Marston's and Fuller's upbeat on managed pub sales

By This Is Money
Updated: 10:09 EDT, 28 January 2011

Pub chains Marston's and Fuller's have issued positive updates on recent sales at their managed outlets, but offered more mixed news on their tenanted houses.

Warning: Fuller's has slammed 'damaging' alcohol duty esclator

The management at Fuller, Smith & Turner has also lashed out at 'damaging' plans to raise alcohol duty by 6.6% in April, and expressed concerns about inflation and its impact on customer spending.

Marston's, owner of the Tavern Table and Pitcher & Piano brands, said its 485-strong managed estate achieved an 11.2% rise in like-for-like sales in the key festive period between December 23 and January 3.

And despite 'exceptionally wintry conditions' earlier in December, like-for-like sales in the 16 weeks to January 22 were up 2.1% on the year before.

Like rival M&B, which reported strong sales figures yesterday, Marston's said eating-out demand drove the recent improvement as food sales lifted 4.4% and drink revenues grew 1.2% over the 16 week period.

The Wolverhampton-based company gave less detail about how its 1,663 tenanted pubs had fared, but said like-for-like profits were estimated to be 1% down on last year's.

Sales of Marston's-brewed beer, which includes Pedigree, Hobgoblin and Brakspear, were up 6% in the 16 weeks to January 22 as the company pushed local and premium cask ales and saw a 20% surge in sales of bottled products.

Meanwhile, Fuller's reported that like-for-like sales at its 160 managed pubs and hotels grew by 3.7% in the 10 weeks to January 22. But it described like-for-like profits in its 200-strong tenanted arm as 'level' for the 43 weeks up to the same date.

Its beer company's sales were up 1% during the 17 weeks up to January 22, it said.

Fuller's also offered a blunt assessment of the current trading environment.

'January has started with the VAT increase and further tax rises, including the damaging duty escalator, and Government spending cuts are set to follow. Despite this we are confident that we will meet our expectations for the full financial year,' it said.

'Looking further ahead to 2011/12, cost inflation is becoming an issue and we are concerned that in these uncertain times our customers may have less discretionary spend. However, our excellent beers and high quality, well-invested pubs in the South of England leave us well placed to meet these challenges.'

The Labour Government introduced the duty escalator, under which alcohol duty rises by 2% above retail price inflation, in 2008. It is set to rise by 6.6% this April.

Shares in Marston's edged 0.8p lower to 103p, while Fuller's stock was down 3.5p at 616p today.