The benefits of training to pub retailers: a study for the Punch Pub Company.

This paper reports on a research project that evaluated the impact of training prevision for tenants and lessees of the Punch Pub Company. Training provision by the company aims to support new tenants and lessees who are taking on one of the company's pubs for the first time, or who are in receipt

of an investment grant from the company, or who are developing marketing skills. The research involved 100 telephone interviews from 563 participants on four programs, and who were also "operators in situ". In these cases it was possible to explore changes in operational performance after the operator in situ had attended the program. The research confirmed that on all four programs' business performance improved after the programs. A substantial majority of interviewees reported that sales and profits had grown as a result of actions they had taken afterwards. The paper suggests both individual tenants and lessees, and the company gained from these programs.

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The Punch Pub Company is undertaking a substantial investment in the training and development of tenants and lessees of pub and bar properties in the company's estate. The following reports on a research project that explored the impact of these programs on business performance in the participating pubs.

This research builds on an earlier project that explored the benefits of training programs aimed at new tenant/ lessees and existing tenant/lessees in receipt of an investment grant (Lashley, Lincoln, & Rowson, 2001). The report is also informed by research projects undertaken for the Hospitality Training Foundation (HTF, 2001a; 2001b; 2002), and the North West Tourism Network (Lashley, Thomas, & Rowson, 2002). These prior studies show that business benefits do flow from an investment in training and development. Unfortunately firms are not always able to appreciate the benefits from training activities, because they use narrow measures of performance appraisal that fail to capture the full array of benefits from training to retailers, staff and customers (Brander-Brown & McDonnell, 1995).

Within the Punch Pub Company context this situation is further complicated because many of the tenants and lessees are in effect small independent firms, and many of the smallest firms are highly reluctant to invests time and other resources in training (Thomas et al., 2000). Earlier studies have shown that "lifestyle" businesses constitute a significant proportion of small firms operating in the sector and these are less likely to recognise training and development needs (Beaver & Lashley, 1998). Furthermore, a number of studies show that while salaried managers and small firm owners are able to identify skill shortages and skills gaps in recruits and existing employees, few reflect on their own management development needs (Department for Education and Employment; DfEE, 1999, 2000a, 2000b; Lashley et al., 2002). Yet management skills are at the root of many of the industry's problems and difficulties. One report stated:

   Without a more skilled managerial cadre it is hard
   to envisage how any effort aimed at systemic
   improvement and upgrading in the strategic managerial
   capacity of the sector can succeed.
   The ability of management to analyse, develop
   coherent long-term plans and offer the practical
   and strategic leadership needed to promote and
   manage the transition to a higher quality, higher
   value added approach to competition is a prerequisite
   for creating a world class sector (DfEE
   1999, p. 43).

Any ambition to grow sales volumes, and improve business value through increased retail activity within the Punch business is likely to be critically dependent on the skills, abilities, talents and motivations of the tenants and lessees who operate their pubs. This report investigates the outcomes of attempts to improve tenant and lessee management skills and abilities through four programs. The Modern Licensee Retailer (MLR) is a 10-day residential program and is aimed at tenants and lessees new to Punch pub properties. This research explores two cohorts who undertook the program in 2000-2001 (MLR1), and 2001-2002 (MLR2). The Customer Focus (CF) program is a 5-day residential program aimed at existing tenants and lessees who are in receipt of a development grant from the company. Both the Modern Licensed Retailer program and the Customer Focus programs are compulsory. The X-factor program is a relatively new program aimed at developing selling and marketing skills.

The research produced a simple checklist to note the benefits of training and development for participants on four business development programs; and developed a qualitative picture of the benefits of training and development in a sample of retail operators.

The Franchise Relationship

The Punch Pub Company has a franchise relationship with tenants and lessees (Lashley & Rowson, 2002). Although the relationship involves a less rigid operating system than might be the case in a more traditional franchise arrangement, the pub company allows the franchisees (tenants/lessees) to operate pub properties in exchange for a rental and a exclusive supply of "wet" product. Each franchisee is a nominally independent firm operating as the company's "agent" (Taylor, 2000). Each small firm, is in principle, in a position to develop that property because they have close knowledge of the needs of that business and have entrepreneurial incentive to grow sales, reduce costs and improve profitability.

From the franchisee's perspective, a pub tenancy or lease allows the "entrepreneur" to operate a business with low barriers to entry because the "in-going fee" requires much less capital than an outright pub purchase. The relationship with Punch also allows the small firm to gain from the expertise and support provided by the company. Unlike more independent small firms the tenants and lessees running these pubs are able to access the management resources of the Punch Pub Company.

While there are clearly benefits to both tenants and lessees, and Punch, there are also important tensions that are a by-product of the relationship (Lashley & Lincoln, 2000). The company's key sources of revenue through rental income and earnings from wet product supplies represent key cost areas to tenants and lessees. The support available to tenants and lessees from the company through business development managers (BDM) is a cost to the company, and the span of control of each BDM will have an impact on the level of support to individual tenants and lessees. For Punch, the agency relationship with operators involves an indirect form of control of the company's ability to operate as a leisure retailer. The ability to grow sales and increase the value of its property portfolio is dependent on the collective performance of the small firms operating the pubs and bars in the estate.

Small Firms

Although ambitions for business growth and development are a key feature of a retail focus, not all tenants and lessees are driven by classic entrepreneurial motives, Previous research suggests that only one in eight small firms in this sector have primary business growth aims. The majority of tenants and lessees are to varying degrees, operating for lifestyle reasons. The motives of tenants and lessees are likely to vary between two extremes--those who are growth and profit maximisation driven at one end, and those who are running pubs because they "like the life" at the other (Thomas et al., 2000). The business motives of tenants and lessees are important because they impact on the awareness and perception of their own development needs. Beaver and Lashley (1998) suggest that growth orientated operators are more receptive to management development. Lifestyle business owners on the other hand tend to give their own development needs lower priority, except when a crisis looms. The consequence of these variations in motives for Punch is that reactions to compulsory programs, prior to taking on a pub or prior to an investment grant, are likely to get a mixed reaction. Some are bound to feel that the programs are an imposition and of no relevance to themselves.

Measuring the Benefits

Attempts to measure an investment in management development, and the benefits flowing from it, are difficult to establish. Training costs can be estimated and measured; however, the precise financial yield from a training investment is much more complex. The linkages between an independent variable factor like the level of training activity and dependent variables, such as business benefits, are hard to establish because successful business performance is frequently due to a cluster of factors. These may vary between organisations and service types. Even where a linkage can be established, say between the level of training activity and the level of staff turnover, it is not certain in which direction the relationship flows (Geanuracos & Meiklejohn, 1993).

That said, earlier research projects show that there are benefits to be gained, and that a model developed by the author can be applied across a wide range of hospitality retail operations (Eaglen, Lashley & Thomas, 2000b). Essentially the approach recognises that benefits from training are not always effectively captured by narrow financial measures. For example, traditional financial measures fail to measure the costs of staff turnover, and ignore the costs of not training that flow from reduced productivity and lost customers. Measures need to include a mix of tangible and intangible measures capable of evidencing the benefits for a range of stakeholders. A "balanced score card" technique is required as it focuses on the stakeholders involved (Brander-Brown & McDonnell, 1995).

Research Approach

The research was undertaken in autumn of 2002. It considered the benefits to the tenants and lessees who had undertaken the four programs presented up to that point, The project was commissioned within a short time frame and with a remit that required a broad overview rather than detailed data gathering. The research aim was to:

1. produce a simple checklist to note the benefits of training and development for participants on four business development programs

2. develop a qualitative picture of the benefits of training and development in a sample of retail operators.

The key issues to be considered were based on earlier research projects conducted by the author. The project recognised that data gathered on the benefits needed to consider the major stakeholders involved. Principally, the tenants and lessees and the company, but also staff and customers of the properties included.

It was also recognised that in many cases, data would not be formally gathered by the respondents, but would need to feature the perceptions of interviewees. That said, the indicators used would cover key stakeholder concerns. In addition, the benefits of a training initiative result in changes in behaviour. Figure 1 shows the link between a training intervention and understanding the link with business performance improvement

[FIGURE 1 OMITTED]

Bearing in mind the potential stakeholder interests, Table 1 lists the potential that might be appropriate in this study. Subsequently data was not available for each indicator, but this informed the design of the interview schedule.

Research Method

The research took the form of a telephone survey of tenants/lessees who had undertaken one of the four programs. The research focused on the operators in situ: and followed a stratified sample based on the schedule outlined in Table 2. The sample include 100 telephone interviews selected at random from the list of operators in situ who had undertaken that program weighted across the numbers attending each program. Table 2 shows the numbers of operators in sire on each program and indicates the sample intended for each.

The proposed interview base of 100 telephone interviews represents a sample of 17.76% of the 563 pub operators in situ across the four programs.

Analysis of in-company data suggests that, where figures are available comparing individual retailer performance prior to, and after the program, average profitability rises. However, in some cases, profitability drops back. The sample frame reflected both those where profits have risen and those where profits appear to have dropped. The proportions identifies reflected the overall pattern for each of the four programs. Table 3 suggests the framework within the sample bearing in mind the proportions of pubs recording an increase or a decrease in profits.

The sample included was randomly selected from the list of operators in situ selected from the list provided by the company. Table 4 lists the breakdown of respondents according to the amount of time in the property, the amount of time in the licensed trade and qualifications profile. Most had experience of the trade beyond their immediate role. Few had any formal post-school qualifications. A distinguishing feature of the MLR2 cohort (2001-2002) was that a higher proportion had been in their current pub for less than 12 months, but had prior experience in the trade.

Results

The results of these telephone interviews confirm a highly positive picture of the benefits arising from the programs undertaken. Even though the majority of interviewees had considerable experience in the trade, attendance at these events was seen as a positive experience that yielded benefits in business performance. The interviewee's personal impressions were generally favourable, frequently resulted in actions that improved business performance in some way.

Impressions of the Program

When asked about their overall impression of the program 65% of the respondents across the four programs made positive comments about the program. The following are examples of some of the statements:

   I felt that it was a good course and it acted
   as a 'wake-up call' for me. This pub is a city
   centre pub most of the customers are shoppers,
   office staff, and passing trade. The course
   sparked off' a few ideas that have worked well
   in the pub (EF 004).

   The course sure changed the way I think about
   the business it makes me watch my profits
   more and think about what promotions are
   costing me (CF 007).

   I thought the course was excellent it was a real
   'eye opener' for me about what running a pub
   is all about (MLR1 002).

   I knew most things but it was good to be made
   to look at things again. And I learned lots
   despite my experience. In the end I thought
   it was 1000 [pounds sterling] well spent as I got a lot from
   it (MLR2007 PD).

   It was very good, very clear and 1 enjoyed it,
   It taught me lots of things and opened my eyes
   of ways to merchandise my goods. It showed me
   how to deal with violence on the premises and
   many other things (MLR2 008).

The sample was structured to include some units where profitability had decreased since attendance, but this appeared not to influence responses. Respondent MLR 007 PD quoted above, is an example of an operator in situ who had positive comments to make even though profitability appeared to have decreased. Responses from the units where profits had decreased were similar to those where profits had risen. In other words, respondents in these properties matched the general tendency to make supportive comments.

Across the 100 interviews, 21 respondents made mixed comments about the program attended:

   I thought it was very good but I'd already been
   on a course with Wolvethampton and Dudley
   that covered almost the same things so I didn't
   get a great deal from the course (CF 009).

   I thought that the course was excellent, but I
   thought it was a bit too long as 2 weeks out of
   your pub when you have just started is a problem.
   I think that you should do the course before you
   take over the pub not after. (MLR1 013).

   If I had been in the pub for 2-3 months it would
   have been more appropriate for me. At best the
   course should have been a week long. Not structured
   that well. Most things were useful, helped
   me to work out a P&L account and the cellar
   was good but should have been longer in the
   course (MLR2 018).

In the main these mixed comments featured negative comments about the length of the program, the content and its inappropriateness to them, or travel problems. Three mentioned that they had to travel 3 or 4 hours to attend the course.

Fourteen respondents registered negative comments about the program. These are listed in Table 6 together with comments about the personal circumstances of the respondent. The fee is an issue for several responents making negative comments. The NILR programs attracted the most negative comments, though this is not disproportionate. The issue is of perceived value for money and need. In 8 cases, the respondents had 4 or more years experience as a licensee, and in a couple of other cases the respondents had experiences as an operations manager, and as a marketing manager, and clearly felt that they knew the material well. Two of the CLR respondents felt that the course was close to the MLR program. In fact this was a point mentioned by two respondents who made mixed comments. So four of the interviewees on CLR program commented on the similarity of the program to MLR program that they had recently attended.

Although several of the respondents making negative comments had extensive experience of running pubs, this was not shared by all those with long experience in the pub trade. For example MLR1 003 had over 28 years experience in pub management he said, "I was a good course it acted as 'refresher course' for me". MLR1 009 with 20 years experience agreed, "The course was brilliant I really enjoyed it, and I got lots from it that really helped me with the business". In fact, 57 of the 100 interviewees had four, or more, years experience of the pub business. About 50% had more than 10 years experiences of pub management and as a manager, tenant or lessee. Looking at the experienced tenants/lessees as a group they were no more likely to make negative comments than those who were recruits new to the trade.

Resulting Action

The model outlined in Figure 1 suggests that training and development is chiefly concerned with changing the behaviour of participants. In this case, it is helpful to gain an insight into what actions delegates took after attending the various programs. Table 7 highlights the responses of the 100 respondents against the four programs. Across the four programs 75% of the respondents made some positive action when they returned to the pub.

The following are a sample of some of the positive actions taken by respondents as a result of the program:

   Oh several the main points were the course got
   me thinking about my pubs business potential
   and showed me that I needed to move the ideas
   forward (EF 001).

   Most of the marketing things visual displays that
   boosted my sales. Just by putting bottles in a
   more prominent place I have increased sales by
   25%. I do lunch time food and I have started
   doing breakfasts. That was an idea I got from
   the course in a way. I've got a factory by me and
   once word got out I am doing 20 or 30 breakfasts
   a day and carry outs (i.e., bacon or sausage
   sandwiches) (CF 011).

   It was useful for costing things like food, working
   out prices really opened my eyes because I went
   on the course I was running promotions that were
   costing me money or because my GP wasn't right
   I was losing money on every meal I sold. So yes
   it has made a big difference to my business
   in terms of sales and profitability. I just wish that
   I'd gone on the course earlier (MLRI 025).

   Made me aware of how much I was giving away
   free pints to regulars now and again, I tidied up
   paperwork, changed the display. I took glasses
   from view behind bar don't sell glasses and got
   more profitable bottle lines there at eye contact
   level sell more increased sales and profitability
   (MLR2 026).

The elements that were felt to be most useful varied somewhat between programs though marketing and sales promotion are clearly the most valued elements of these programs. Given the nature of the X Factor program it is not surprising that the marketing and sales promotion techniques and issues related to the food offer were ranked highly by all the respondents interviewed. Costing and profitability are important for some. Of the 25 interviewees who had been on the Customer Focus program 16 said that they had taken action based on the marketing and sales promotion inputs from the program. Six mentioned issues to do with the food offer, 8 took action related to improved cost management and profitability, 2 felt they were better all round and just one person mentioned actions related to staff performance. The MLR programs resulted in actions across a wider set of content. Again marketing actions were mentioned by most respondents, 16 of the 65 respondents on the two MLR programs undertook some steps to improve marketing and sales promotion activities. Twelve took action related to cost control and profitability management. More effective operations management, particularly relating to food operations, was highlighted by 10 respondents, and 4 mentioned actions to improve staff performance. Ten respondents found the legal inputs particularly helpful and 6 found the cellar management aspects useful. In a couple of cases, the inputs on drug abuse were most valued.

Twenty respondents registered some negative comments in relation to their actions. The following are some examples of their comments. Generally these reactions are consistent with the overall impressions of the program:

   I don't think that I used that much from the
   course but it was only 5 6 weeks after doing the
   MLR course. I don't think that I benefited that
   much I waiting for a refurbishment and my
   heating is broken Punch have known about this
   now for 3 months and they have done nothing.
   So not much can be done in this pub until the
   refurbishment is done (CF 022 PD).

   I didn't think that I'd use a lot of the things
   in the course but I was 'forced' onto it by Punch
   as a condition of getting the pub. But I have
   found myself working on ideas that I got from
   the course (MLR1 014).

   Regret going on course came away with nothing
   cost us 2000 [pounds sterling] (MLR2 011).

The negative comments are mostly concerned with a sense of knowing it all before, or the cost. The perception of need is clearly an issue here. Given earlier studies that suggest ambivalence to training in some small firms, this may not be surprising. As with their overall impressions of the program, some experienced respondents made negative comments, but many other experienced respondents felt they gained from the program. Business motives and psychological commitment may be important factors. Tenants and lessees who are more lifestyle oriented may be less likely to perceive value in these courses. Both the time and money involved become significant barriers to these people and they may be less likely to report changes that improved the business.

Business Impacts

The actions taken by respondents produced some impressive results. Table 8 identifies results across several business measures. Changes in sales levels, profitability, the impact of food sales, changes in costs, and transactions per employee are all measures that are of interest to the tenant/lessee as a small firm owner. That said, typically many of these firms have a fairly simple reporting system and not all respondents were able to comment on all the measures. In other cases, the business did not make a food offer and were not able to comment on the impact of the program on food sales. In these circumstances it is necessary to examine both the total responses and the proportion of responses to that element. Not surprising almost all respondents could comment on sales and profitability, and 81% of the participants claimed that sales had increased after the program, while 75% reported an increase in profitability.

The following are some of the comments from respondents:

   I've never been in business before, so I feel that
   most of the things on the course have helped me
   to build up my business. All of the things that
   you have mentioned have increased but I can't
   say how much is due to the course, but what
   I do know is without it I would have been struggling
   at the beginning. What I learnt on the
   course got me started, that's the main thing for
   me (MLR1 002).

   From 3k to 5.5k improvement (MLR2 022).

   I've got the business from nothing to around
   5000 [pounds sterling] and I started food sales what I got from
   the course helped me with this (CF001).

   Profits are up quite a lot because I've looked
   much more carefully at how I cost the food and
   portion sizes it's surprising how much profit there
   is in food when you get the costing right and the
   wastage down I got this from the course (EF002).

   The course made a difference to the way
   I managed the pub (CF018).

Improvements in food sales were experienced by a majority of respondents, but not all respondents answered this question, 56/73 reported an increase in food sales (77% of respondents). Respondents also reported cost reductions: 81% of those answering the question. Perhaps not surprisingly given the narrow range of business measures used by many of these firms, only 69 respondents were able to comment on the impact of these programs on sales per staff member. However, 48% of the total sample reported increases in sales per staff member (70% of respondents). As we shall see later, the role of staff performance on business performance was not widely reported by these tenants and lessees. Sixty-one of the total sample reported increases in average transaction values (78% of respondents). Finally, a majority felt that there had been an improvement in the overall business value. Sixty-five of the sample interviewed report increases in business value (80% of those commenting on this aspect of business performance).

Negative impacts were only reported by a smaller number of interviewees and this might be under one aspect of business performance. More typically, those not reporting an increase felt that business performance had remained the same. The pattern varied somewhat, but there were about 16 respondents in the total sample of 100 interviewees who reported little change in business performance across all indicators; in other cases one or two elements had improved and others had remained the same.

Some of those who had seen increases in business performance measure were somewhat reluctant to link these improvements with the program. The following are some examples of the twelve comments of this type:

   I think that's it's my input into the business
   more than the course (CF002).

   My profits and sales are up but this due to my
   experience not the training (MLR1 007).

   Hard work has done this not the course
   (MLR2 019).

   My experience of the last 7 years is what drives
   my sales (MLR2 018).

Relationship with Company

One of the potential benefits to come from attending these programs is that tenants and lessees might feel more positively about the company or business development manager as the immediate company representative. Increased communication between the company and its tenants/lessees might also improve communications and mutual understanding between the two parties.

In fact only 13 of the respondents felt attendance on the program had improved their relationship with the company. Two felt it had had a negative effect, but the vast majority felt that there was no change in the relationship. Beneath the surface of these interviews there are, however, clearly some negative feelings about business development managers and their relationship with tenants and lessees. So although the vast majority felt the program had not changed the relationship, many registered negative comments. Usually these were related to the infrequency of visits. "No difference, we don't see him that often" (MLR2 013) is an example of this type of response. The second set of negative comments relates to frequent turnover of BDMs. "I've had three BDMs since February" (MLR2 007) reflects the comments of many respondents. In a few cases there is clearly an element of personal animosity. "I don't relate to my BDM, he could do with going on the course"(MLR2 003) is an example. This latter point is potentially a useful suggestion in that other research by the author suggests that there are benefits for the company as a whole if BDMs, as well as area and regional management attend programs undertaken by unit mangers. There is generally a much better understanding of the benefits of the program and how it can contribute to improving business performance.

Impact on Staff

The responses to questions relating to staff performance and morale were much lower than the responses to other questions. The impression gained was that staff performance and staff satisfaction were not monitored and measured across these firms. This is consistent with other research that suggests that licensed retailers rarely employ "balanced score card" techniques to evaluate business performance. This sector deficit is further compounded by the small firm nature of the firms who make up the tenants and lessees operating Punch Pub Company's properties. Small firms are more likely to rely on informal management systems that do not always reveal the true nature of business performance and the contribution that employees make. In some cases the very smallness of the firms minimises consideration of staff: "I've only got two part-timers" (CF 005). "I only employ my daughter" (MLR2 005). That said, the interviewees were more likely to register positive impacts than negative across the series of issues relating to staff performance and satisfaction. These are highlighted in Table 10.

Thirty-five respondents felt that staff satisfaction had improved as a result of the course. This represents 42% of those responding on this issue. Respondent EF005 provides and example of the positive comments highlighting actions after the program:

   I've started regular staff meetings to spend more
   time talking to my staff about the business.
   I picked this up from the course and I'm trying
   to do a bit of team building. We have a night out
   and go around the competition. I 'stand the
   drinks' and get my people to say what they
   thought about the way the pub operated and we
   'pinch' the odd idea here and there. This way
   my staff feel more involved in the business.
   The course made us aware of employment law
   and the way we pay people, staff morale is now
   good and no-one has left in the 8 weeks since we
   opened (MLR2 010).

In other cases, respondents felt that they already had the skills needed, though it is difficult to assess whether the comment reflects reality, or just an over inflated sense of self, "I am a great guy and my staff would walk on water for me" (MLR2 029).

Similar proportions responded positively about the program's impact on staff's relationship with customers. Thirty-six registered an improvement (42% of respondents); and improvements in their relationship with the tenant/lessee (42% of respondents). A slightly higher number registered reported that staff morale had improved (45% of respondents). Fewer felt that programs had impacted positively by reducing staff turnover and staff absence. In both cases, just over 25% of respondents felt that there had been an improvement, though approximately 3 out of 4 who responded felt that levels of staff turnover and absence were unchanged. Overall, 44% of respondents felt that staff performance had generally improved since the program.

The more detailed comments of the perceived benefits of these programs shows that respondents gained an enhanced sense of the key contribution of staff:

   The course made me more aware of the importance
   of my staff (CF004).

   One of the things reinforced by my training
   at Grand Met some years ago is that 'service
   is paramount' and the Punch course re-awakened
   this in me and I came straight back from
   the course and got the staff together to see what
   needed doing to improve service (EF002).

   I have a general feeling that things have
   got better since the course, changed a few
   things, the handbook from the course was useful
   (MLR2 023).

For some, the training aspects of the program were the most important.

   Training my staff is one point that I have used
   from the course (MLR2007).

   I now hold regular staff meetings and I now hold
   training sessions (CF015).

Several pointed to interviewing staff techniques and the legal aspects of employment as a key issue that came from the program. In other cases the key benefit was that employee incentives and rewards needed to be in line with their expectations, and that incentives involved both rates of pay, sales, related incentives and some involvement in making suggestions. The use of bonuses or sales related incentives were mentioned as being applied in some pubs. In others respondents mentioned increasing team meetings, or social events aimed at the team. There was a general sense that these programs had impacted on individual participants differently, but they had resulted in a changed approach for many. In essence the approach recognised the importance of staff performance in delivering improved service, sales and profits:

   I now delegate more and give staff more responsibility.
   I learnt the training side and have a girl
   working for me on the Modern Apprenticeship
   (MLR2 015)

Where respondents commented on the impact on staff performance in a less than enthusiastic way, they tended to think that they had these skills already. As Table 10 shows none of the respondents felt that staff performance was worse. Most felt staff performance was unchanged, or their business had so few staff that this aspect did not relate to them, or they had nothing to learn form the program because of prior experience. MLR2 018 combined a couple of these points:

   I have managed staff for 7 years that experience
   helped me with my 2 staff now. Was already
   a experienced manager had all the skills and I'm
   a good people person (MLR2 028).

Impact on Customers

Interviewees were more forthcoming about the impact on customers. Table 11 outlines the response to a set of questions relating to improvements in customer relations. Seventy-six per cent of those answering questions on customers registered positive impacts on customers after attending the program. Customer satisfaction was said to have improved, 70 register increases (76% of respondents), and customer complaints had decreased in 53 of participants pubs (62% of respondents).

   I've 'raised the game' with this pub since I took
   over and I'm always looking for new ideas and
   the course input helped (CF 007)

   I use some of the stuff from the course to help
   attract some of the old regular's back into the
   pub. Trade has increased because I've managed
   to get people back, and then keep them
   (MLR1002).

   We actually had to visit a few pubs to see what
   were good and bad standards, the course helped
   here (MLR2038).

Improved service quality since attending the program was an important factor that impacted on customer repeats and the generation of new customers. Seventy-one register increases in service quality (76% of respondents). Seventy-eight of the interviewees registered increased customer repeat visits (82% of respondents). Seventy-six of interviewees registered increases in new customers (82% of respondents). The increases in sales discussed earlier were clearly driven by these factors and supported an increase in the average spend per customer. Sixty-six of the interviewees suggested that average spend had increased (76% of respondents). CF013 made a commented echoed by others, "I improved the service by using ideas from the course". CF015 pointed to the increased average sale as being important, "Up-selling has increased this and I got that from the course". MLR1013 felt that a combination of factors had helped increases repeats from existing customers, attract new customers and increase the average spend:

   The marketing part of the course helped us
   to focus, and advertising has attracted new customers.
   We try to promote the most profitable
   lines and recommend drinks and food that
   increase the customer spend.

Other Indicators of Satisfaction

The interviewees were asked whether they would recommend the course to other licensees. Eighty-five of the 100 attendees contacted by telephone said they would recommend the program. The following statements are examples of the positive comments made those saying they would recommend the course:

   We've been running our own businesses for over
   15 years and doing this course really opened my
   eyes and I came away from the course just
   buzzing with new ideas. So I would recommend
   this course to anyone in the licensed trade new
   or 'old hand' because it makes you look at your
   business in a different way (EF007).

   To new licensees especially, it's really useful
   stuff; but people who have been in the trade
   a while could benefit, it's a 'wake up' call
   (CF 007).

   I would, anyone new to the business will be lost
   without this course (MLRI 002).

   Yes, very good I intend to send my mum and
   brother on the course (MLR 002 PD).

Willingness to recommend the program was spread consistently across the four programs.

Only 11 interviewees responded that they would not recommend the program. In the main, comments tended to suggest that the program had little to teach them because they were experienced and knew the content already:

   Didn't get that much from the course really
   (CF005).

   Not unless they were new to the pub game
   (MLR1 004).

   Unsuitable if you're already running a pub,
   plus too far away over 4 hours a day travelling
   plus the venue was a dump (MLR2005 PD).

Others were unsure, though the issue of the programs being more suitable for people new to pub retailing was common feature of the four interviewees who registered an unsure response.

   I wouldn't recommend it to someone experienced
   I would say it's useful if you are new
   to the trade (EF010PD).

   For people new to the pub trade its OK, I'm not
   sure how much use it is to experienced tenants"
   (MLR1 006).

As confirmation of the general levels of satisfaction, 66% of 98 people who responded to a question asking if they would undertake other Punch training courses confirmed that they would be interested. Most respondents mentioned courses on marketing, but other topics such as legal matters, staff recruitment and retention and general business management topics were mentioned.

   Courses on the changing legislation and
   accounting would be useful (EF 004).

   My BDM has shown me other courses and
   I'm considering these now (CF 022 PD).

   Yes, I'd like to go on an advanced marketing
   course (MLRI 016).

   Yes, absolutely anything to help me become
   a better landlord and make more profit (MLR2
   003 PD).

   We want to know when we can sign up for the
   X-Factor (MLR2 019).

Interestingly, the positive comment from MLR2 003PD is from a respondent where, according to company records, profits had reduced since the program.

Twenty-nine of the 98 respondents said they would not be interested in further training. They cited reasons that related to cost, their own experience and commitment to training as reasons for their negative response. In one or two cases, a generally negative view of company relations emerged as an influential factor:

   Punch is too expensive I would look at courses
   and try and get them cheaper (MLR2 029).

   No I'm not big on training myself (MLR2 008).

   Punch needs to get its act together in other ways
   before pushing more training courses onto
   licensees (CF 022).

A couple of respondents were unsure about undertaking other courses.

   Possibly it would depend on the course content
   really as to whether I would be interested (EF
   004).

   This would be up to my son who is taking
   the business on from me in about 6 months (CF
   015).

Benefits to the Company

Improvements in trading performance of the pub tenants and lessees represents several important benefits to the Punch Pub Company. In the first instance increasing sales volumes add to the volume of product that the company supplies to its pub tenants and lessees, which in turn increases its purchasing power with suppliers. Increasing purchasing power in turn increases potential trade discounts and thereby increases potential profits. The company's own figures show that across all four programs 783 people attended the company's programs. Of these 563 were operators in situ where it was possible to compare profits prior to attending and post-attendance. Over these operators in situ, total annual profits rose across the 563 pubs by almost 27.96%. Perhaps not surprisingly, profit growth was largest in the Customer Focus cohort because the program was associated with an investment in the pub property. Profits grew by 38.5% across the operators in situ on this program. Clearly, increases in sales and profits allow the company to negotiate improved discounts with their suppliers. The company's margins and profits increase.

Apart from the official in-company data on business performance, business values were also shown to increase in the pubs, particularly through improved food sales. Food sales performance in the company's pubs is not formally monitored. Punch does not supply food in the same way that it supplies the alcoholic and non-alcoholic beverages, food sales do however represent an important source of revenue in many of the company's pubs. Consequently, increases in food sales potentially add to the increased value of the business. In the long run, increased business values in individual pubs provide opportunities to improve company revenues through increased rentals.

By increasing tenants and lessees skills, the company is reducing the risk of business failure and thereby the need to recruit replacements is reduced. This can represent a considerable cost saving to the company. Earlier research suggests that when all the tangible and intangible costs are taken into account, the replacement of a tenant/lessee can amount to 10,000 [pounds sterling] per head. Any reduction in these costs adds to company profitability. It also builds a perception of the company as a successful pub operator that minimises the risk of failure for its tenants and lessees.

The increased perception of Punch as a pub company that operates successful pubs, with low failure rates and high levels of tenant and lessee support creates a good impression in the market place. This is likely to lead to fewer recruitment problems because there will be more good quality applicants for properties that come available. Good quality licensed retailers in the pubs adds further to business value and perception of success and a virtuous cycle is created.

Conclusion

Results from these telephone interviews suggest that there has been a general increase in the business performance of the tenants and lessees running the company's pubs. Improving, reinforcing or reconfirming the retailing skills of these tenants and lessees has produced increased sales and profits, improved customer satisfaction and added to the business values of pub businesses individually and collectively. Improving business values has, therefore, the attraction of being a win-win situation for both parties in this "franchise" relationship.

That there has been some resistance to the compulsory nature of the Modern Licensed Retailer and the Customer Focus programs is not surprising. Prior to introduction of the programs under study here, few of the company's new lessees took the voluntary programs on offer. Reference to research on other projects show that small firm owners typically are reluctant to undertake training and rarely recognise their own development needs. Apart from these motivational issues, an investment in personal development can appear to be a bigger commitment to a small firm. It is important therefore that the company continues to demonstrate that an investment in training and development results in genuine business improvement.

From the company's perspective, the franchise relationship means that the company has indirect control over the performance of the pubs in its estate. The ability to operate 4000 plus pubs as a licensed retailer--growing sales, profits and business value, is dependent on the skills talents and abilities of its franchisees operating through tenancies and leases. These interviews confirm the old adage, "if you think education is expensive, try ignorance". In this case, the cost of not training is likely to result in reduced sales and profits, lower business values, reduced customer satisfaction, increased business failures and increased resources used to recruit more tenants and lessees to the company's properties.

Table 1

Measures of Stakeholder Benefits from Training and Development Programs

Stakeholder    Suggested Measures

Retailer       Sales growth
               Profit growth
               Food business growth
               Cost reduction
               Higher sales per staff member
               Higher transaction value
               Improved relationship with company
               Improved business value
Staff          Reduced staff turnover
               Increased staff satisfaction
               Fewer days absence
Customers      Increased satisfaction
               More repeats
               Increased new customers
               Fewer complaints
Company        Increased sales
               Reduced turnover of retailers
               Increased profits
               Rental growth
               Increased purchasing power
               Improved relationships with retailers

Table 2

Sample Frame for the Telephone Survey

                                    Operators In Situ:    Sample Number
Punch Training Programme               On Programme       For Interview

X factor: sales growth programme            35             10 (28.5%)
Customer focus programme for
  refurbishment grant                      133             25(18.79%)
Modern licensed retailer for new
  entrants 2000-2001                       127             25(19.68%)
Modern licensed retailer for new
  entrants 2001-2002                       268             40 (14.92%)

Table 3

Sample Frame Including Ups and Downs

Punch Training Program     Total     Pubs showing      Pubs showing
                           sample   profit increase   profit decrease

X factor: sales growth
  program                    10            7                 3
Customer focus program
  for refurbishment
  grant                      25           21                 4
Modern licensed retailer
  for new entrants
  200-2001                   25           20                 5
Modern licensed retailer
  for new entrants
  2001-2002                  40           32                 8

Table 4

The Respondents

Time in current pub       Under 1 year     1 year and over

X factor                        3                 7
CF Program                      5                20
MLR1                            0                25
MLR2                           28                12
Time in trade             Under 1 year     1 year and over
X factor                        1                 9
CF Program                      2                23
MLR1                            0                25
MLR2                            8                32
Educational background    Post school     None since school
X factor                        0                10
CF Program                      0                25
MLR1                            0                25
MLR2                            9                31

Table 5

Comments on Impressions of the Programs

                  Positive
Program           comments   Negative comments    Mixed comments

X Factor           6 (60%)        0                   4 (40%)
Customer Focus    15 (60%)        4 (16%)             6 (24%)
MLR 1             20 (80%)        2 (8%)              3 (12%)
MLR 2             24 (60%)        8 (20%)             8 (20%)

Table 6

Negative Comments and the Personal Circumstances of Those Making Them

                                                            Personal
                                                            circum-
Negative comment                                            stances

I thought it was very good if you were a "pen pusher".      20 years
Too much paperwork and not enough (CF010) "hands on".       pub trade
                                                            experience

Predictable, with simplistic material, I don't believe      Former
it was an advanced course. It was "beginners level" just    operations
tied to refurbishment as a "bolt on goodie" to justify      manager in
your part of the investment (CF013).                        licensed
                                                            retail
                                                            business

We took on the pub in April 2002. It was due for            Undertook
refurbishment and being new we had to go on the MLR. I      MLR nine
felt that there was too much duplication of the course      months
work on the customer focus course (CF014).                  ago.

I felt that a lot was duplication form the MLR course I     Undertook
went on when I started in the pub (CF023).                  MLR 18
                                                            months
                                                            earlier.

Personally, from my point of view the course                20 years
was a complete waste of time There was basically            pub trade
nothing on it that I haven't seen before.                   experience
It's just repackaged ideas (MLR1006).

The course was very good but I felt that the level of       12 years
the material was poor. In fact I found it almost            pub trade
insulting in places. I've been in the trade for 12          experience
years and I've done lots of training with different
companies and this training was rubbish and I paid
nearly 1000 [pounds sterling] for. I mean an afternoon
on cellar training? I mean come on most courses it's a
week (MLR1 007) .

Cram too much into the two weeks, lots of studying          2 years
to do at the end of each day (MLR2 003PD) .                 pub
                                                            experience

I thought that it was a complete waste of time and money    7 years
for someone of my experience might be more use              pub trade
to a complete novice (MLR2 004PD).                          experience

Only use was to get NLC, was very dumbed down,              25 years
didn't cover enough on cellar work, promised a day          marketing
got halt day not long enough. Too much of course            management
spent addressing Punch as a company (MLR2 011).             experi-
                                                            ence,
                                                            though
                                                            this is
                                                            first pub

I thought it was a bit basic I had already been running     Graduate
the pub for 9 months, I didn't get the help I needed on
the financial side. It was skipped over lightly; spent
hours doing things that I knew. I think that it was bad
value for money at over 800 [pound sterling] (MLR2 012).

For 800 [pound sterling] I felt that it was very            10 years
expensive. I felt "blackmailed" into doing the course to    pub trade
get pub. Being experienced it was not very useful and a     experience
waste of my time. I thought that 2 weeks was too long
made this long to justify the price. Could have been
split into two groups one novice and one for
experienced (MLR2 020).

Confirmed what I had been doing for the last year.          Graduate
Some bits were ridiculously easy. Because I had             and four
a degree I found it easy. The course was too long           years pub
and I had to travel too far to the course (MLR2 023).       trade
                                                            experience

I thought I had done this course before. Some was           20 years
simplistic. A lot I already knew I got little out of the    pub trade
course for the money (MLR2 025).                            experience

Where do I start? The "Janet and John" level, the mixed     5 years as
ability group, far too long [could] have been half the      licensee
time and the money. Pressured, no, blackmailed to do the    and worked
course to get the pub (MLR2 036).                           as
                                                            consultant
                                                            in the
                                                            sector
                                                            before
                                                            that

Table 7

Actions Taken as a Result of the Program

Program            Positive action taken     Negative action taken

X Factor                   7 (70%)                  3 (30%)
Customer Focus            23 (92%)                   2 (8%)
MLR 1                     18 (72%)                  6 (24%)
MLR 2                     28 (70%)                  9 (23%)

                   Neither positive
Program            nor negative

X Factor
Customer Focus
MLR 1                      1 (4%)
MLR 2                      3 (7%)

Table 8

Reported Changes in Business Performance

                           Increase    Decrease    Stayed the Same

Sales
  X factor                     6          1               3
  Customer Focus              19                          6
  MLR1                        21                          4
  MLR 2                       35          1               3
Profits
  X factor                     7          1               2
  Customer Focus              19                          6
  MLR1                        21                          4
  MLR 2                       28          6               4
Food sales
  X factor                     4                          3
  Customer Focus              15                          5
  MLR1                        12                          4
  MLR 2                       25                          5
Cost reduction
  X factor                     7                          2
  Customer Focus              13                          4
  MLR1                        17                          5
  MLR 2                       30                          6
Sales per staff member
  X factor                     6                          4
  Customer Focus              10                          5
  MLR1                        14                          6
  MLR 2                       18          2               4
Transaction value
  X factor                     5                          4
  Customer Focus              15                          5
  MLR1                        20                          4
  MLR 2                       21                          4
Business value
  X factor                     6                          4
  Customer Focus              19                          4
  MLR1                        17                          4
  MLR 2                       23                          4

Table 9

Relationship with the Company after the Program

Program             Positive     Negative

X Factor               2
Customer Focus         7
MLR 1                  1
MLR 2                  3            2

Program             NoChange

X Factor                8
Customer Focus         18
MLR 1                  24
MLR 2                  35

Table 10

Reported Impact on Staff Performance and Satisfaction

                          Increase     Decrease     Same

Staff satisfaction
  X factor                    5                       5
  Customer Focus             10                      15
  MLR1                        4                      15
  MLR 2                      16                      15
Staff relationship with customers
  X factor                    6                       4
  Customer Focus             10                      15
  MLR1                        4                      15
  MLR 2                      16                      15
Staff relationship with you
  X factor                    6                       4
  Customer Focus             10                      15
  MLR1                        4                      15
  MLR 2                      15                      15
Staff morale
  X factor                    6                       4
  Customer Focus             10                      15
  MLR1                        5                      13
  MLR 2                      18                      15
Staff retention
  X factor                    2                       8
  Customer Focus              3                      20
  MLR1                        3                      15
  MLR 2                      13                      10
Staff absence
  X factor                    4                       6
  Customer Focus              3                      20
  MLR1                        3                      16
  MLR 2                      12                      20
General performance
  X factor                    7                       3
  Customer Focus              8                      15
  MLR1                        5                      14
  MLR 2                      16                      14

Table 11

Impact on Customer


                          Increase     Decrease     Same

Customer satisfaction
  X factor                    7                       3
  Customer Focus             18                       6
  MLR1                       21                       4
  MLR 2                      24                       9
Customer complaints
  X factor                                            8
  Customer Focus                                      5
  MLR1                                                5
  MLR 2                                              11
Level of service quality
  X factor                    7                       3
  Customer Focus             20                       4
  MLR1                       21                       4
  MLR 2                      23                      10
Repeats by existing customers
  X factor                    7                       3
  Customer Focus             21                       4
  MLR1                       23                       2
  MLR 2                      27                       7
New customer visits
  X factor                    7                       3
  Customer Focus             20                       5
  MLR1                       22                       2
  MLR 2                      27                       7
Average spend
  X factor                    6                       4
  Customer Focus             19                       6
  MLR1                       21                       3
  MLR 2                      20                       8

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Correspondence

Conrad Lashley, Centre for Leisure Retailing, Nottingham Business School, Nottingham, United Kingdom Email: ConradLashley@aol.com