Marston's sees strong start to 2011
Midlands brewer Marston's said today that despite poor weather and the VAT rise trading at the start of the year has been better than expected.
Speaking as the group reported like-for-like sales across its managed pub estate up 11 per cent for the 10 days to January 3, 2011, chief executive Ralph Findlay acknowledged that this year's numbers were helped by softer comparatives with the same time last year, when the weatrher had been even worse and VAT was lower than it is today.
But he noted the pub market as a whole had started 2011 "quite strongly".
"Yes, there's been the bad weather and the VAT rise. But the market as a whole has started off quite strongly. Trading conditions have been better than we expected and while the wider environment is tough our experience is if you get the offer in the right place and at the right price you can do well."
Findlay said providing a consistent value-for-money offer at a time when people were eschewing splashing out on big ticket items but still wanted some enjoyment in life would do the business, even with recent price rises in his pubs.
"We put the VAT increase on our menus before Christmas and on our drinks in January. In a market where inflation is coming back in that's fair and reasonable. We've had no negative feedback so far to these price increases, but it is early days," he added.
The latest pub operator to report trading over the festive period, Findlay said Marston's managed pub like-for-like sales for the six weeks to January 8, 2011, were level with the previous year, while in the 16 week period to the January 22, 2011 like-for-like sales were 2.1 per cent up, including like-for-like food sales growth of 4.4 per cent and like-for-like drink sales 1.2 per cent higher.
Operating margins were "slightly ahead of last year".
Marston's tenanted pub estate, Marston's said underlying profit trends "continued to improve".
Like-for-like profits are reckoned to be around one per cent below last year, which compared favourably to the four per cent decline in the last financial year. "This improvement is primarily attributable to the continuing successful rollout of the franchise-style Retail Agreement, now operating in 160 pubs," the group commented.
On the brewing side, Marston's own brewed beer volumes were up six per cent versus last year, in an ale market down by around seven per cent. It said its premium cask ale sale were up four per cent and bottled ale up 20 per cent.
Findlay said Marston's had opened two new pub-restaurants in 2011 and was developing a further eight such operations. "We expect to open 20 pubs in 2011 and 25 in 2012. The performance of the 15 pubs opened in 2010 continues to be good and ahead of our original targets," Findlay said.
While he was encouraged by Marston's performance to date, Findlay warned of the challenges facing the industry, not least the prospect of a seven per cent increase in beer duty in the next Budget.
"But given the headwinds we're facing we're well placed," he added.
Marston's announces its half-year results for the 26 weeks to April 2, 2011 on May 19, 2011.
