Belhaven brewer Greene King defying austerity
GREENE King, the pub operator and brewer best known in Scotland for Belhaven Best, posted a resilient jump in half-time sales and profits on Tuesday despite consumers increasingly counting the pennies in the austerity climate.
Chief executive Rooney Anand said the company had responded with a more value-for-money offering at its chains, which include Eating Inn and Hungry Horse.
At Hungry Horse, weekly promotional offers now account for more than one quarter of all food sold and its loyalty programme, being trialled in 40 sites, has in exces of 22,000 members.
At Eating Inn, the group reduced average selling prices by 5 per cent, while in its Loch Fyne restaurants it increased the average portion size of its “fish your way” dish.
Greene King also introduced Carling as a value lager at its Belhaven pubs.
Anand said of the Carling initiative: “We know Tennent’s is a very strong brand. But we wanted to offer an alternative.
“There are drinkers who may not want to drink what their fathers did.”
The Bury St Edmunds-based group, which runs about 2,300 pubs, restaurants and hotels, reported a 4.3 per cent rise in like-for-like sales in the 24 weeks to 14 October. Total group revenues grew 7.3 per cent to more than £566 million.
That came with a 7 per cent rise in pre-tax profits to £82.7m, Against a pub food market that is growing at about 3 per cent, food sales in Greene King’s managed pubs jumped 12 per cent.
Douglas Jack, an analyst at brokerage Numis Securities, deemed it “a good performance given that it occurred during a record wet summer”.
The group’s brewing and brands division saw its core own-brewed volumes fall 0.9 per cent against a UK ale market down 3 per cent.
Anand declined to reveal how Belhaven Best, Scotland’s best-selling ale, had performed.
However, Greene King said premium ale brand Old Speckled Hen grew volumes just under 6 per cent against a premium ale market up 1.8 per cent and Greene King IPA, the cask ale brand, achieved volume growth of 2.2 per cent in a standard ale market down 5 per cent.
Anand said that, given the austerity backdrop, consumers north and south of the Border were “budgeting and controlling expenditure. They are more premeditated.
“But we designed our strategy for tough market conditions four years ago. We felt markets were going in a particular direction and not likely to change any time soon.”
Greene King said coffee sales were also increasingly important, with hot beverage sales, of which coffee is 75 per cent, up 8.3 per cent.
“We want people to use pubs at different times of the day. The days of them being the exclusive preserve of male drinkers are long gone,” Anand added.
The group raised its interim dividend 6.7 per cent to 7.15p. Greene King’s shares closed up 5.5p at 615.5p. They are up roughly 30 per cent on a year ago.
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Tuesday 18 June 2013
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