Heineken pub business to spend £38 million revamping ‘premium locals’ for work-from-home economy

by Jonathan Adams

In a further sign big business is convinced work-from-home patterns established over the course of the Covid-19 pandemic will not return to their previous status quo, Star Pubs and Bars, the pubs business of multinational beer company Heineken, is to invest £38 million revamping its UK establishments. The plan is to revamp many of the 2500 pubs and bars the business owns across the UK as “premium locals” designed to tap into the growing market in and around residential areas.

Traditionally, many of the company’s best performing locations targeted the after-work office crowd. Most of those customers have been working from home since March last year. While some companies are pushing for a full return to the office, a significant portion, if not the majority, of white-collar workers are now expected to continue to do so. At least, as part of a new hybrid model that will see them split their time between days at home and days in the company office.

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Heineken is betting on that by investing in 700 pubs and bars across the UK located within ten minutes walk of large residential catchment areas. Of those, at least 80 will see between £125,000 and £400,000 spent on sprucing them up to appeal to those keen to swap after-work drinks with colleagues for meals and drinks with family and friends after a day at work in their home offices. The brewer said each refurbishment project will be tailored to the particular pub or bar and its location.

500 new jobs are expected to be created across the Star Pubs and Bars estate due to the introduction of food options or menus being improved at those that already served food. The focus will be on making interiors more comfortable and stylish and upgrading and extending beer gardens. More premium coffee, soft drink and alcoholic beverages brands and options will be added. As a result, the share of income contributed by food sales is expected to rise to 30%.

Star Pubs and Bars managing director Lawson Mountstevens commented:

“Many people have rediscovered the joy of their neighbourhood pub between lockdowns over the last year and are opting to stay local. This investment responds to that demand.”

“The pandemic has shown the resilience of the great British pub and especially the leased and tenanted model. We’re committed to building on that support with refurbishments, so that pubs around the country thrive for the long term.”

Most of the 2500 venues owned by the company are leased to small businesses that were assisted through the pandemic by £62 million in rent reductions.

Heineken, whose share price has gained around 19% over the past year but is still down almost 11% on its pre-pandemic levels, is the world’s second largest brewer. It owns over 300 beer and cider brands including Bulmers, Foster’s and Amstel. Sales were hit by the pandemic with the boost to sales from shops and supermarkets not enough to compensate for the lost trade from pubs, bars and restaurants.

In February, Heineken said it would cut 8000 jobs over the next two years as it pursues savings of $2 billion. 100 of those positions were based in the UK.

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