Pints of interest: the rise of J D Wetherspoon

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.

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“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.

Continued expansion
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.

The origins of the full English breakfast

The origins of the full English breakfast are more recent than you might expect.

Historically, the classic English breakfast pairing was bacon and eggs. Bacon was the staple meat for the agricultural class for hundreds of years, and eggs were available in most homes each morning. As late as the 1950s, an “English breakfast” was shorthand for bacon and eggs.

Seemingly beginning around 1915, as wartime economy and rationing began to bite, the cold remains of the previous evening meal began to be added to bacon and eggs. As bacon and eggs became scarcer (and more expensive), the additions of these items bulked out the meal and prevented waste. Fried bread and potatoes were popular starchy additions. Sausages were not subject to rationing, and began to be introduced as a bacon substitute.

The earliest reference I can find to the phrase “full English breakfast” is in a 1930 edition of the Daily Mail.

A 1978 edition of The Globe and Mail of Canada lists the meal as comprising “eggs and bacon, tomatoes, sausages, kippers and heaven knows what else”.

The phrase was first shortened to “full English” (minus breakfast) in the mid-1990s.

Today, a full English comprises of, more or less, sausage, bacon, eggs, some starch such as fried bread, toast, hash browns or sauté potatoes, and some vegetables such as tomatoes, mushrooms and baked beans. Black pudding is popular. Regional variations include white pudding and oatcakes.

On the trail: a history of Slug and Lettuce

Slug and Lettuce is a British chain of bar restaurants with 70 outlets.

Slug and Lettuce was established by entrepreneur Hugh Corbett (born 1943) in 1985. Corbett brought a degree of trendiness and relative luxury to his pubs, with an increased focus on wine and food. His pubs were all given nonsensical names, which differentiated them from their competitors (eventually Slug and Lettuce became the standard name).

Corbett imitated the stripped-back character of David Bruce’s Firkin pub chain. Bare pine board flooring, no curtains, and large glass windows were the order of the day. This meant that people could look into the pub from the street, and the new light and airy open plan design made the pubs more attractive to women.

Corbett cannily located the first Slug and Lettuce in Islington, which was beginning to undergo gentrification due to its proximity to the newly liberalised City of London.

There were six outlets by 1986.

Slug and Lettuce was sold to David Bruce for £2.25 million in 1992. Bruce began to pursue the relatively untapped female market in earnest, imitating elements of the upmarket Pitcher & Piano chain and increasing the emphasis on food.

Slug and Lettuce underwent another rebranding, aimed at creating an English pub/Continental bar hybrid, in 1995.

The rise and fall of the Little Chef empire (1958 – 2018)

Little Chef was the largest restaurant chain in Britain with 433 outlets.

The Little Chef concept is developed
Sam Alper (1924 – 2002), a caravan manufacturer, and Peter Merchant, a caterer, had been inspired by diner caravans they had seen in America. They introduced the concept to Britain when they opened the first Little Chef restaurant in 1958.

The first outlets were portable prefabricated roadside snack bars. Outlets could be built, assembled and opened within a matter of hours.

Little Chef was acquired by Trust Houses, a hotel operator, in 1961. Trust Houses announced plans to invest heavily to expand the Little Chef concept.

By 1964 Shell-Mex and BP had discovered that opening Little Chef outlets next to its petrol forecourts helped to boost fuel sales.

Outlets began to be built from brick from 1965. The Little Chef brand guaranteed consistency for weary travellers in unfamiliar locations. There were twelve outlets in 1965, and 28 by the end of 1968.

Trust House Forte expand the business
Trust Houses merged with Forte to form Trust House Forte, a large catering and hotels company, in 1970. The new owner had the necessary funds necessary to roll out a rapid expansion of Little Chef.

As it was difficult to acquire roadside planning permission, Trust House Forte acquired a large number of existing transport cafes, and converted them to the Little Chef format.

A typical Little Chef meal cost 35p in 1972. It was around this time that the “Fat Charlie” logo was introduced.

Due to rapid expansion there were 174 outlets by 1976. Little Chef was the largest restaurant chain in Britain by 1983, with 314 outlets.

In 1986 the Competition Commission found that a significant proportion of customers were locals, not commuting drivers. Little Chef was innovative and forward-thinking, providing high chairs and baby food when most British restaurateurs regarded children as irritants rather than potential customers. Meanwhile, strict roadside planning laws preventing new buildings effectively worked to maintain the company’s monopoly.

Trust House Forte acquired Happy Eater, Little Chef’s only major rival with 90 outlets, in 1986.

Subsequent owners and decline
Little Chef was acquired by Granada, an operator of motorway service stations, in 1996. Granada hiked prices, charging £7.95 for a full English breakfast in 1996! The high prices did not guarantee quality: even the omelettes were frozen and then reheated.

Granada described Little Chef in 1996 as “tired and neglected”. Management Today described the chain in 1997 as “perhaps the most neglected part of the old Forte empire”.

Under Granada the total number of restaurants expanded to 433 (68 of which were Happy Eater outlets) by 1999.  Granada also began to franchise Burger King in some of their existing outlets. Upon conversion, Burger King outlets would see double the turnover of former Little Chefs.

In 2002 Little Chef was serving 30 million people a year.

Little Chef was the first branded roadside restaurant chain in Britain, and had few competitors until the motorway service stations began to improve exponentially in the mid 2000s. They now offer a range of desirable high street brands such as Burger King, W H Smith and M&S Simply Food. Meanwhile McDonald’s have vastly extended their drive-thru presence and offer faster service and lower prices.

In 2013, a Kuwaiti private equity conglomerate acquired the company. In 2014 there were only 72 outlets.

The remaining outlets were sold to Euro Garages in 2017. Euro Garages lost the rights to the Little Chef brand after one year, and all remaining outlets were converted to the EG Diner fascia.

Greggs in central London

Gregg’s is nationwide British bakery chain. Why are there so few Greggs outlets in central London?

There’s certainly no shortage of commuters looking for lunch, or tourists looking for a quick snack. McDonald’s, EAT, Pret and Starbucks all maintain a strong presence.

Living in the provinces, I have always been impressed by the sheer quantity of Greggs outlets. In central Leeds and Newcastle, large cities, one never need be more than one minute’s walk away from a steak bake or sausage roll.

So why so few outlets in central London? Yes, the chain has northern origins, but that didn’t hinder McDonald’s or Starbucks, with origins even further afield.

The chain is essentially a fast food retailer: largely calorific products served quickly and cheaply. And Burger King, KFC and McDonald’s are very successful in the capital. People clearly aren’t afraid of unhealthy food.

Is the rent too high to make the low cost retailer profitable? Greggs outlets have very limited seating, so I hardly see how this could be an insurmountable problem. In Bread: The Story of Greggs, Ian Gregg, the former chairman of the company, states that before the 2008 economic crash, rivals were overpaying for sites in central London. But if that is indeed the case, then what has prevented the chain from expanding in the area since the economic crash, now that rents are lower?

Lets look at the individual USPs of its rivals. McDonald’s offers seating, Starbucks offers comfortable surroundings, Pret offers speciality coffee. The Greggs proposition can actually be fulfilled through small supermarket concessions. In actuality, many small supermarkets in central London already offer a hot pasty/sausage roll selection. How does Greggs improve on their rival? Well the Greggs product will be fresher, as they bake their food throughout the day. So freshness, convenience and price are the USPs that need to be drawn upon. Greggs also needs to smarten up its existing central London outlets in order to place distance between itself and its reputation as downmarket junk food.

The marketing of Lea & Perrins

There are two key marketing strategies at work behind the almost mythic reputation of Lea & Perrins’ Worcestershire sauce.

1.) the “secret” recipe The website states that there is a secret recipe, known only to a “privileged few”. Heck, if the secret recipe tactic works for Coca-Cola and KFC, why not us? But the truth is, *every* corporate recipe is a secret. You don’t know the recipe for Walker’s Roast Beef crisps or Knorr’s Chicken Seasoning, do you?

So one of the products major differentials is hardly a differential at all. Okay, I hear you say, we don’t know what Worcestershire sauce is! Well that’s hardly a secret. In fact, the company have been quite open that the sauce is principally vinegar and a soy sauce substitute (acid-hydrolyzed vegetable protein). Also included are salted anchovies, tamarinds, chillies, shallots, garlic, onions, ginger, molasses, sugar, cloves and “various fruits”.

2.) the idea of “craft”, small-scale, “vintage” traditional production. There is no reason to assume that the methods are more traditional than anywhere else. For example, the ingredients are no longer matured in wooden barrels: plastic and metal containers have taken over. It’s hard to see it as a craft product when it’s just vinegar and soy sauce with some crazy ingredients thrown in for good measure. Although I do love it with chilli con carne… And in the US, it still comes wrapped in paper, as it has been since the 1850s. Although the paper is no longer necessary to avoid bottle breakages, the tradition has endured. It gives the original Worcestershire Sauce a USP. Understand that I don’t mean to do down the marketing tactics behind Lea & Perrins’ famous product. In fact, I think it’s all the more impressive that tried and tested marketing techniques have been utilised so effectively without losing its sense of authenticity or becoming a “me too” brand.

The rise of “craft”

The notion of craft and premium quality food and drink did not arise from the ether. In this post I attempt to trace its roots in recent history.

With the end of post-war rationing in Britain, a range of super-premium restaurants with a focus on local provenance opened in the North West of England. Beginning with Sharrow Bay in 1960, they catered to a very small segment of the population, but their growth indicated a desire for authentic, quality food.

In the 1970s the British public were enamoured with the wave of packaged and processed products: Watney’s Red Barrel ale, yoghurt, frozen food etc. They were expensive, but people were prepared to pay a premium for it because it was new, and perceived as “better”.

The late 1970s and 1980s saw the growth of the real ale movement, which advocated small scale production, locality and traditional production methods. But the provenance doesn’t even have to be your localness: just provenance in general seems to suffice. One had only to witness the growth of Whitbread’s Stella Artois in the 1980s and 90s, a beer marketed with French language advertisements, despite being brewed in the UK, and with origins in Flemish speaking Belgium.

Another interesting example is Jack Daniel’s whisky. With a monochrome label and adverts, the product was able to successfully foster a small scale image, “craft” image. This consumer “backlash”, as it were, stems from a new-found consumer cynicism. The consumer knows that most products they buy in their supermarket are owned by multi-national conglomerates. Many people do not like giving their money to perceived faceless corporate entities. Any product that seems to defeat or circumnavigate this system, and treat the consumer like an adult, seems to be on to a winner. People will pay far more than net worth for a perceived craft product because it makes them feel good for two reasons: supporting local or craft production, and avoiding the multinationals. I don’t think this applies to the whole population, but I think it applies to a good number.

The examples are endless, but I will give just one more: Yorkshire Tea. The name “Yorkshire” implies traditional craft methods and localness. The name isn’t faceless and bland like competitor brands PG Tips and Tetley Tea. The brand wears its provenance proudly, and isn’t ashamed of its local origins. The brand came from nowhere in the 1990s to becoming the third highest selling tea brand in the country by 2007. It wasn’t until 2000 that it became a nationwide supermarket staple. The brand has a surprisingly modern heritage: I doubt that many of its consumer base would estimate that the brand was only launched in 1977. Meanwhile rival brands such as PG and Tetley patronised the audience with television adverts that starred cartoon characters, chimpanzees and monkey hand puppets. The consumer goods advertising market has matured. Treating consumers like idiots works far less well than it used to. Consumers appreciate being treated like human beings.

The premium/provenance market shows little sign of slowing. Borough Market in London is now firmly established as a destination for quality food with provenance. The celebrity chefs have long promoted locality and quality. Farm shops are now ubiquitous in many English villages.

Craft brands need to be careful to maintain their image. Stella Artois sold for the same price as other premium lagers, despite its slogan of “Reassuringly expensive”. Consumers get wise to a brand that seems inauthentic, and it irritates them as an insult to their intelligence. Stella is now, frankly, a commodity lager, and its premium positioning has largely been given over to the Italian Peroni brand, which had spread largely through word of mouth.

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