Recession just small beer for UK pub chain

FRIDAY INTERVIEW:Tim Martin, chairman, JD Wetherspoon

SHAGGY-HAIRED, casually-dressed, and with a mug of coffee in hand, Tim Martin sits in the Metropolitan bar in Marylebone in London, looking for all the world a surfer. For once, the image is not deceptive; Martin has reawakened his interest in waves in his early 50s.

Raised in Shantallow in Derry, Martin took up surfing as a young boy during six idyllic years in New Zealand after his father, Ray, who worked with Guinness, was transferred to the Antipodes when Martin was nine.

On his return to Northern Ireland, this time to Belfast, in 1970, Martin abandoned the sport, only to take it up again at the age of 52 from his home in Devon – a home he sees just at weekends because of his duties as chairman of JD Wetherspoon.

“It was just too cold for it in Northern Ireland. Even in New Zealand, in the winter, we didn’t surf. While there were such things as wet-suits, they didn’t seem to keep you warm, so we just chucked it in.

“Now, you can surf any time you like and you don’t get cold. I last surfed in 1969 and I took it up again in April 2007 at 52. It is too late to call it a mid-life crisis, but I reckon it is the longest non-surfing gap in history,” he said, with a thunderous laugh.

“It is only recently that I have discovered that the west coast of Ireland has better surfing than anywhere else. I haven’t been back there to surf, but we used to go there as kids, because my grandfather used to fish,” he says.

The return to the North, then mired in some of the worst days of the Troubles, was a culture shock: “When we came back to Belfast, as far as anyone was concerned, I was a Kiwi, which suited me just fine.

“After living on the beach for years in New Zealand, Northern Ireland seemed, how I can put it for an Irish audience without offending anybody there,” he pauses, before adding, “like a less-friendly climate.

“When we came back, we lived in Newtownards Road, near Stormont. I went to Campbell College at 15 for the last three years of my education,” says Martin, “but I would say that I am a hybrid: a third New Zealander, a third Irish and a third English.”

In his early 20s, Martin founded the JD Wetherspoon chain of pubs – named after one of his teachers in New Zealand – in London, with others following quickly.

Although the original pubs have long since been sold off, JD Wetherspoon today has 800 outlets, and is soon to add 50 more, employing 24,000 people.

Turnover this year will top the £1 billion mark “with £420 million of that going in taxes of one kind or another”, says Martin. Taxes are often on his mind: “We have done pretty well. Last year had record profits despite the problems. It is difficult to deal with the new taxes imposed on business to pay for the mayhem in the banks in Britain.”

VAT has gone up, so too have excise duties: “Just this year alone, in the UK, there has been a 15-20p increase for customers for the same pint and no extra money for the publican. So far, sales have been relatively resilient.”

Unlike some pub chains, Wetherspoon’s reserves allow it to invest in its pubs – while others have struggled with gargantuan debt mountains created by leveraged buy-outs.

Debt and lack of investment elsewhere has accelerated the drift away from pubs: “There are lots of run-down pubs in Britain. Going to a pub is partly habitual, if people get out of the habit, which some young people have, it can have a bad effect.”

Having said that, Martin, who now spends more than two weeks a month visiting his far-flung empire, believes pubs have a future, even those in small villages: “People still like to go out. We can’t stay in the house all bloody day.

“People like pubs. So if you have got a good pub company which hasn’t got too much debt which owns a pub in a village and rents it at a reasonable rate to a tenant and invests sufficiently in the building, people will like to go out to that pub,” he goes on.

However, Wetherspoon is a chain, and sometimes the public do not like chains: “I think that customers like individuality and community and personality. In a way, they don’t like chains and they certainly don’t like the word ‘brand’.

“But they don’t mind if a pub is part of a bigger company provided the company respects the need for individuality,” he says, quoting the success of Fullers and Youngs in London which offers good beer and does not impose “too corporate an identity” on a pub.

Looking around the Metropolitan, Martin says Wetherspoon is “somewhere in between” companies like Fullers and O’Neill’s Irish Bars.

“We have won a lot of design awards over the years for restoring the Opera House in Tunbridge House, leaving the name. We give pubs a local connection. So I think we are not O’Neill’s Irish Bars, where everything is the same.”

Speaking of Ireland, Wetherspoon has nine pubs in Northern Ireland, which Martin visits once every three months. The pub trade there has been more sharply affected by competition from supermarkets than in Britain, he says.

Tesco and Sainsbury and the other multiples, frightened off by the Troubles, were slow to invest in Northern Ireland, but “once they got going there” they opened up very quickly: “The trade there generally has dropped a lot.”

Wetherspoon looked at setting up in the Republic, even buying a premises in Temple Bar: “I never went over there to have a look, but it was bought for a vast amount and it was to be a vast amount to do it up.

“Then, property prices started doubling, or tripling, or whatever they did and we thought that we were going to end up with having just one pub, so we retreated. We sold the place we had before we opened it. Quite wise, really, it could have been a life-saver.”

Besides a life-long interest in pubs, Martin has been a vocal critic of the euro, and argues for Ireland’s departure from it as quickly as possible: “From the little I know, it seems the Irish seem more pro-Europe than the British. They attribute their great success [in recent] times to Europe but it wasn’t because of that. It was because of other things that were happening. I hope to God someone in Ireland is saying, ‘Get the hell out of the euro, at whatever cost, just get out’.”

Rejecting the tag of Eurosceptic, he says: “I have nothing against Europeans at all. They play better football than us, they have better beaches than we do, but this currency is as bad for them as it is bad for us.

“It is utter economic illiteracy. Are Ebbw Vale in Wales and Kensington in London the same? Or Ebbw Vale and Cardiff? The deal is that you and I pay our taxes and a certain amount of that money flows to Ebbw Vale, but that doesn’t happen with the euro,” he insists.

Ireland’s situation will get worse as interest rates rise to cope with Germany’s economic boom: “Rates are starting to go up when you don’t need them to go up. There is no point going down with the ship; if the ship is going to founder anyway, that has to be faced.”

Martin does not believe Ireland could have stopped its property bubble by local taxes: “There aren’t many examples of property bubbles being stymied by levers other than very high interest rates.”

Though passionate about the euro, he quickly returns to pubs: “I feel we could double in size. I’m optimistic that we can have another 800 pubs: one for 40,000 of the population, which doesn’t seem excessive, all things being well.

“The trick is just to keep on doing what we are doing,” says Martin, “I don’t know why, but, yes, I am still as enthused about this business as I was when I first started. I grew up being familiar with the pub world and particularly with the brewing world.”

On the record

Name: Tim Martin

Age: 56

Job: Founder and chairman of the JD Wetherspoons pub chain

Lives: Exeter, Devon

Hobbies: Surfing, visiting his chain's pubs

Something you might expect: Enjoys beer

Something you might not expect: Pays for his drinks when drinking in a Wetherspoon's pub.