Rising costs the biggest issue for Greene King tenants

Rising costs, the consumer downturn and supermarket pricing are the biggest headaches for Greene King's tenants.

A survey for the Suffolk brewer, conducted last month by research group NOP, found that costs were far and away the main challenge the 500 Greene King tenants polled believed they were facing.

Nearly 90 per cent cited increased costs, followed by lower spending from consumers (78 per cent) and supermarket pricing (76 per cent).

The smoking ban was named as a main challenge by only 63 per cent of tenants, with poor weather on 69 per cent and the chancellor's recent duty rise on beer on 71 per cent.

Greene King chief executive Rooney Anand said the smoking ban's lowly ranking in the scale of issues facing tenants was down to the brewer having already sold a sizeable proportion of its purely wet-led pubs, those sites worst hit by the ban.

"Costs are the main problem for tenants," Anand said, "and there is an overall need to focus on mitigating these, as well as addressing consumer issues."

"People need to control the controllable and attack variable costs. There are schemes we've introduced such as 'Share & Save', our third party purchasing programme, which can add 10 per cent to a typical participating pub's bottom line.

"We can offer help in regard of things like electricity and gas and credit card fulfilment charges. Some licensees want to work with us on schemes like these while others, those who don't want to get close to the brewery, choose not to take this up," he said.

The brewer yesterday announced total turnover for the year to may 4, 2008, up five per cent to £960.5m, with pre-tax profits up two per cent at £142m.

Its shares closed yesterday at 433.25p, up 8.2 per cent, but were today trading slightly lower at 425.75p, down 1.7 per cent.