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Greene King will reduce brands, analyst claims

By MC Allegra FS

- Last updated on GMT

Related tags: Public house, Inn

Greene King will reduce brands, analyst claims
Leading analyst Jamie Rollo, of Morgan Stanley, has said he believes Greene King will look to achieve synergies from the integration of Spirit Pub Company through simplification and improvement of brands.

Rollo also estimates that the enlarged group might have to sell another 300 tenanted pubs and up to 200 managed pubs. He said the incorporation of a casual dining/cafe brand into the company’s managed estate would make sense, to improve its all-day and non-alcoholic offer.

He said: “Previous transactions, such as M&B’s acquisitions of Allied Domecq, Whitbread, and Orchid pubs have targeted very high sales uplifts, 40%-50% in these examples (though not always achieved). We don’t think Spirit offers such potential given not all its pubs can be converted to a Greene King brand.

“But we think the company will reduce its 15 brands to seven or eight. We assume stand-alone brands like Loch Fyne will continue, leaving similar brands to be rationalised.

“In the Premium segment, this would be between Metropolitan Pub Company and Taylor Walker; in the mainstream food-led pubs, between Chef & Brewer, Old English Inns and Eating Inn; and in the value segment between Hungry Horse, Fayre & Square, Flaming Grill, Meet & Eat and Flame Grill.”

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