SPORTSCLUB MANAGEMENT
Bouncing back Gearing up for the next challenge •
P A S T, P R E S E N T A N D F U T U R E
– 20
YEARS OF CLUBL AND WITH CGA
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The wait is finally over, as we step boldly out of 2020 into a brave new vaccine-centric 2021 As the constituent parts of the UK endure the latest COVID -19 lockdown, Club Mirror examines the facts and figures of what this might mean for Clubland. With the help of the UK's leading industry statisticians and analysts, CGA, we chart influences and changes since 2000, right up to the first lockdown in March 2020 and ask, what comes next for the club sector? CGA Strategy’s consultant Ashley Cairns is a club man through and through, with parents and grandparents who held positions variously as Steward, Treasurer, Secretary and Chairman. The COVID -19 crisis has obviously been the biggest shock to challenge the on trade for at least 30 years and perhaps ever, he points out, with lengthy enforced closures for many in the Clubland arena. But Clubland has been far from idle, he says, with many clubs focusing their attentions on serving their local communities: “Social welfare contact; foodbanks; supporting services; meals and drinks delivery; help for the NHS and many other acts have been established in Clubland,” he says. “This is to the absolute credit of the trade and will be recognised by customers in the future.” It’s unlikely the full impact of COVID -19 will be known anytime soon, predicts CGA, and the longer-term impact for the on-trade as a whole may not be ‘robustly established’ until 2022. What is sure, however, is that this will be a benchmark point for Clubland and the on-trade going forward. What is also certain, is that the consumer will remain very much king, and clubs will need to work even harder to ensure that they truly understand what members want – and what they are prepared to pay for. So while the world around us changes, so too will clubs, having proven throughout the sector's history that they can adapt quickly, proactively and independently. Resilience, innovation and commitment will be key for 2021 – familiar, cherished words in Clubland, along with ingenuity, community, pan-generational and inclusivity.
Caroline Scoular Editor, Club Mirror Editor Caroline Scoular Design David Foster Events Jill Slingsby, Karen Foreman, Guy Brennan Display Advertising Margaret Doherty Sales and Marketing Manager Leigh-Ann Ogilvie Circulation Jon Hardy Accounts Andrew Soles Publishing Director Sean Ferris
Club Mirror is published by Alchemy Contract Publishing Ltd, Gainsborough House, 59/60 Thames Street, Windsor SW4 1TX. Tel: 01753 272022. Fax: 01753 272 021 Email: caroline@clubmirror.com; sean@clubmirror.com; info@clubmirror.com
ACP Gainsborough House 59/60 Thames Street Windsor Berkshire SL4 1TX UK t. +44 (0)1753 272022 f. +44 (0)1753 272021 e.info@alchemycontractpublishing.co.uk www.alchemycontractpublishing.co.uk The views expressed in this journal are not necessarily those of the publisher. Club Mirror does not verify the claims made by advertisers regarding their products. CLUB MIRROR 3
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STATE OF THE NATION
The years gone by and the years ahead
Goodbye 2020; hello 2021! Clubland has faced some interesting challenges over the year, along with the rest of the hospitality sector. Market research expert Ashley Cairns of CGA looks to the past and then towards the future.
C
lubs are well known to me. I’ve had an affiliation with them for 60 years. Firstly this was through my Grandparents; one was the steward of a Royal British Legion and the other a senior member of the local Football Club (long-term Treasurer and Secretary) as well as the Bowls club. My Dad was also a long-term member and participant, including once again a football club (albeit a different one) where he was Chairman of the Supporters Club and several other local clubs. He also acted as the Licensed Victuallers Association Secretary, so was known to most pubs. Add to this his role as a local journalist and it’s a fact that most clubs, restaurants and hotels in the local area also knew him. The 70s, 80s and 90s In the 70s, from the eyes of this scribe, the trade was
very unified and working well together. People from Clubland, pub tenants, hotels and restaurants had strong interrelationships and, because of that, the on-trade was united while still being highly competitive. In the mid-80s that all changed, as many will remember, and by the 90s the trade moved into its new form, thanks to the Supply of Beer Act 1989. This major exogenous shock took around 10 years to really bed in. And now? The trade has taken much on board over the last 30 years to adapt to the new landscape. And it will continue to adapt to conditions brought about by COVID-19. The pandemic has obviously been the biggest shock to challenge the on-trade for at least 30 years and perhaps ever. There are inevitably going to be
winners and losers.I am sure most of us will hope that the on-trade overall is going to recover. As we are in the midst of the crisis, the unknowable answer right now, is: ‘When will we be able to get back to something approaching normality in the on-trade?’ The on-trade The on-trade is, of course, long established. Clubs became a defined entity in their current guise in the early 1900s. Pubs and gotels have a longer history as do restaurants, with nightclubs coming along in the 1960s in the Potteries (the Stoke on Trent area). The structure has remained like this over the last 20 years. What we have seen throughout is inventiveness, new styles and offerings as well as adaptation of existing businesses, all of this in response tochanged consumer demands. It is a singular fact that the “Consumer is King”
CLUB MIROR 5
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STATE OF THE NATION
and it is essential that any premise needs to know what their customers want and precisedly what they are prepared to pay for. Premise universe and trends: from 2000 March 2020 For the purpose of this Clubland article, the analysis looks at the last 20 years of market research from 2000 up to March 2020. It is to be expected that the full impact of COVID-19 will not be known until possibly the end of 2021. The longer-term impact for the on-trade as a whole may not be robustly established until 2022. So where did the market ‘pause’ ahead of the pandemic and the consequent restrictions? This will be the benchmark point for the on-trade and Clubland going forward. Over time we can see that member clubs have slipped in terms of premises numbers. The biggest change is for restaurants and – broadly across the trade – the provision of catered food. Clubland – the numbers In the GB on-trade, going back to the turn of the century, there were 140,913 premises trading. Within this 29,210 were member clubs. Further classification enables a specific number of 28,364 of which 19,213 were Social Clubs and 9,151 Sports Clubs. Social v Sports Over the intervening 20 years, Social Clubs have seen the universe drop by 3.1% per annum to 10,446 in March 2020. This compares favourably against the pub trade which has seen a drop of 19,578 in the same period Sports Clubs have risen by 0.35% per annum
.
to 9,834. What is not as obvious is that there has been substantial change within those current universe numbers. On the surface, as can be seen in the chart, the decline is sizeable for the Social Club channel. But there is a dynamic underneath the headline in that while the Social Club channel has seen many closures, this is offset by the emergence of 2,073 new clubs. Sports Clubs have been less affected on first viewing but the in-depth analysis shows the reality. Sports Clubs are an extremely dynamic channel, where, over the last 20 years, there were 2,550 closures and 3,114 new club openings. There are many reasons for the trend, but the leading ones are as follows:
Sports Clubs share of Clubland
• House building on urban locations leading to relocation • Amalgamation with new sites • Consumer demand for sporting facilities • Provision of improved services to members For completeness there have been 264 movements between the two club types. Popularity of sport remains one of the great pastimes or participatory events in people’s social calendars. The fundamental difference between the Social and Sports Clubs is activity at the core. The two club types have meeting up and being together socially as the commonality but the motivation is the key difference. The sports angle is much
SOURCE: CGA OUTLET INDEX
Scotland
North East
Yorks & Humber
North West
East Midlands
West Midlands
Wales
South West
East of England
South East
London
52%
21%
27%
27%
30%
29%
33%
34%
36%
34%
28%
69%
31%
39%
41%
44%
44%
48%
51%
52%
55%
46%
6 CLUB MIRROR
more inclusive as it spans all age ranges and to a degree social grade. As can be seen below there are undoubted trends regionally. In southern areas, Sports Clubs are becoming more popular than Social Clubs, while in Scotland, Sports Clubs were already more popular in 2000 and are even more so in 2020. The above chart highlights the key areas of decline for Social Clubs, being generally where heavy industrial and manufacturing work was the key employer. That does align strongly with the loss of works’ clubs as the businesses ceased operating locally or supporting peripheral activities. The North West and South East show the starkest decline in pure number of clubs. COVID-19 impact Over the course of the last nine months of 2020 the nation has seen long-term enforced closure for many in the Clubland arena. Plenty of entities though, as has been widely reported, have been far from idle during the periods of forced closure and have turned their attentions to the needs of members and non-members away from the club. Social welfare contact; foodbanks; supporting services; food and drinks delivery; help for NHS and many other acts have been established in Clubland as well as other parts of the on-trade and hospitality widely. This is to the absolute credit of the trade and will be recognised by customers in the future. It is though, without question, that wet-led outlets have seen their core business most severely compromised. Support has been given but as to whether it was enough is truly unknown for now. Protestations are inevitable when appealing for help, but the ontrade is imbued with people who hold a very positive nature and intent. Clubland has undoubtedly SCORED very highly with customers and non-users during the pandemic, probably only a little behind the NHS, so in this respect will win through because they deployed the following aplenty: • • • • • •
A structured establishment A caring intent An organised approach Resilience and resourcefulness An enterprising attitude Determination
March 2020 Universe under Covid-19 restrictions as at 2nd December 2020 Source: CGA Outlet Index March 2020
Country
England
version
Clubs
Tier 1
347
Tier 2
9,206
Tier 3
7,275
Wa1
1,422
Country
version
Clubs
Tier 1
160
Tier 2
409
Tier 3
704
Tier 4
719
Scotland Wales
COVID-19 Universe update As it stood, at the end of the first week in December 2020, Clubland had the majority of its premises under the most punitive restrictive conditions. This is based on the broadest assumption which is, the sale by retail of drinks alone, as the critical service provision of Clubland. It is essential that the sale of drink in a purely social environment returns to help Clubland regain its commercial stability. As can be seen below, 97.5% of Clubland was under restrictions that make social drinking unlawful. At the beginning of writing this article it was broadly thought the pandemic would subside, particularly through remedial actions, like the vaccines. As such, the virus seemed less likely to create the chaos in the NHS that would cause national distress. In the third week of December that outlook had to be changed with the announcement of a new variant. It is still expected that the vaccine developments will remain effective so the long-term view remains. What has changed is the discovery of a new strain, which has a faster transmission rate. To counter this, the UK Government then introduced a more stringent regime with a Tier 4 status in
England. Tier 4 made little change for the on-trade in terms of trading but did for the population with more severe movement restrictions. And, of course, this has since translated into a further lockdown. The table below shows the impact of the increased restrictions as at December 26, 2020. The impact of the tougher restrictions brought in following the discovery of the new strain of COVID19 saw the effectively closed universe rise from 50% on December 2 to 85% as at December 24. However, clubs have been resilient and resourceful when it comes to reconfiguring their operations. Many clubs have examined their finances very closely and, where membership is substantial, some clubs have needed to do little, other than to batten down the hatches and ride out the storm. Those are perhaps the fortunate ones. There are plenty like that within Clubland who are well assured of coming out the other side almost unchanged. Perhaps more common are clubs that operate to their old licensing term, namely, “not for profit”. These clubs have generally had to utilise all the grants, possibly loans and occasionally altruistic gifts, to maintain themselves.
March 2020 Universe under Covid-19 restrictions as at 26th December 2020 Source: CGA Outlet Index March 2020
Country
version
Clubs
version
Clubs
Tier 1
2
Tier 0
0
Tier 2
3,122
Tier 1
0
Scotland
England
Wales
Country
Tier 3
7,931
Tier 2
0
Tier 4
5,773
Tier 3
95
Wa1
1,422
Tier 4
1,897
CLUB MIRROR 7
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STATE OF THE NATION
Where are we going? Whatever situation a club finds itself in, their future will very much depend on how members behave. Clubs can and will be returning to trading and will succeed or fail based on how they serve their members, attract new ones, and manage their finances. That may sound very familiar – because it is! It is what the winners of the Turnaround Award at the
8 CLUB MIRROR
Club Mirror Awards do year in, year out (and the 2021 awards will be open to all 21,000-plus clubs in Clubland). This is where the hospitality industry, in its broadest sense, to the specialist channel like Clubland will find itself, by general consensus, at the mid-point of 2021 when the “new normal” will begin. Lastly, it was famously said that “forecasting is
very difficult, especially when predicting the future”. That is an undoubted truism, but one is never too shy of having a go! The next decade will be one of significant change. That is a given with such things as climate change; the changing nature of the workplace; developing economies; entertainment; health and security each having an effect on Clubland. The important – in fact, utterly essential requirement – is to plan, plan and then plan again to ensure what you do is right and that it will meet members’ needs and that you can make sufficient revenue to reinvest in the club, keeping it at the top of its mark. Remember, competition is not only local pubs or a Wetherspoon in town, but the foreign holiday, amusement park or a member’s front room. What consumers want will change, so keep in touch, stay at their front of mind, and exceed their expectations at every possible occasion. That is the baseline at which clubs will have to operate going forward. A chance conversation this week with a friend who advises and works for clubs and pubs was quite reassuring. We discussed where the on-trade will go and we absolutely agreed the big positive is pent up demand in consumers. People want to get back to clubs and that is such a great starting point that will help us all greatly. As my friend went on to say, we could soon be experiencing a new “Roarin’ 20s”. Let’s hope so. Here’s to a positive 2021 for the UK’s unique, irrepaceable Clubland!
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