Wetherspoons are undoubtedly the greatest success story of modern times in the pub trade, all the more so because they have achieved that success in an overall declining market. They have about 1.5% of the total number of pubs in the UK, but because of the average size of their pubs probably account for more like 10% of pub drink sales. While there have been a few attempts to take them on, such as Bass’ Goose chain, none have really amounted to much. Although they offer low prices, that is far from the whole story as to why they have prospered so much. So what is the business model that has led them to enjoy such success?
- They are very good at identifying sites that will fit the Wetherspoons formula. It’s rare for them to make a mistake. The Edwin Chadwick in Longsight was a rare exception where they seem to have completely misjudged the area, although I could see a Spoons working in the centre of Levenshulme a mile down the road. The success of Tesco is built on astute property management as well as retailing skills.
- Wetherspoons sites are always ones with a lot of pre-existing footfall – they are primarily targeted at customers who are already in the area, or would be visiting it anyway.
- By definition then, they are not destination venues. There is seldom much point in visiting a Spoons other than the one closest to you at the time (or maybe one out of a handful in a city centre). This may seem a negative factor, but it is fundamental to the business model. While a few Wetherspoons pubs do have car parks, they would avoid any site where a majority of customers would be expected to travel by car. They wouldn’t open up, for example, in the Rams Head at Disley or the Waggon & Horses at Handforth. In this context, it will be interesting to see what kind of fist Spoons make of some of the new pubs they have acquired in more suburban locations such as the Black Horse in Northfield, Birmingham and the Childwall Fiveways in Liverpool
- They offer low prices and largely undercut the local competition, although they aren’t necessarily as cheap as often imagined. A perception of good value counts for a lot. If there’s a Spoons nearby, as a customer you have to justify to yourself paying more elsewhere.
- Their all-day food offer, while obviously more adequate than inspiring, cannot be beaten in their trading locations for range and value. All-day pub food is still rare in town centres.
- Their pubs are designed to be unintimidating and welcoming to the casual user and occasional pubgoer, hence the shopfront type appearance and open-plan layout. They are deliberately intended to be “unpubby” – I am sure the lack of fixed seating which I personally find offputting is a considered policy.
- Their drinks range offers something for everyone, from the shot drinker to the real ale buff – nobody can object that “they don’t sell that!” It’s an easy default choice for a group to go to Wetherspoons. They probably have the widest customer age range of any pub chain.
- Although it’s obviously in their commercial interest to sell cask beer, they also recognise that it is useful to keep CAMRA sweet. If CAMRA started generally condemning the chain it could do a lot of damage.
- They have constantly varying offers and promotions to maintain customer interest.
- They offer a consistent formula across all their pubs (with a few minor regional tweaks). This may be condemned as bland and uniform, but you know exactly what to expect, and it makes it much easier for the company to stay in control of what is on offer and maintain standards.
- They have now achieved a critical mass so that the chain promotes itself through word of mouth – say to someone “there’s a new Spoons opening in Puddlebury” and no further explanation is needed.
- They have created a subtle differentiation between the Wetherspoons and Lloyds No.1 brands which allows them to widen their potential market in the “night-time economy”, although the two can be indistinguishable in the daytime.