Marston's reports subdued 2012 market and expects weakness to continue

By Peter Ruddick

- Last updated on GMT

Related tags: Chief executive officer

Pub company and brewer Marston's reported like-for-like sales growth of 3.5 per cent in the 23 weeks to 10 March but said it expected a weak consumer backdrop in 2012
Pub company and brewer Marston's reported like-for-like sales growth of 3.5 per cent in the 23 weeks to 10 March but said it expected a weak consumer backdrop in 2012
Marston's, the pub operator and brewer, has reported a like-for-like sales increase in the 23 weeks to 10 March of 3.5 per cent and has declared its trading performance remains 'resilient' despite weaker conditions since the new year which it expects to continue during 2012.

The Wolverhampton-based company released a trading update for the 23-week period on Wednesday and admitted conditions since the festive period were more subdued than a year ago, due in part to the good weather conditions in the comparative period.

Food sales growth of 3.9 per cent in like-for-like terms and wet growth of 3.4 per cent had driven the overall growth for Marston's managed sites, the company said. While profitability remains in line with expectations, the chief executive officer for Marston's, Ralph Findlay, said the company was expecting the year to be difficult with sport and cultural events providing the main opportunities.

“We expect the consumer backdrop to remain weak in 2012, but with potential for better trading periods around Euro 2012 and the Queen’s Diamond Jubilee. Our clearly defined strategy, underpinned by our continued focus on value, service and quality has ensured a resilient performance," he said.

"We remain well positioned to make progress towards our key objectives of sustainable growth, improved return on capital and reduced leverage,” Findlay added.

Planned openings

In the tenanted and franchised pubs Marston's said profits are estimated to be 3 per cent ahead of last year driven in part by the continued rollout of retail agreements in the franchise estate. The agreements, now in around 400 pubs, sees tenants earn around 20 per cent of turnover to pay wages while Marston's covers all other costs.

Marston's currently has an estate of around 2,150 tenanted, leased, franchised and managed pubs. In the trading update the company confirmed the plan to build 25 pub-restaurants in the current financial year remains on track.

Last week JD Wetherspoon revealed sales since the festive period had been disappointing​ and announced it was planning to scale back its planned openings for the year due to continued cost pressures including tax from Government. 

As well as operating pubs, Marston's also has a significant brewing operation and announced own brewed beer volumes were also up in the period - 2 per cent in comparison to the year before. Volumes of bottled ale from the brewer that produces Marston's Pedigree and Hobgoblin rose 10 per cent alone. 

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