Pubs and brewing group Greene King has blamed falling consumer confidence, rising costs and bad weather for a slump in first-quarter sales.
The Belhaven owner booked a 1.2 per cent fall in like-for-like sales for the 18 weeks to 3 September, as it also pointed to increased competition from rivals.
“We remain cautious about the trading environment and expect the challenges of weaker consumer confidence, increased costs and increasing competition to persist over the near term,” Greene King said in a trading update ahead of its annual meeting.
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The firm added that over the course of the year, most of the sales decline can be attributed to value food, although more recently it saw “some softening across other segments”.
In June, Greene King outlined a raft of challenges affecting the pub and brewing industry over the next few years, which it said are set to “intensify” amid weakened consumer confidence caused by surging inflation.
The group has said it believed visits to the pub will remain an “affordable treat” despite cash-strapped consumers cutting back on spending elsewhere.
Greene King is also bracing for costs to rocket by around £60 million over the new financial year, but it has plans in place to offset up to £45m of the rise.
It also hopes the group’s bigger scale since taking over rival Spirit Pub Company for £774m in 2015 will continue to help it withstand surging cost pressures.
Neil Wilson, senior market analyst, said Greene King’s statement signalled “weakness in consumer spending and confidence”.
He added: “June was hot and dry but since the second half of July the wet weather has kept boozers away from pub gardens. The lack of a major football tournament this year will also be a factor.
“Expect a return to year-on-year growth this time next year when the World Cup comes into play. But it’s yet another sign that the squeeze on consumer spending is hitting company profits.”