Greene King has today released a trading statement to coincide with its AGM for the 18 weeks ending 3 September 2017, which states that in the first 18 weeks of the year Pub Company like-for-like sales were down 1.2% against a market that declined by 0.7%.
Like-for-like sales were down 0.9% in the first 10 weeks – excluding Fayre & Square, which is being rebranded during this financial year – but these sales were in line with Greene King’s expectations and ‘broadly in line with last year’ despite the ‘tough comparisons’ from Euro 2016.
Weakened trading since the second half of July has been attributed to worsening weather.
The decline in like-for-like in sales is likely due to value food, but the company has also addressed ‘some softening’ across other segments too.
Greene King has confirmed it is addressing the challenges presented by the value food sector through measured capital investment to upgrade and reposition pubs, and through selective disposals.
The company’s programme to deliver £45m of cost savings this year is on track, and this includes further cost synergies from the acquisition of Spirit.
The scale of this cost savings programme helps to reduce the impact of the ‘weaker than anticipated’ sales through limiting margin declines from ‘unprecedented industry cost pressures’.
However, its customer offer is being strengthened with both net promoter scores and food quality scores across Pub Company continuing to improve this year; Greene King’s brand conversion programme is delivering returns in excess of 20%.
Greene Kings other two businesses, Pub Partners and Brewing & Brands, continue to deliver strong returns and cash – with like-for-like net profit in Pub Partners up 1.4% after 16 weeks, and the impact of MRO in line with expectations.
In Brewing & Brands, own-brewed volume was down -0.5% against a UK ale market down -2.9% and a cask ale market down -7.0%.