Hawthorn Leisure, run by Noah Bulkin, is a new pub company which recognises the importance of data to running a profitable pub business. The company now has several hundred pubs and is aiming to transform them from struggling to successful by tracking everything from the price charged for beer to daily sales fluctuations to customers’ drink preferences.
Understanding pricing and the mix of drinks is key, Bulkin says: “A lot of pubs don’t have that data.” As he sees it, British pubs have long suffered from a lack of attention. “If you can make them the core of your business,” he says, “there’s a fantastic opportunity.”
The industry is fighting back, thanks in part to investors like Bulkin. After six years of declines, sales at pubs open at least a year have grown for 14 consecutive months, according to pub industry data provider CGA Strategy.
Bulkin is buying up mostly tenanted pubs—he’s acquired 363 since early May. He is spending anywhere from roughly £10,000 to £100,000 per bar on renovations, including new touchscreen cash registers that are linked to a centralized database and allow Bulkin to see what’s selling and what’s not. With the help of a former banking colleague, he’s projecting potential sales and earnings at the pubs. “Applying some granular analysis of what a person might drink and what they will pay is an incredibly important element,” he says. “This hasn’t been done in the bottom end of the sector.” Two beers that are identical in price and taste similar could deliver as much as an 80 percent difference in profit, he says.
Bulkin also hopes to improve relationships with tenants. He requires his managers to meet with tenants weekly—previous owners, he says, checked in only once every few weeks—to discuss which beers to offer, pricing, and how to differentiate the pub from competitors. “We can be very flexible and creative to come up with the right structure for each pub,” he says.
Zonal Retail Data Systems, which supplies registers and databases to U.K. pubs, says it will increase sales to about £50 million this year, more than double what it sold in 2010.
This story was originally published in Bloomberg Business Week