A leading City analyst has warned that far from seeing an economic upturn in 2010, the second half of next year will witness an even tougher consumer environment.
Douglas Jack of Numis Securities said in a piece of research published today that in the short term the pub sector was benefitting from improved consumer confidence; weaker like-for-like comparatives; improved tourism; AWP machine upgrades and the boost to the banking system provided by quantative easing and other monetary measures.
While Jack said the outlook until mid-2010 was looking "reasonable", the consumer outlook "should toughen thereafter", with unemployment rising, plus hikes in VAT and personal taxes.
The analyst said JD Wetherspoon, followed by Restaurant Group and Fuller's, should be "best placed to ride out an uncertain economic outlook".
"Even if the property market does fall again, the pub to residential house conversion opportunity should still continue," wrote Jack.
"Either way, Punch Taverns should sell the vast majority of its tail-end pubs before the property market becomes an issue."
Jack was "less enthusiastic" about Enterprise Inns and Mitchells & Butlers, "which in our opinion are both locked into paying down bank debt with insufficient non-core disposal programmes".