Festive diners flocked to Greene King pubs

PUBS and brewery group Greene King reported record Christmas sales as more diners opted for cheap pub meals over pricey restaurants during the festive season.

The group, which operates the Hungry Horse, Old English Inns, Eating Inn and Loch Fyne Restaurants, said like-for-like retail sales rose 3.7 per cent during the 36 weeks to January 6.

The figures were boosted by a 4.1 per cent rise in food sales.

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“These are very positive sales numbers,” said Rooney Anand, Greene King’s chief executive.

“They are a sign that although people are watching their pennies, pubs are still pivotal to communities.”

The group’s like-for-like sales climbed 2.8 per cent in the last six weeks of the period, reflecting very strong growth of 8.8 per cent the year before which were always going to be hard to beat.

It reported sales of £2.7m on Christmas Day, up 6.8 per cent on last year.

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Landlords are reporting a rising demand for casual dining as cash-strapped customers switch to pubs from more expensive restaurants.

Mr Anand said: “Our strong momentum has been maintained over the last six weeks.

“We achieved record sales through Christmas and the New Year.

Pubs continue to play a vital role for customers, families and communities across the UK during the festive period, especially in this difficult financial environment.

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“We once again achieved record Christmas bookings and strong like-for-like sales growth across Christmas and the New Year. During the whole of December, we sold 448,000 Christmas meals, another record for Greene King.”

Total sales in Greene King Retail, its largest and fastest growing business, rose 9.5 per cent and the group said the retail division’s margins should be ahead of last year.

Its Pub Partners estate reported a strong festive period and an improving performance trend.

The estate’s average earnings per pub rose 4.2 per cent and the group said its disposal programme is on track.

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It has sold 65 non-core sites in the financial year to date.

The Brewing & Brands division reported a two per cent slide at a time when the overall UK ale market reported a 4.2 per cent fall following a decline in real ale drinkers.

“Our two lead brands, Greene King IPA and Old Speckled Hen, are both ahead of last year on the back of our continued marketing investment and product innovation,” said Mr Anand. He added he doesn’t expect conditions for the UK consumer to improve in 2013.

“While this presents ongoing challenges, we are confident that our strategy, tailored to the prevailing conditions, and our consistent focus on providing excellent value, service and quality to our customers, will continue to deliver sustainable earnings,” he said.

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Analysts at Liberum Capital said in a note: “Greene King has kicked off the pub company Christmas trading reporting period with a solid trading performance over the last six weeks.

“Our recent conversations with private operators and industry experts mean we like Greene King’s solid managed division margin growth and attractively positioned estate.”

Analysts at Panmure Gordon said: “The group does not expect conditions for the UK consumer to improve in 2013 and we share this caution.

“However, the group’s well positioned managed pub estate and resilient tenanted and brewing operations means it is well positioned to maintain its current growth rates.

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“The reorientation of the business mix towards a higher proportion of managed pub earnings is on track and we think the group is well placed to participate in industry mergers and acquisitions.”

Greene King operates 2,300 pubs, restaurants and hotels across England, Wales and Scotland including over 120 pubs in Yorkshire.

Greene King IPA is the best selling cask ale in the UK and Old Speckled Hen is the UK’s best selling premium ale.

The company also brews Abbot Ale, the no.1 premium cask ale in the UK, and Belhaven Best, the no.1 ale brand in Scotland.

Greene King IPA has been relaunched backed by a £4m marketing campaign, including an arty advert with slow motion scenes of a party in a pub to folk guitar music.

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