Plans, pints and passing the job on to a successor – Everards MD
BREWERY AND PUB CHAIN BOSS REFLECTS ON THE BUDGET AND HIS OWN RETIREMENT
THE boss of Everards Brewery says the business is pushing on with plans for a 120-room hotel, and is in talks to find a potential operator.
The brewing and pubs business wants to build the hotel next to its HQ and brewery on the Everards Meadows site, next to Fosse Park.
It also hopes to add eight office blocks there, providing 100,000 sq ft of space.
Managing director Stephen Gould described how the pub estate was managing the cost of living crisis and rising inflation.
He also spoke about how the business was preparing for his eventual retirement and gave his thoughts on plans to cut the tax burden on pub beer and cider sales laid out in the Spring Budget.
Mr Gould said outline consent for the hotel – which might cost between £15 and £20 million – and offices were agreed in September, and things had progressed well since.
He said: “We’re talking with hotel companies at the moment which have expressed an interest in a hotel which is very encouraging.
“I would hope to be in a position where we are able to share that we’re working with a particular company by the summer.
“Once we agree terms with an operator we would then present that opportunity to the market to see which contractor or contractors want to work with us.
“That would probably take another six months because we’d need to secure detailed planning consent.
“With the office campus we see that employers certainly still want offices for their staff but they want them in certain locations with certain facilities around them.
“We have a feeling that if we secure a hotel deal that, plus everything else that’s there, it will create a very appealing place to work.
“Once the hotel is finalised we’ll move on to the office campus in terms of presenting that opportunity more formally to employers that might wish to come here. That mixed-use development should make the whole area sustainable.”
He said Everards Meadows has proved a huge success for the brewery, Jenno’s coffee shop and Rutland Cycling, which is now owned by Specialized. Feedback from customers and the public, he said, had been positive.
“What’s also worked well is that Everards Meadows has very much complimented the excellent development at Fosse Park,” Mr Gould said.
“Together they have created, I think, a strong and sustainable piece of place-making.”
The business relocated to Everards Meadows in 2019. The site includes 70 acres of public green space alongside the River Soar.
Everards sold its previous home across the road to Fosse Park, which it has redeveloped to include Next, Flannels, TK Maxx, Nike and Clarks shoes shops.
Today, Everards has 154 pubs and, despite the gruelling economic climate, has seen no recent closures, with five looking for new management as owners work through their notice periods.
The coming months will be critical for small businesses such as pubs, with interest rates up from 4 per cent to 4.25 per cent and a surprise jump in inflation in February to 10.4 per cent.
Food and non-alcoholic drink prices were up 18.2 per cent, the highest pace in over 45 years.
Mr Gould broadly welcomed changes to pub duty rates which, from August, will make duty on a pint of draught beer or cider up to 11p less than for cans or bottles bought in a supermarket.
Because it will coincide with an inflationary rise in alcohol taxes, the result will be no change in the duty paid on a typical pint poured in a pub.
He said: “It’s a real, positive acknowledgement of the role pubs play in society and also an appreciation that pubs are the home of responsible drinking.
“That comes through in the draft beer discount, which effectively means that while alcohol duty outside of the pub will increase by about 10 per cent from August, for draught beer in the pub duty rates will remain where they are now.
“Effectively it’s a 10 per cent discount on what the new duty rates will be outside of pubs.
“That differential has never been there before.
“I think pubs, like a lot of businesses, have been finding the inflationary environment challenging and this policy announcement is a contribution to managing that.
“In the medium to long-term, it gives a very clear message that the pub is central to communities.
“Our pub owners are running small to medium-sized businesses, so significant inflation on utilities, supply chain costs like food, and minimum wage increases all take a lot of navigation, and there’s only so much inflation that you can afford to absorb.
“Some of the inflation is passed on in increased prices for customers, but it’s a fine balance because what you don’t want to do is create an environment where, all of a sudden, it’s no longer value for money to visit the pub.
“I think our business owners have done a brilliant job over the last year, managing that careful balance between inflation and value.
“Our vacancy levels are low compared to the size of the estate.
“That kind of serenity belies an awful amount of work going on to ensure the pub is a place where people want to go.”
He said the typical cost of a pint of Everards Tiger was now about £4.20, and the brewery had kept the increase in the sale price of a pint to its licensees at 4.3 per cent.
He said: “If we put in an increase that’s too high then that affects business owners’ confidence and results in customers having to pay too much for their pint.
“Inevitably it’s going to affect our bottom line. Like our business owners we have experienced significant inflation and we’ve had to – responsibly, I think – absorb some of it, but then we’ve passed some of it on.
“That is something a lot of companies have had to do of all sizes.
“That needs a lot of careful thought, because it’s too easy to be too aggressive and pass all your inflation on, which upsets the business in the medium to long-term.”
Mr Gould, 55, has been on the Everards board for 20 years and its MD for the last 18.
Earlier this month, brewery chairman Julian Everard shared a note with staff outlining how they would soon start looking for a replacement for Mr Gould, who plans to retire within the next couple of years – although he will stay on the board as a non-executive director.
Mr Everard said: “Once we have appointed someone, which is likely to be early next year, Stephen will work alongside the successful applicant by leading together as joint managing directors, with Stephen easing away from the role once the new person has settled in.
“All in all, a plan for what I hope will be a smooth succession and continuity.”
Our business owners have done a brilliant job managing that careful balance between inflation and value