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Pub division chief aims to raise the bar in Scotland

Pete Dalzell is the Scots- sounding Englishman who believes he can change our nation's idea of what a pub is – and in the process create economic growth.

cHEERS: Marstons' Pete Dalzell hopes to attract families into bars while preserving the traditional pub ambience. Picture: John Hipkiss
cHEERS: Marstons' Pete Dalzell hopes to attract families into bars while preserving the traditional pub ambience. Picture: John Hipkiss

He is head of the pubs division, and recently appointed main board director, at Marstons, the quoted brewer which owns more than 2000 pubs in England and Wales and is now embarking on expansion north of the Border.

It is building brand new pub-restaurants in communities around Scotland, and with an eye on its new customers, Mr Dalzell says: "We will have great arrays of malt whiskies, but they also want Irn-Bru."

The brewer plans to invest around £25 million building up to 10 outlets, creating 500 full-time and part-time jobs, over the next three years. The first site at Dunbar is under way, with others at Braehead near Glasgow and Edinburgh well advanced.

"We are looking at a number of sites in Scotland and we are doing it quite seriously," Mr Dalzell says. Dunfermline and Forfar are targeted for early in 2013, with permissions pending for four further pubs. The model seems to be working down south. "We buy a piece of land and build a pub from scratch," Mr Dalzell says.

"Our original target was 60 pubs in three years, which we have just completed. We are pleasantly surprised at how little damage it has done to our own pubs – for a new pub-restaurant the biggest competitor is the living-room sofa, people staying in. So if we are not affecting our pubs we must be pulling people out of their houses. If you are good enough and build a pub in the right place, have the right offer and engage with the local community, you can get them out."

He adds: "It is important to buy the right site. We have got a site at Braehead between Ikea and Dobbies."

At Dunbar, Marstons is at the edge of town on the A1, close to Asda. It is thought the brewer's scouts have been prospecting territory as far afield as Dumfries, as well as in the central belt. Each pub costs around £2.5m and takes around 23 weeks to build.

A former pub manager who became an industry entrepreneur, Mr Dalzell is passionate about his trade, and the potential for the local pub in the local economy. "It is a profession," he says. "It is not just pin money, the pub industry across the UK employs a huge number of people, it's a proper job."

The Marstons estate includes 1500 tenanted or franchised houses and 500 managed pubs, and the group as a whole directly employs some 12,000.

Mr Dalzell says: "Our pubs do provide real jobs where young people can develop careers. That is a massive issue out there for 18 to 24 year-olds. A successful Marstons managed house is a business with a turnover of £1m-plus and making £400,000, that is a successful small business.

"If you are deputy manager or head chef of that business, that is a significant job."

That's how it turned out for Mr Dalzell, 47, who took a history degree and started his working life on a building site. "I started in a pub, became an assistant manager, and ended up running a small three-pub company in Birmingham."

Pubs are under threat from supermarkets and the sitting-room, and the survivors have had to reinvent themselves, though Mr Dalzell also avows that "good pubs never change".

He says: "The difference is drinking. There is a lot less going to the pub purely to drink, people want to go to eat and drink. One of the challenges for us, particularly in Scotland, is to make a pub-restaurant genuinely that."

Marstons' research has underlined that for Scots, pubs are for drinking in and restaurants for eating in. But the group has eschewed the pure restaurant model adopted by some chains. It wants to attract women and families but not so that the "bar feels like a playroom", and it preserves traditional pub ambience. "In Scotland, I don't think people have used pub-restaurants, only restaurants – we don't think that is the right direction," Mr Dalzell says."

"We have got a great track record of transforming pubs from traditional three-room drinking haunts to family friendly pubs with food."

The former publican says: "My background of actually handling the £20 notes and going to the bank teaches me that you can have great ideas in head office but it can all be hot air if it doesn't land in the pub.

"People nowadays sit down and go to the blogosphere and tell you what they think about your pub. That is possibly why some companies don't bother to engage with the community – there is less risk."

Appointed to the Marstons main board only last month, Mr Dalzell now has to engage with the City, too.

The group, which announces full-year results this month, has signalled a resilient performance despite the economic backdrop and the wet summer.

In its managed pubs, like-for-like sales were 2.2% ahead of last year including food sales growth of 2.4% and "wet sales" up 2.1%, with higher operating margins. Investment returns on the 25 new-build pubs were "strong and above target" – Mr Dalzell puts them at around 16% – the group said, adding: "The impact of our new-build programme over the past three years has been significant, substantially increasing our exposure to the informal dining market and contributing to continuous improvement in the quality of our pub estate."

The new-build pubs have been valued at a premium to build cost of over 50% and have helped offset the decline in value of the tenanted and franchised pubs.

Mr Dalzell says: "It is a serious business, very financial, and I spend some time talking to analysts. But we are a leisure business, it is about people enjoying themselves, going to the pub to have a good time – the industry sometimes forgets that's what it's all about."

CV: Pete Dalzell

Born: 1967

1984-87: Birmingham University

1989: Manager Old Varsity Tavern

1992: General Manager Mitre Inns

1995: Joined Wolves & Dudley Breweries

2000: Manager/Director for W & D (Marstons) pubs

2011: MD Marstons Inns & Taverns

2012: Promoted to Marstons plc board

Contextual targeting label: 
Food and drink

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