Marston’s chief executive Ralph Findlay has told MCA that the group will continue to seek profit growth from within its existing estate and will remain cautious on further expansion.
Reporting its full-year results yesterday the brewer and pub operator said it was reducing its pipeline for the current year to 15 pubs and bars and six lodges.
Findlay said there were still opportunities for expansion but that further growth plans would remain under review.
He said he was not actively looking to diversify the estate into new markets but would continue to integrate emerging food and drink trends into the traditional pub model.
He also attacked the Government’s approach to the sector, saying: “Over the past four or five years this sector has been one of the main contributors to the fall in unemployment but the current Government’s actions has basically sent that into reverse. It is time we had some commitments from Government that it will look at things like VAT. “
Yesterday the group reported like-for-like sales in its managed Destination & Premium arm up 0.9% in the year to 30 September, and admitted summer trading had been subdued.
Asked weather or consumer confidence had been the biggest blow over the summer, Findlay said: “It’s often quite difficult to disentangle the two but it is probably a little bit of everything. Consumers are being squeezed but there were also tough comparatives. We are still seeing sales and profit growth and we expect that to continue. That is coming from modest increases in like-for-likes, reflecting the pressures we have, but probably more importantly the continued development of our pubs business through new openings and the acquisition of Charles Wells beer business.”
On whether food sales in pubs are starting to plateau, Findlay said: “There’s still growth in eating out in the UK, the issue is that there has been a lot of competition for that growth. Wet-led pubs have been faring well in comparison and that’s down to a number of factors. One is that the quality of the pubs in the market has got better, as unviable sites have closed and investment has gone into those that remain, and it’s also about more interest in drinks categories. I would expect those positives to continue for wet-led pubs but there is certainly still growth in eating out in the UK. It’s a question of finding the right sites and avoiding the competition for that demand.”
Findlay said that accommodation remained a key area and that despite a reduction in the lodge building programme he expected it to remain accommodation to continue to be a strong driver of growth.
He said new pub openings would principally be in the family pub and dining category, with two or three premium sites. The Revere arm is set to open in Sheffield and Bristol in the coming year.
On capitalising on trends in the market, Findlay said: “My interest is mainly in looking at what trends there are in the market and trying to see which of those will fit into the traditional pub model. We have had good success with fresh pizza, rotisserie chicken. We have looked at pubs which have fresh bread /bakery. They are all additions and show how flexible the model is but at its core these are still pubs, and that’s very important.”
Findlay said the two principal headwinds for Marston’s were squeezed consumer confidence and rising costs.
He added: “The sector is in for a bumpy ride and that will create fallout, which in turn creates opportunities for companies like ours, so we remain alert to that.”
Findlay also attacked the Government for failing to adequately help the sector.
