Festive period brings trade mixed fortunes

Difficult first quarter ahead as businesses face prospect of duty increase in the spring

Licensees and pub operators were this week coming to terms with disappointing Christmas and New Year trading, which saw the smoking ban and consumer-belt tightening take their toll on pub takings.

Early feedback from licensees and pubcos pointed to a mixed bag of results with New Year's Eve trade a particular disappointment.

A straw poll of 40 operators conducted by Blue Oar Leisure analyst Mark Brumby revealed positive trading in the week up to Christmas but a late start.

Companies reported that per-head spending had fallen, with wet trade and machine sales down, while food volumes held up. Brumby said that while event pre-bookings remained good, walk-in business suffered, with the smoke ban being blamed for deterring "chance drinkers".

Analyst Douglas Jack, of Panmure Gordon, said better-positioned operators had capitalised on a late surge of business to achieve a positive outcome for December.

But he added that overall Christmas trading had been "mixed", with quality food operators performing best and land-locked community pubs trading negatively.

"The restaurant sector is becoming one with winners and losers, with the residential pub sector polarising, with all last year's 2% fall in supply accounted for by wet-led pubs," Jack said.

Managed pub operator Barracuda, which runs 216 premium, sports and student bars, saw sales rise 3%.

But other managed companies were reluctant to discuss trading performance. One operator, Laurel, said it was too early to reveal definitive trends.

Several pointed to Christmas Eve and New Year's Eve falling on a Monday, which meant tagging the two big "celebration" nights on to the end of busy weekends.

Federation of Licensed Victuallers Associations chief executive Tony Payne said feedback from licensees had been "very mixed".

"A number of licensees have told me they are now over-stocked and have not bothered putting dray orders in this week," Payne said.

Early feedback on January trade points to a sizeable downturn. Licensees and pub-cos forecast a difficult first quarter, with big brewery prices increases in the pipeline and the prospect of a duty increase in the spring Budget.

Comments received by Mark Brumby, Blue Oar Securities anaLYST

l "Thank God we've got beds, trading was mixed..." (managed operator with accommodation)

l "Both the weeks ending 23 and 30 December were very disappointing..." (managed operator)

l "Absolutely s---..." (managed operator/multiple tenant)

l "Christmas came late and threw up unpredictable results... our run in to Christmas was poor... last week was dire... December down 6%..." (managed operator/multiple tenant)

l "Spend per head was slightly shy of last year." (managed operator)

l "December started slowly but we finished strongly..." (high street operator)

l "Feedback from suppliers is that Christmas was very poor... we had a decent December with group sales 4% ahead of 2007." (managed operator)

l "We were quite pleased with Christmas - we were about 5% up on last year vs 1.9% up in November, heavily weighted to last two weeks..." (regional pubco)

l "Our two pre-Christmas weeks were a touch up on last year, which is better than we have been used to." (managed operator)