Greene King warns of tough pub market after half-year profit fall

The group, which owns Hungry House and Chef and Brewer brands, have been hit by pub-goers spending less and increased competition

Holly Williams
Thursday 30 November 2017 09:55 GMT
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Rivals to Greene King slashed prices in a disappointing summer for pubs
Rivals to Greene King slashed prices in a disappointing summer for pubs

Pub group Greene King has revealed an 8 per cent fall in half-year profits and sliding sales after a challenging first half and warned market conditions would "toughen" over the next few years.

The group, which owns the Hungry Horse and Chef and Brewer brands, said half-year results were hit as pub goers tightened their belts, while rivals also slashed prices to offset disappointing weather in August and September.

It saw underlying pre-tax profits fall 8 per cent to £127.9m for the six months to October 15, while like-for-like sales in its managed estate fell 1.4 per cent.

Chief executive Rooney Anand said managed pub trading had improved after a £10m action plan to cut prices, increase promotions and have extra staff where needed - helping drive an improvement in food and drink sales over the past six weeks.

He said: "The first half was challenging for our managed pubs, but our actions to strengthen performance have produced an improvement since the period end.

"We have committed additional investment to enhance the customer experience, including being more competitive on price, having more team members available at key times and strengthening local marketing activity."

But the Suffolk-based group, founded in 1799, cautioned that falling consumer confidence, cost pressures from national living wage increases and intense competition would remain a challenge.

It said: "While we have already initiated a number of activities to improve our competitiveness, particularly in the eating out market, we believe that market conditions are likely to toughen over the next two to three years."

It is now working on "more detailed" plans to offset the difficult market and continue to benefit from its takeover of Spirit Pub Company for £774m in 2015.

The group's leased pub chain fared better over the first half, with like-for-like net profits up 1.5 per cent, while its brewing business - behind tipples such as Greene King IPA, Old Speckled Hen, Abbot Ale - saw sales by volume rise 0.3 per cent.

PA

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