BREWER and pub operator Greene King has unveiled plans to open at least 30 eateries a year by the end of the decade after reporting its fifth consecutive set of record annual results.
The Belhaven owner, which has more than 1,900 pubs, restaurants and hotels, is seeking to grab a larger slice of the UK’s £48 billion market for eating out by targeting more people who are looking for meals and snacks throughout the week.
Its five-year strategy, due to kick in next year, will see the group aim to reduce its number of tenanted and leased pubs from more than 880 to 750 as its attention increasingly shifts towards food.
Like-for-like food sales at the firm’s 1,032-strong managed estate, which includes Hungry Horse and Loch Fyne Seafood & Grill, rose 5 per cent in the year to 4 May, helping total revenues grow 8.9 per cent to £1.3bn.
Chief executive Rooney Anand said: “There are now clear signs that both the UK economic outlook and consumer confidence are improving, although consumers continue to spend cautiously.
“While continuing to provide customers with great value for money, excellent service and industry-leading quality, we see the pace of change in how people eat and drink out of home quickening and so we are shaping the business for the future to benefit from the opportunities these changes will bring.”
Greene King expects to add between 50 and 60 managed outlets this year as it looks to cater for “increasingly dynamic” customer behaviour.
It said consumers were tending to go out less but demanding more choice and more control over what they eat and drink, adding: “As a result, we redesigned our burger offer, upgraded the quality of our steaks and added a number of healthier dishes to our menu.”
Pre-tax profits increased to £173.1 million, from £158.2m a year earlier, and the board proposed a 6.9 per cent increase in its final dividend to 20.8p, to be paid on 15 September.
Shore Capital analyst Greg Johnson said: “Current trading appears a little soft, with like-for-like sales in the core retail division ahead by just 1.1 per cent in the first eight weeks of the financial year with the statement highlighting a soft May and June in the eating and drinking out markets.”
However, Johnson – who rates Greene King’s shares as a “buy” – said the broker was sticking to its forecast of £175.3m in pre-tax profits this year, reflecting like-for-like sales growth of about 3 per cent in the retail division.
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