Specialist
Former C-level executive at Punch Taverns Ltd
Agenda
- Coronavirus impact on demand, supply and profitability
- Competitive landscape and market dynamics
- Potential reopening strategies for the industry
- 2020 outlook and potential structural industry changes
Questions
1.
Could you begin by outlining any notable cyclical trends and context for the UK pub industry before the coronavirus pandemic?
2.
How would you characterise the margin impact of the pre-coronavirus trends you identified, including premiumisation in the wet section as well as strong breakfast offerings?
3.
Have the pub shutdowns equated to a total loss of revenue for pubs since the lockdown began? There have been a few doing selected food operations, as well as takeaway services – how would you quantify the coronavirus-related loss of revenue?
4.
The first three trading months of the year are typically lower-volume and lower-revenue, but now that the impact has continued into spring and summer, would you say the Q1 and Q2 impact represents a more significant loss?
5.
How lenient would you expect landlords to be in deferring rental payments?
6.
Could you break down the key fixed costs for pubs, both leased and tenanted as well as managed? We mentioned rent and utilities – what about labour costs? Would they be higher for managed than for leased and tenanted?
7.
How significantly would pubs have been affected by the coronavirus impacts on the supply base, such as write-off of stock? Would that be more of an effect for managed or for leased and tenanted?
8.
How much insurance could pubs claim on the lost revenue, and would the hoarding stock mean they can save insurance?
9.
What would you say are the CAPEX implications of the lockdown? Would pubs have been able to halt all large CAPEX and perhaps carried on with maintenance CAPEX to a lesser extent?
10.
You mentioned Wetherspoons’ spend of GBP 10,000 per pub to install safety provisions in place for reopening. Could you share a sense of what those opening costs represent as a percentage of total revenue over the year?
11.
How significant is the government guidelines on social distancing changing from 2 metres to 1 metre? How does this change pubs’ utilisation of capacity?
12.
What approximate percentage of occupancy do pubs need for breakeven operations?
13.
Are there any differences in managed vs leased and tenanted operations when approaching the costs to cover utilisation?
14.
Do you think this recovery is going to be wet-led rather than dry-led with pubs potentially shortening their menus?
15.
Would you expect any difference in recovery across urban vs rural areas?
16.
To what extent would you expect demand impacts from the working from home situation and the potential for workers to return to the city?
17.
We alluded to a few tailwinds for the pub industry, with the live sports returning, the hot weather and the government guideline reduction to 1 metre. How would you form an outlook for the UK pub industry over the next 6-18 months, anticipating a likely increase in unemployment and potential recessionary environment?
18.
How do you expect the top line to perform over the next 18 months? Do you think it can beat inflation?
19.
We established that companies with a strong balance sheet are more likely to emerge in better shape – how does that relate to the managed vs leased and tenanted operating models? Are any pubs gravitating towards one model rather than the other? Has this pandemic changed the approach?
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