Star Pubs & Bars is investing £1.6m in 2017 on kitchen fixtures and fittings, part of its ground-breaking F&F policy1 which funds high cost items such as ovens, fridges, and grills, helping save licensees’ capital and improve cash flow.
The company has already invested £2.7m on kitchen fixtures and fittings since the programme launched in 2015 benefitting 153 licensees, with a further £1.8m spent on kitchen building work, compliance and improving services at these same pubs.
The policy, designed to make it easier for licensees to develop a strong food offer, has helped increase the number of Star pubs offering food to 70%, the highest percentage of any national leased operator.
Turnover from food is also high in the Star estate. In 2016, it rose six percent to 31% of sales, which compares to an industry norm of 23%.
Matt Dyson, head of business support, said, “We want to attract the right operators with the right offer invest in their pubs to provide them with the support needed to be successful. That means putting in place robust and reliable good quality commercial kitchen equipment that can cater for volume.
“Our unique fixtures and fittings policy means licensees have access to kitchen equipment which can be prohibitive for them to buy. It frees up cashflow, and ensures kitchens are kitted out properly and that high energy efficiency rated equipment is used. Our approach to kitchen investment is to invest for the long-term - to build kitchens that allow businesses to grow. This helps make Star pubs competitive, more sustainable and increase licensees profit.”
Case study: The Red Kite at Blaydon-on-Tyne
For North East multiple operator, Daryl Frankland of Leamside Ale Company, the potential of the Red Kite at Blaydon-on-Tyne was clear to see. Star’s investment and the low-cost entry offered by the fixtures and fittings policy enhanced the pubs appeal even further.
An experienced operator with four successful freehold pubs with high quality food offers, Frankland’s approach at the Red Kite is to deliver restaurant quality food at affordable pub prices.
A £280k refurbishment was undertaken to improve the pub’s food capability. Three dining areas with a total of 100 covers were added. A new kitchen was created with kitchen equipment purchased by Star and rented to Leamside Ale Company. Eighteen months after opening, the business has grown substantially with wet trade better than expected and food, non-existent before, now accounting for 50% of sales.
Frankland commented, “With so much preparation involved, we need pubs with larger than average kitchens and a minimum of 70 covers to recoup our kitchen overheads.
The Red Kite was a very attractive proposition to us as a similar freehold would have cost us £500k to refurbish.
'The fixtures and fittings policy and fact that the pub is leasehold meant the entry costs were low and enabled us to get our foot in the door and take control of a significant pub business. We wouldn’t have taken it on if they hadn’t been.”