The Caterer Interview – Lee Cash & Hamish Stoddart

09 May 2011 by
The Caterer Interview – Lee Cash & Hamish Stoddart

Next year will see the 10th anniversary of innovative pub company Peach Pubs and, after a brief hiatus, the company is once again growing its estate and is on the point of opening its 14th pub, the White Horse in Harpenden. Neil Gerrard talks to founders Lee Cash and Hamish Stoddart

It will be a decade since Peach was founded next year. How did you get involved in the first place?Lee Cash (LC) After working with Raymond Blanc for five years in the Petit Blanc brasserie, I decided gastropubs were the buzz so rather than going and doing a brasserie, I went and did a pub. I also like the fact that they have real bars where people meet and mingle and it is a great atmosphere when you get it right.

I was bursting at the seams to get started and find that place. My old boss said if you are going to go, give this guy a call because he is looking to get involved in a start-up and that was it. We met up and what started out as me full-time and Hamish a day a week, evolved over about three years to us deciding to do this thing full-time together.

You will have 14 pubs once the White Horse in Harpenden is open in May. Do you have plans for further expansion?Hamish Stoddart (HS) We'd like to do three a year.

LC We think we can do 20-24 pubs within an area two hours from our barn at North Aston near Bicester. We really believe in the ability to bring people back together to do a day's training - for the partners or the team to come and learn stuff and keep the culture alive. If you draw a two-hour circle around there then that is our patch, from north London to Cheltenham through to Sussex.

How are you funding that expansion?HS Banks are a bit more difficult at the moment so we do a bit of bank funding and a bit of profits, and sometimes the partners coming in. A lot of it is money we are making.

Are you going after freeholds, leaseholds or a mixture?HS It is a really mixed bag. We have got four freeholds, four free-of-tie leases and five pubco leases. The conclusion we have come to over the years is not to worry too much about exactly what it is. Make sure it is a great operation in the right location with the right potential customer base in the right town.

How are you finding consumer confidence and how are you coping with the increased tax burden on pubs?HS The tax burden on pubs is huge. You add up how much tax we collect for a £17m turnover. We are collecting something like £5-6m for the revenue in VAT, PAYE, rates and so on. That is all coming out of the disposable income of the communities we are in.

We are operating on a margin which isn't totally slim because we are successful, but it is hard work to make people love what we do enough to compete with the supermarkets where the burden for a gastropub meal is a lot less. A Tesco or Sainsbury's gastropub meal for two, the tax take is £1.50 or so.

But then again, our sales aren't bad. So what do you say? Perhaps we are getting better and we are taking more of the market. But then not many people's sales are down and I find that bloody remarkable. How can 2.5% come out of the economy and not knock sales?

LCPeople are surviving because it is a so much more sophisticated industry than it was seven or eight years ago. It has moved rapidly to keep up with the speed of change even by comparison to what we were doing when we started.

HS We are definitely doing a lot more stuff. We work a lot harder to take the same amount of money that we were doing at the beginning.

In what ways are you working harder?
LC
Buying, product, what we sell, how we market it, how we buy it, and how we train.

HSWe are lucky. At this point of growth, you are taking advantage of your scale. People ask when things change and someone said seven sites and 17 are the two points where you really do change. Well I think we are making the change to 17 now. But between seven and 17 you don't seem to be able to take advantage of anything! It just got harder because you are trying to grow. Post 17 I think we will get to a point where we are not adding cost every time we grow. You are taking advantage of buying power, systems networking.

What would you like to see the Government do to support pubs and restaurants?HS I would love for them to take the approach of the French, recognise that the service industry is a really important part of Britain and say let's support the service industry by reducing the VAT.

The scary, scary thing to me is that as disposable income shrinks, supermarkets get more and more powerful, Wetherspoon's gets more and more powerful, M&B gets more and more powerful. Where does the independent restaurateur go?

It is the pressure on these small places that don't have these economies of scale. If the Government doesn't support it, what will gradually happen is the independents will go out of business.

At the start of last year, your operations director Paul Cutsforth joined Orchid. You spent some time finding a replacement. Do you have one now?LCYes, although we didn't publicise it because the last one got nicked. It left enough of a sting that we decided this time not to talk about it until it got settled.

In the end Spencer Graydon joined us from Gondola about six months ago. He was running Ask, so it was someone who is used to running much more scale than us in a foodie service-driven environment. He fitted in beautifully between Hamish and my skills and culture. I feel really lucky that we got him on board.

And in August last year Adam Saunders, one of your joint venture partners who ran the Fishes and the Fleece in Oxfordshire, left for a new life in Australia. Have you found a new partner?LC No, it's a shame that he left us but we still have this opportunity in Oxfordshire that we are still looking to fill. It is a great patch because you have got Oxford on one side and Chelthenham on the other, so we would love to hear from someone.

lee cash and hamish stoddart's top tips for running a successful pub business

â- Don't tolerate the wrong people in the team. Get them off as soon as you can and be really brutal about it. It is not your fault.

â- Don't cut quality. The UK market is so sophisticated. Customers can just tell.

â- Look at all the competition. That includes coffee shops, supermarkets and so on. A pub is not a pub any more. It is not a room with a great bar and great beers. It has got about 50 angles to it. It is much more complex and vital than ever.

â- Know your numbers every day. It is only when you know them that you can make a difference. Every Monday we are doing a proper slice and dice of all the costs. As a result we are doing better food costs across individual menus than we can find in the industry. It is boring and it is not about service but unless you can deliver all those customers who come in into profits, you go bust.

â- Enjoy it. Because you live your life in it. It is not a job. If you are not enjoying it, then stop.

need to know peach pubs

Founded 2002
Average weekly pub turnover £23-24,000
Top performing site (weekly turnover) Almost £40,000
Group turnover £17m
Profit £350,000 (after profit share distributed to partners)

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