How did J D Wetherspoon become the most successful pub chain in Britain?
Early life of Tim Martin
Tim Martin (born 1955), was born in Norwich, the son of parents from Northern Ireland. His father, Ray Martin, was a former Royal Air Force pilot who worked as an executive for Guinness. Due to his father’s career Martin was raised in New Zealand and Belfast.
His parents had a “fiery relationship” and “were not particularly well-suited”, and divorced when Martin was 15. He remained friendly with his father but had a distant relationship with his mother.
Educated at Campbell College in Belfast, Martin credited the school with instilling his work ethic. He recalled, “I realised how important the culture of an institution can be”.
Martin studied law at the University of Nottingham. He acquired a taste for cask ale from local breweries such as Shipstone’s and the Home Brewery, “there were a lot of very old-fashioned, sleepy pubs run by regional family brewers. They hadn’t been modernised and I think subconsciously that inspired me”.
Martin acquires the lease of Marler’s Bar
Martin moved to London in order to qualify as a barrister in 1978. He found the city’s pub scene to be “bloody awful” compared to Nottingham, typified by “loud music, keg beer and high prices”.
Martin eventually found a pub which appealed to him: Marler’s Bar in fashionable Muswell Hill. The proprietor, Andrew Marler (born 1953), had acquired the lease of a small betting shop, and converted it into a bar in early 1979. It was one of relatively few free houses (not tied to sell beer from a single brewery) in the capital at the time.
Martin later recalled that “I was convinced that if you put a pub like that in every suburb they would all do well”. He sold his flat and a half share in his house for £11,000 and used the money as a deposit to enter into a £70,000 eight year lease with Marler from late 1979. The pub was renamed Martin’s Free House.
“It was reasonably chaotic at the outset”, recalled Gerry Martin (born 1957), brother to Tim, who managed the pub for a few months. Tim Martin later confessed that he “made every mistake going for the first few years”. However sales were brisk, largely due to the fact the the pub was free to sell cask ale from regional brewers that were relatively unknown in the capital.
Martin develops the Wetherspoons formula
Martin was keen to develop a chain of pubs, but he was hampered by the lack of prime location properties available on the market. He commented, “the key is position, position, and yet more position”. A converted car showroom in Crouch End became the second pub in 1981.
Martin quickly gained expertise in gaining planning permission and securing drinks licenses. He reinvested his profits and acquired debt in order to expand the business. Further unconventional premises such as former banks, supermarkets, churches and cinemas were acquired.
Martin eventually developed a formula of low prices, cask ale, and no music. Careful attention was paid to pub food and decor. Keen pricing attracted students and pensioners who provided regular custom and what Martin described as “a good mix of clientele”.
By the time the business was incorporated as J D Wetherspoon in 1983 there were eight pubs. The Wetherspoon name came from a teacher of Martin’s who struggled to control his class.
Comparisons began to be made between the chain’s values and the ideal English pub as described by George Orwell in his essay The Moon Under Water. Whilst the similarities were initially coincidental, Martin consequently adopted Orwell’s template, and a number of outlets were named after the essay title.
Six prime North London sites were sold for over £2 million in 1987.
Tim Martin sold a 25 percent stake in the company to Scottish & Newcastle, a large brewer, for £1.5 million in 1988. The chain began to stock Scottish & Newcastle beers such as Younger’s Scotch Bitter and Theakston’s Best.
J D Wetherspoon becomes a public company
J D Wetherspoon was floated on the stock exchange in 1992. By this time there were 44 pubs, all situated in London. Scottish & Newcastle sold its stake in the business, although it continued to be a major beer supplier to the chain.
Wetherspoon introduced its all day food menu from 1993. Inspired by McDonald’s, he dedicated one third of his floorspace as smoke-free areas.
The Financial Times reported that the chain was selling Guinness stout at lower prices than the two major supermarkets, Tesco and Sainsbury’s, in 1994.
New properties were double the average pub size, and had almost 100 percent higher turnover, although margins were lower. The Moon Under Water in Manchester was opened as the largest pub in Britain in 1995. Martin commented, “The big pub is a winning formula for us. So much work goes into every application for a licence and permission to open that the bigger the premises the bigger the return for all that effort.”
J D Wetherspoon entered the FTSE 250 in 1996. It was the largest pub chain by volume sales in Britain.
The first outlet was opened in 1997. 100 outlets were opened across Britain in 1998.
One third of profits have been distributed to staff since 1998.
Wetherspoon had grown to 300 outlets by 1999. An advantage of converting former banks and supermarkets was that the company was able to significantly reduce its tax bill due to capital allowance benefits. Its rate of corporation tax was three percent in 1998, and five percent in 1999. Wetherspoon therefore had a significant incentive to expand its number of outlets, and it helps explain how and why the company expanded so quickly. The legal loophole was closed in 2001.
Outlet sales were four times that of the average pub by 2001. That year, Wetherspoon began to wholeheartedly push its food offering, taking on the likes of Starbucks and McDonald’s with its own range of coffees and burgers.
Pubs opened from 10am in order to cater to the increasingly important breakfast market from 2002.
J D Wetherspoon banned smoking in all of its pubs in 2005, ahead of the national ban.
9am openings, and TVs (on silent) were rolled out across the chain from 2006.
Food accounted for half of all sales by 2007. That year free wifi was introduced across the chain.
From April 2010, all pubs opened at 7am for the breakfast market. This was not altogether successful, and opening times have since largely been scaled back to 8am. Nevertheless, the company became second only to McDonald’s in the breakfast market.
Wetherspoon entered the Republic of Ireland market from 2013. Guinness and Murphy’s stouts were not stocked due to pricing concerns.
The number of outlets peaked at 951 in 2015. This number had declined to 859 by 2022.
J D Wetherspoon posted profit losses in 2020 and 2021 due to the effects of the Covid-19 pandemic.
Tim Martin has stated that he is keen to open outlets in France, having explored potential sites in Paris, Calais and Lille.