Pubs group braced for ‘a year like no other’ as takings nosedive

PUBLISHED: 16:46 10 July 2020 | UPDATED: 17:26 10 July 2020

The Swan, Adnams, Southwold. PICTURE: Jamie Honeywood

The Swan, Adnams, Southwold. PICTURE: Jamie Honeywood

Jamie Honeywood Archant Norwich Norfolk

A pub group says it expects its managed estate to take a 40% dive in takings because of new social distancing rules.

Adnams expects a big dip in its pubs' turnovers because of restrictions on numbers   Picture: SARAH GROVESAdnams expects a big dip in its pubs' turnovers because of restrictions on numbers Picture: SARAH GROVES

Southwold-based Adnams has reopened five of its eight managed pubs as it slowly eases out of lockdown, with all of its 250-strong pubs workforce being brought back under the government’s flexi-furlough scheme.

Properties director Nick Attfield felt those pubs opening had got off to a “cracking” start – but with fewer tables and places available this would have a considerable impact on turnover.

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And even staff at those pubs not open now we are being brought back for training, he said.

“At the moment we have only had a couple of people (lost) through natural wastage and we have brought everyone back. While flexi furlough continues we don’t have to make those difficult decisions. By the end of October (when the flexible furlough scheme ends) we’ll have a good indication of how our businesses are doing.”

Adnams' The Bell in Walberswick  Picture: WWW.JAMES BEDFORD.COMAdnams' The Bell in Walberswick Picture: WWW.JAMES BEDFORD.COM

The pubs business would normally take on 30 or 40 or so students during the summer because of the seasonal nature of its trading, but this year it won’t.

Restructuring down the line would not be an easy option, as each pub needs certain key roles within it in order to run, said Mr Attfield, but he is expecting a financial hit.

“We are certainly down and what’s interesting is our occupancies for July and August are pretty much as they were last year,” he said.

“Where we are taking a big hit is our capacity to do food and drink is so diminished.

Nick Attfield, director of properties at Adnams, said he is hopeful pubs will be enjoyable while remaining safe  Picture: JAMES BEDFORD/ADNAMSNick Attfield, director of properties at Adnams, said he is hopeful pubs will be enjoyable while remaining safe Picture: JAMES BEDFORD/ADNAMS

“The Bell at Walberswick would be doing 500 plus covers a day and we are now putting our capacity down to 150. There’s nothing we can do about that while we have social distancing.

“We can’t physically contain them (the customers) and my strategy is to flatten the curve of demand and essentially run a small pub in a big building.”

In order to try to spread demand, the pub group has introduced all-day dining at pubs where it has never been done before, he explained.

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But without the furlough scheme, such an approach would be financially unsustainable. Other government measures such as the suspension of business rates had also been “significantly helpful”.

“We have had to raise prices just a little bit, and I think people have been understanding of that.”

Because of the pubs’ locations, they are heavily seasonal, and therefore took a significant hit from being closed during peak holiday periods.

“We know in the winter we operate at significant losses but we make lots of money in the summer,” he said.

The hope is to make it through to next year by getting through winter with the hope of rebuilding from Easter 2021. “I love planning and I love numbers, but there’s a huge element of hope because we don’t know what the future would hold,” he said. “We need to keep our assets trading and making some money.”

The family-owned pubs, brewing and retail group is also supporting its 37 tenanted pubs with their transition out of lockdown, with 90% of those already open. Tenants were “nervous and cautious”, but keen to get trading again, he said, and he was holding regular Zoom meetings with them help get them back on their feet. He was “chuffed” that so many were reopening when just 50% expressed willingness to do so when the government first announced the easing of restrictions.

The five Adnams managed pubs already opened are The Bell in Walberswick, The Five Bells in Wrentham, The Plough in Wangford, The Swan Hotel in Southwold and The White Horse in Blakeney.

The Cross Keys, Aldeburgh, and The Crown Hotel, The Harbour, and the Brewery and Distillery Tours in Southwold will open their doors in August.

Among the tenanted pubs, The Crown in Snape will reopen once Adnams appoint new tenants following the planned pre-coronavirus departure of its current tenants.

Tenanted premises to come out of lockdown include the Butt & Oyster at Pin Mill, The Castle in Cambridge, The Cherry Tree in Woodbridge and the Ferry Inn in Stokesby.

“It’ll be a year like no other,” said Mr Attfield. The aim at this stage is just to break even and hope. The company has already attracted praise for agreeing to slash its tenants’ rents to help them through too. “I have to take a long term view,” said Mr Attfield.

In an average year – which for Adnams runs from January to December – the managed properties division would make about £10m of which about 10% or £1m would be profit. This year will be very different. “If I make a £1m loss I would be happy,” he said.

He was “sad” but understanding that there can’t be the same lively jostling at the bar that customers are used to under current restrictions, but it was “a damn good start” that pubs had been allowed to trade.

“Publicans are a resourceful lot,” he said. “We have got something back and it’s a good enough start and we have proved we can do it.”

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