Midlands pubs company Marston's reported slower sales yesterday as the Pedigree brewer became the latest chain to paint a gloomy picture on festive trading.
The group said like-for-like sales at its managed pubs rose one per cent in the 16 weeks to January 19, with the last eight weeks of the period seeing just 0.1 per cent growth. Food sales propped up the division with a rise of 9.5 per cent on a year earlier, offsetting declines in higher-margin drinks and machine revenues.
Marston's said the smoking ban, weaker consumer confidence and cost pressures meant it also viewed 2008 trading with caution - echoing recent comments from rival operators such as Punch Taverns and JD Wetherspoon.
The company's estate totals 2,275 pubs - 1,723 tenancies within Marston's Pub Company and 552 directly managed by Marston's Inns & Taverns. It operates four breweries - Banks's in Wolverhampton, Marston's at Burton-on-Trent, Jennings at Cockermouth in the Lake District and Ringwood in Hampshire.
Marston's Beer Company, the tenanted and leased pubs division, saw like-for-like profits 0.6 per cent below last year with growth in rental income offset by lower beer volumes and machine income, reflecting the smoking ban impact. Volumes were also down on last year, although the company said it continued to increase its share in a weak market.
Regional ales from the Jennings and Ringwood breweries showed good growth, while Marston's said it hoped to build on its association with English cricket after securing a sponsorship deal for the Twenty20 Cup.
Marston's told shareholders: "We remain cautious about the outlook for 2008 as a consequence of the smoking ban, weaker consumer confidence and pressures on costs and margins.
"However, our high quality pub estate is well positioned to exploit favourable market trends including the growth in casual dining. Our value- for-money offers and mid-market position are appropriate for the current economic climate."
Ralph Findlay, chief executive, added: "Marston's has a clear strategy for growth and a strong balance sheet supported by a substantially freehold pub estate which provides us with significant operational and financial flexibility. We are working hard to reduce the impact of rising costs while supporting tenants and lessees in this challenging market."