tuppen repeatedly, perennially says they will;

'We are happy with the tie'

But they do NOT say this in public beecause no matter how many hundreds of times Tuppen says they ARE HAPPY the simple fact is they aren't.  They are all compromised.  They are all stuck.  These are FACTS that NEVER get out and are never verifiable because it takes one of them to break ranks and none will/

The same goes for Family Brewers, even the ones who can be trusted not to shaft lessees with exhorbitant third party product supply prices as the pubco's and the shark lowlife scumbag spiv Fams do.

If a Family Brewer broke ranks Guess Whose Beers Would NOT Be Coming Home For Tea on the Enterprise Express?

Here is the text of the PMA article copied, without being reformatted, in full:

Tied rents (blue) remain higher than free­of­tie
rents for second year
Rents remain higher as a proportion of turnover among tied pubs than free­of­tie pubs,
according to this year’s Benchmarking Report from the Association of Licensed Multiple
Retailers (ALMR).
Although rent is now at its lowest proportion of turnover for
the past 5 years, and is falling across all pub market
segments, there remains a differential of 1.7 percentage
points between tied and free­of­tie pubs.
Among tied pubs, rent averages 10.7% of turnover, which
is down from 12.3% in 2012, but still higher than the 2010
figure of 9.4%. Among free­of­tie leased pubs, rent
averages 9.0% of turnover, which is down from 10.7% in
Kate Nicholls, ALMR strategic affairs director, said: “Whilst
community local operators have seen a resurgence, those operating under tied leases in
particular continue to struggle – reporting below average capex, margins and growth. For the
second time, tied rents as a percentage of turnover were higher than rents for free of tie and
commercial leases.
For leasehold pubs as a whole the average rent is 10% of turnover, though the ALMR notes this
figure is slightly skewed by the increasing number of peppercorn entry rent deals, without which
the figure would be closer to 12%.
The report also shows that gross margins on wet sales in tied pubs average 61.7%, compared to
66.2% among pubs on free­of­tie leased pubs. Gross margin on food sales in tied pubs average
58.5%, compared with 61.8% in free­of­tie leased pubs.
The ALMR’s Benchmarking Report 2013 survey covered 36 companies operating 2,100 outlets –
with all data reported at outlet level. The majority of respondents are small companies – 83%
operate fewer than 50 outlets and two­thirds fewer than 20 outlets.
There is a roughly even split between leasehold (53%) and freehold (47%) premises; of the
leasehold premises, 56% are with pubcos or brewers, and just 1% of these are free­of­tie (down
from 6% two years ago).

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