Inn for the night?
When an accountant who is managing director of a pub company says he is happy to add cost to the operation of his business, there has to be the feeling that either he is mad, bad, or quietly gearing the business for a take-over.
Tim Doubleday, managing director of Cheshire-based Pernickity Inns, is none of these things. Instead he is an accountant who knows the niche he has positioned his pub restaurant group in, demands investment in fabric and food. He must do this to achieve the turnover of £6m he has projected to fellow directors of this fledgling pub company.
The 10-strong group started just over a year ago with each pub costing on average just under £1m per unit to buy, develop and launch. Average food spend per customer in the evening is £12 to £15, and wet spend average is £6.50. Wet-only customer spend is minimal. Across the estate, units are expected to have 700 food customers a week.
Pernickity managers are expected to register a £15,000 turnover a week. Achieving that level of income in the pub food market, coupled with a policy of fresh food, high service levels and a customer keeping their table for the night, demands decimal-point purchasing, costing and accounting precision.
"We don't spend a penny more than we need to, but we'll spend as many pounds as it needs to make the product right. We're a pub group and proud of it, but we're in the business of offering something more in food than frozen steak pie and frozen chips. Those who think two meals for a fiver is the way forward in the pub food business are welcome to continue thinking like that. That's not our market. Customer expectations are growing in pub food. Our policy is to bring quality food into the informal environment of a quality pub," says Doubleday.
Of the 10 units currently owned, most are in the lower North West belt of Cheshire, Staffordshire and Shropshire, with outposts in Nottinghamshire and one about to open in Worcestershire. The site purchasing policy restricts locations to no further than two hours' drive from the Congleton, Cheshire, headquarters. They expect to buy no more than four units next year.
Pernickity Inns is a private limited company owned by a few investors with an undisclosed sum venture capital. At 35-years-old, Doubleday is the major shareholder of Pernickity Inns, no mean feat for an accountant whose only previous hands-on experience of this industry was as financial director of the Devonshire Pub Co (see Caterer, 12 August, p28).
The chairman of Pernickity has a higher industry profile. Bill Holroyd was a partner in the food logistics company, Holroyd Meek, which sold out to Booker in 1995. But Holroyd remains a report-to chairman rather than the big controller.
Despite his apparent lack of experience, Doubleday is clear about what the food offering is: "We offer quality dining in a traditional country-inn environment. It's table service, predominantly fresh food cooked from scratch on site, but the accent is on the ‘inn'. We think ‘inn' has a better ring to it than ‘pub.' It reflects the quality level we are offering."
There is minimal corporate branding. Customer bills reveal the pub is part of a group called Pernickity if the customer looks hard enough, but the idea is to emphasise individuality, not corporate uniformity.
This has just begun to show itself in the way each pub is managed by the manager, not head office. Pernickity is introducing a core bank of 300 menu items that meet company costings and food ideas devised by director of operations Linda Bruton-Douglas and her two development chefs. The menu bank reflects global food trends, but the core of the offering is British food done well. That's the log-fire, welcoming-host, customer perception of an English inn, says Doubleday.
Unit managers and unit chefs can select from the bank the menu items they think will work in their locality and suggest variations. As long as they meet their targets, there are few restrictions.
The better service ethos of pub food manifests itself in some simple ways. When customers go into a Pernickity pub, they are seated at a table and the service staff go to them. There is no queuing at the bar to pay, no payment before eating.
Even more remarkable for an admitted pub chain, is the policy that a table is customer property for the night; table turning is not encouraged. "We might squeeze in some early evening booking at weekends if a table is already booked for 9pm, but we make it clear to the early customers what the deal is. We've got lounge areas for coffee and after-dinner drinks. We want customers to stay with us for the night," says Doubleday.
Lifting the level of pub food and service also carries with it an increase in costs. Labour per unit is between 27% and 30% of turnover, but Doubleday defends this higher- than-usual labour cost by saying that units are still able to deliver a financial contribution of 40% top-line profit on turnover through good purchasing, low wastage and prices that are 10% to 15% higher than the average prices in pub-restaurants.
There are only two starters under £4, main course items start at £6.95 for traditional fish and chips and mushy peas, to £13.95 for fillet steak. Desserts are all £3.95.
Quality tea and coffee is a speciality of Pernickity. Espresso machines are positioned front of house so customers can watch the coffee being made, emphasising its quality and freshness.
"The coffee is probably the last thing customers will get from a visit. We want it to be a memorable experience, not a nondescript cup dragged out of the back from a pour-and-serve jug that's been stood for two hours," says Doubleday.
Pernickity has an open-plan policy on hours and conditions for unit managers. Doubleday doesn't hide the fact that salaried unit managers, chefs and their assistants will probably end up working long hours - 60 hours a week is not unusual - but he stresses there are good rewards for staff.
On target, earnings for a pub manager are between £25,000 and £30,000 plus fringe benefits such health insurance, share option scheme and pension plans of 5% of final salary for managers and 3% for chefs. Chefs working for Pernickity Inns earn £18,000 a year, but with similar company benefits and bonus schemes to unit managers. Credit card tips are collated at head office and shared out at each unit according to hours worked and seniority on payroll.
And in line with a growing number of pub companies, staff will get New Year's Eve off. All Pernickity Inns will be shut from around 6pm. "That was an easy decision to take. I think the Millennium Eve will be marked by the number of people stopping in, not going out," says Doubleday.
Facts
Pernickity Inns with Restaurants
Head Office:
The Pavilion, Abbots Moss Hall, Oakmere, Cheshire, CW8 2ES.
Tel: 01606 301789. Fax: 01606 301901.
Managing director: Tim Doubleday
No. of pubs: 10
Average purchase and development cost per unit: £900,000
Salary for managers (based on meeting pre-set targets): £26-£30k.
Salary for chefs (based on meeting pre-set targets): £18k
Average turnover per week per unit: £15k
