Peach Report

Wetherspoon turns focus to smaller towns

5 December, 2011

J D Wetherspoon is targeting small towns across the UK for the next phase of its growth, notes the Financial Times in a profile of the pub group.

Wetherspoon’s is currently working on a target of around 50 new openings a year, with many coming in towns smaller than it is commonly used to, like Bedlington, Perranporth and Witney. Two thirds of its 850 pubs are in conurbations, but it has sharpened its focus on smaller catchment areas over the last year.

Paul Hickman, leisure analyst at Peel Hunt, sees comparisons in the supermarket sector. “J D Wetherspoon is the Tesco of the pub industry. A few years ago it was the Aldi of the sector—but now they’re increasingly about providing brand certainty to a wide range of customers, and not just value for money. As a result Wetherspoon’s is finding its concept works in smaller towns, and more rural ones as well.”

Douglas Jack of Numis adds that Wetherspoon’s formula is hard for rival pubs to compete with. “It is extremely difficult for independent or tenanted pubs to match Wetherspoon’s all-round value. It is all about scale—they have small margins which they make up for on volumes, which is why they have pretty big barn pubs.”

Some publicans complain that the battle with Wetherspoon’s is an unfair one—but Iain Loe, research manager at the Campaign for Real Ale, says it forces everyone to raise their standards. “The same thing applies to a big supermarket coming into a small town—it’s a threat and an opportunity. Many of the pubs being knocked out are backstreet boozers, the type of place you can watch Coronation Street, but at the same time people are looking for more individuality, so you can compete on other things.”
For the full story, see Wetherspoon’s focus shifts to small towns