Corporate purpose

How culture drove Admiral Taverns’ response to Covid-19

Shortlisted: Best embodiment of corporate purpose
CovidComms Awards 2020

Chris Jowsey does not claim credit for the culture that exists within Admiral Taverns. Joining as chief executive in July 2019, following an 18-year career in the drinks industry, he discovered a community pub group with values developed collectively and an operating model akin to a family-run business. It meant that, when news emerged of the first national lockdown, there was never any doubt that the licensees would come first.

Indeed, within hours of Boris Johnson’s announcement on 20 March 2020 that pubs, clubs and restaurants should close that evening, Jowsey held a board meeting to discuss what Admiral Taverns could do in terms of rent for the landlords of its 1,000-pub estate.

It concluded with the unanimous decision that Admiral Taverns would forgo rents until the end of April 2020. ‘We knew what that would cost us, and we knew we could withstand that. The only problem was that we didn’t know how long it would go on for at that point,’ says Jowsey, adding: ‘I won’t pretend there wasn’t a debate at the board meeting, but by the end we were united. And by the weekend, we confirmed the news to everybody via the website. Look, don’t worry. Get yourselves organised. Close your business in the right way, do the right things, and we will make sure you don’t have any bills to pay in the next six weeks. And then we will review where we go from there.

Admiral Taverns was the only pub company to totally cancel rents for its tenants. Other companies introduced discounts and subsidies. The key factor was, according to Jowsey, to remove any uncertainty. ‘It was about reassurance. We didn’t want tenants panicking because, if you think about it, it is their home as well as their business,’ he explains. ‘So, we said Look, we will cancel all rents for just under six weeks [until the end of April] and that will give everybody the chance to settle down, what out what is happening and, most importantly, get access to the government grants that were being talked about. It allowed our licensees to plan and make decisions based on good and full information, rather than trying to second guess what we would do. We were up front with them.

‘It will cost us, but it will no doubt cost them. But we’re going to make the first gesture and demonstrate that our behaviour through this, however long it will be, will be the right behaviour rather than the wrong one.’

While Admiral Taverns does not have a stated corporate purpose, per se, Jowsey says that the business talks about ‘converting great relationships into great performance’. He adds: ‘Our purpose really is to set up and operate with our partners the best community pubs that we possibly can in the most sustainable way. We’re a pub company that mixes property, operations and support and has a real sense that pubs will only work if they are part of the community and loved by the community. Our mission is to get the right people with that kind of mentality into our pubs and to help them make the most of their pubs.’

It will cost us, but it will no doubt cost our landlords. But we’re going to make the first gesture and demonstrate that our behaviour through this, however long it will be, will be the right behaviour rather than the wrong one

He adds: ‘The culture of the business is quite self-regulating. People just get it. And, if they don’t get it, they leave pretty quickly. If they step out of the culture in a negative way, then people just bring them back into line. It’s not my job to do that, and nor do I need to. It’s a really good place to work in that sense.’

Each pub, which Jowsey describes as ‘proper locals in neighbourhoods where most customers come from within half a mile’s walking distance’, is viewed as a small enterprise, run by its owner who works with Admiral Taverns to create the best business that they can. They are also predominantly wet pubs; just ten per cent of the estate take more than £1,000 a week on food. It meant that many did not have the ability to pivot to serving take away food or, later, to benefit from the Eat Out to Help Out scheme.

Admiral Taverns works to ‘support and enable’ its licensees, and its ethos is underpinned by five values: We are Admiral, We Deliver, We Care, We Dream Big and We Are One. ‘The licensees that are most engaged and motivated are the ones working for themselves and their communities. We didn’t want them to have any debt because, and this is important, I didn’t want them thinking I’m only working to pay Chris back. When they work for themselves, they’ll be at their best.’

But Jowsey is also clear that Admiral Taverns is a commercial business. ‘I often say to licensees that we’re not a charity. I run a business here and I have to make a profit, and if I don’t then I’ll be gone, and the business will be gone and that won’t help you guys. There has to be balance. We have to turn a profit, but we can do it in the right way,’ he explains. ‘You can fix stuff really easily in the short-term, but eventually it comes back to bite you. What is important is our reputation, in the trade and beyond that, as an organisation that acts fairly. That helps us recruit new licensees. It helps us retain existing licensees. And, overall, it works for us commercially. It’s quite a close-knit industry. People know what’s going on, and there are very few secrets.’

Indeed, Admiral Taverns’ conduct through the crisis has been reflected in increased enquiries from potential licensees looking to run one of its pubs: in July 2020, enquiries were up 156 per cent compared to a year earlier, with 500 requests for information.

What is important is our reputation, in the trade and beyond that, as an organisation that acts fairly

Admiral Taverns also worked closely with its licensees to ensure they received available grants speedily. But while some councils paid out the funds within a fortnight, others were more tardy. ‘The performance was vastly different among councils. We worked with our trade bodies to measure that performance, and then put pressure on the slow paying councils, via their local MPs,’ explains Jowsey. ‘Then we had a run of about 12 to 15 licensees where they were really struggling to get any monies, so we got involved with their councils and MPs and they paid up. Otherwise, those pubs would have gone bust.’

Such was the clarity and transparency of Admiral Taverns’ approach to communicating and supporting its licensees that it was cited by government regulator, the Pubs Code Adjudicator, which applauded the group for ‘leading the regulated industry’ in providing information on how it would support its tenanted landlords. And that it had done so without any prompting. ‘I could do as much self-promotion as I like, but if somebody else is saying good things about you, like this, it’s worth twice as much,’ says Jowsey.

He adds: ‘I was talking to Emma McClarkin [chief executive of trade body, the British Beer & Pub Association] and she said Look, you’re the only company that talks to me about individual licensees and asks us to get involved. Everybody was lobbying, as you’d expect, but we thought we had to do something for the individuals as well as our overall business.’

The praise for its communications was particularly welcome. On 1 April, Admiral Taverns furloughed 70 per cent of its employees as it acted to save cash, leaving a working group of 30 people to co-ordinate with all its licensees as well as work with trade bodies, councils and other officials. ‘It was a challenge. We hit every channel. We were using our website. We were texting licensees but, if they had email, we’d use that. We used Facebook and Twitter. We spoke to the trade publications. We just did anything we could think of to get our messages through,’ adds Jowsey.

‘Our business development managers started using Zoom with their licensees, so you might have 20 from the same area all in the same boat and they start to share ideas. We had licensees pivot their businesses, getting into food deliveries, say, or other areas they had never dreamed of, prompted by another licensee rather than us. It just made it more powerful. The lovely thing about lockdown, if you can say that, is that we have so many more means of communications, and more informal ways in which licensees can talk to and help each other.’

Jowsey also hosted a weekly business update on Zoom for furloughed staff. On one week he would share all the necessary news and information and on the alternate weeks he and his team would answer questions. ‘It broke down lots of barriers. We had online yoga, online drinks on Friday evenings… all sorts of things. When they saw me in a track suit in a cricket club, they saw that the chief executive is just like everybody else. Everybody was being themselves. Authenticity really came through.’

With their concerns partially alleviated by Admiral Tavern’s approach, many landlords refurbished their pubs during the first lock down as well as working to support their local communities, by fundraising, doing shopping for people and even feeding them. ‘Because we had given them reassurance, they were confident enough to invest in their pubs and communities. It was a kind of virtuous circle.’

By the middle of April, however, Admiral Taverns also gave their licensees fair warning that it would reintroduce rent payments after the six-week rent-free period but that this would be done in a way in that was both affordable and fair. ‘We capped it. And we had a formula for working out how much grant they had received and what we believed they could afford to pay,’ explains Jowsey. ‘The response was really positive. There were one or two death threats, as you’d expect, but the majority said that we had done our bit and that they accepted some of their grant was to go towards rent.’

As the first lockdown eased, Admiral Taverns created an online guide, Rising from Lockdown, to help licensees successfully re-open their pubs and make it work in an era of social distancing. It also hosted webinars in association with industry partner Pub and Bar Academy, which were attended by more than 200 licensees.

As most pubs reopened, they found that they benefited from their suburban settings. From July until September 2020, when restrictions were re-imposed, sales were 100 per cent of what they had been in the previous year. Admiral Taverns outperformed its competitors. ‘I’m absolutely convinced that one of the major reasons for our outperformance was the way we treated our licensees during that lockdown. It’s nice to be nice, but it also works commercially,’ says Jowsey. ‘But people also felt more comfortable in their neighbourhoods. They were uncomfortable going into city centres on public transport. I think we have also benefited from some of those longer-term trends around working from home. People aren’t going to commute as much in the future. I think that will support our licensees.’

While their regulars certainly returned, many licensees also reported seeing new faces who have subsequently turned into regulars. Jowsey believes this is partly to do with the refurbishments that many pubs underwent during lockdown, investing in their interiors and gardens. ‘People went into their local in July and thought This is nice, why don’t we come here more? And they were really welcomed because people were desperate for them to come back.’

When the second lockdown was announced, staff were put back on furlough – although without the top up that they had previously enjoyed. ‘We can’t afford it this time. And all my team and myself have taken a voluntary reduction because we can’t expect people to do it and not do it ourselves,’ adds Jowsey.

And now, of course, Britain is in the grips of a third – a longer – lockdown. Admiral Taverns had continued to lobby politicians in support of its licensees and is ‘in no doubt’ that its intensive lobbying led to the one-off grants to the hospitality industry. It is currently working with licensees to help those experiencing difficulties accessing this support and also negotiating with many of their suppliers, such as brewers and satellite broadcasters, about credits. And it continues to subsidise rents as fairly and transparently as possible, with all details on its website.

‘This business is as close to a family business as I have ever seen,’ concludes Jowsey. ‘They are genuinely focused on licensees first and foremost – the principle being that, if the licensee is successful and working well, then we will benefit. We’re bound to win. And the most reassuring thing we could say to our licensees was that we’re in this together.’