Marston’s is to ratchet up its opening of new-build pubs in 2012 after revealing that new-build sites are significantly outperforming the rest of its managed estate.
Chief executive Ralph Findlay told M&C report: “We built 15 [new-builds] last year, we expect to build 20 this year, and we expect to build 25 next year.”
Findlay said Marston’s new-builds are taking more than £25,000 per week, compared to an average of £15,000 in the rest of the division.
In its trading update for the 23 weeks to 12 March 2011, Marston’s said it’s “on target” to build 20 new-build sites during the full year (to 30 September 2011).
Five have opened to date in that period: in Trowbridge, Wiltshire; Southend, Essex; Cardiff; Crediton, Devon; and Fakenham, Norfolk. Another three are to open in the next eight weeks: in Huddersfield, West Yorkshire; Uttoxeter, Staffordshire; and Mansfield, Nottinghamshire.
Explaining the success of the new-build sites, Findlay said: “We build attractive pubs in very convenient locations and put outstanding standards of service.”
Like-for-like sales in the managed division increased 2.4%, with food up 4.7% and wet sales up 1.5%.
Explaining the rise in food sales, Findlay said: “We haven’t increased the level of promotions. But what we have got is an everyday low-price offer. I think the key is offering not just right price but combination of price of the food, the standards of the pub and the service standards. If get all of those right you will get do well.”
He said the average spend per head at the managed pubs, at around £6, has not changed in recent years, but customers are getting better value.
Findaly singled out the Two For One brand. “If you buy a prime rump stake and pay £6 or £7, it’s outstanding value. The simplicity of the offer works.”
Marston’s attributed the 0.1% rise in like-for-like profits in its tenanted and leased division primarily to the rollout of its Retail Agreement, where licensees typically earn 20% of turnover to pay themselves and staff - the company buys everything centrally and pays all other bills.
Findlay said the “simplicity” of the model is proving attractive and lower in-going costs - just a £5,000 deposit is required - is a benefit while banks are lending less to the sector.
Findlay was positive about the upcoming pubco inquiry by the Business, Innovation & Skills Committee. He said Marston’s new code of practice is having a “practical difference” because the more stringent requirements means it takes longer to recruit tenants. “I think that the industry and Marston’s has moved a long way in quite a short space of time,” Findlay said.
Findlay said the 4% like-for-like increase in own-beer volumes was helped by the “strong” performance of Hobgoblin over Halloween, and Pedigree’s rise in prominence during the England cricket series in Australia.
The severe winter weather had little impact on like-for-likes, Findlay added, because poor conditions in December 2010 “by and large cancelled out” positive comparisons with January 2010, when snow also struck.
