Is bigger always better?

Ahead of entering the new BrewDog bar in Waterloo my expectations of it being busy were low as
I knew the paint had only just dried on the place and that it was of vast proportions. I
underestimated both its size and the number of people guzzling beers and cocktails on this rainy
Thursday in early September.

I was in fact taken aback by the sheer number of people. Having gone from a comparatively sedate
concourse on Waterloo train station it felt like I had entered a parallel universe of behemoth
proportions filled with crowds of people (some staggering around), and much noise. At around
27,000 sq ft spread across two floors I lost my friend twice in the space of half an hour as we
wandered from bar to bar passing an indoor slide, ice cream van, ten pin bowling alley, on-site
brewery, podcast studio, meeting rooms, co-working space, coffee shop, florist, and a secret
cocktail bar, which needless to say I failed to locate. It looked to be a rip-roaring success of a launch judging by my initial experience but when I relayed this to one of the bar’s managers he laughed and said it needed to be twice as busy to be profitable. I’ve no idea what it would be like with that number of customers inside the place and I don’t intend to find out.

It’s fair to say I’m no longer BrewDog’s target customer – either I’ve outgrown it or it has
outgrown me. I suspect it is the latter, judging by the vastness of BrewDog Waterloo. This new
venue is the biggest pub in the UK and is yet another example of how the company likes to be top
dog. But any drive to be the biggest can often lead to hubris. The pub usurps the JD Wetherspoon
boozer, the Royal Victoria Pavilion in Ramsgate, that I visited during the summer and although that
undoubtedly felt vast – it measures a not insubstantial 11,000 sq ft – it did not feel out of kilter
with many other large Wetherspoon’s pubs I’ve visited in recent years as the company has
increasingly focused on larger venues.

The new BrewDog certainly feels like a hefty step up in magnitude for the group and I can’t help
but wonder whether it represents the Waterloo for cavernous pubs. Are there enough people with
a desire to frequent these massive (often impersonal) venues with any sort of regularity?
Wethersoon’s is certainly finding it tough to get the pre-covid-19 volumes back in many of its
venues. There are clearly a number of different factors at play – including the recessionary
economic backdrop, the cost of living crisis, the ongoing staff shortages, more consumers eating
and drinking at home, and the crippling level of utility charges.

Are we heading into a period when smaller venues take precedence over their larger compatriots?
Interestingly in the residential sector the demand for smaller rental properties has been rising
compared with a reduction in appetite for larger homes, according to Zoopla, which says a major
factor is the cost of heating. Two-bedroom flats have seen inquiries jump to 35.5% from 29.8% in
2020 versus three-bedroom houses that have seen inquiries fall to 12.1% from 15.9%. The cost to
heat these houses is around 40% more than for the flats.

Some evidence of a scaling back in space requirements can be seen in the hospitality industry
where the dining rooms of many QSR brands are being reduced in size – partly driven by more
people choosing home delivery, click & collect and Drive Thru options.

Meanwhile at the smarter end of the market chef Alex Dilling has taken on the job of head chef at the Hotel Café Royal with a reduced number of covers of only 34 and limiting booking times to between 7pm and 8:30pm in his dining room. He has expressed great relief that he does not have to fill 70 seats per night. He clearly would if he had a bigger venue that needed the volumes for the economics to stack up.
This need to drive big numbers of people through large premises must be a concern for many
operators because on top of everything else right now, the shortages of employees looks to be a
long-term scenario and the astronomical cost of utilities is also predicted to be a multi-year
phenomenon.

Against this backdrop the growing number of independently owned micro-pubs that have
emerged over recent years must be sitting slightly more comfortably with their tiny footprints and
minimal staffing requirements. BrewDog Waterloo has been described as 26,500 and 27,500 sq ft
in different media reports, which means the typical size of a micro-pub is the equivalent of a
rounding error in the world of big bars. Where they are not in error is with their operating models
during these tough times, when questions will start to be asked about the appeal and viability of
the largest venues.

Glynn Davis, editor of Retail Insider 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Beer Insider would like to thank Propel for allowing the reproduction of this column.