Marston’s has reported that since restrictions were lifted on 12 April, the group has enjoyed a continuous improvement in trading, staying in its latest report: “For the most recent quarter from 25 July to 2 October, we saw a return to growth over 2019, with sales 2% higher across our managed and franchised pubs.
Overall, trading since 12 April has been at 94% of 2019 levels which includes the benefit of the temporary VAT reduction on food and non-alcoholic drink sales. As previously reported, trading during the year was significantly disrupted by the impact of the pandemic. Our pubs were open for only 54% of the total trading days.
When they were open, they operated under significant trading restrictions ranging from outdoor only and table service only, to the different tier systems across the UK. Total pub sales were £402 million for the year, representing 78% of last year, reflecting the significant disruption to trading from the pandemic.
During the lockdown period, Marston’s entered into an agreement to operate a portfolio of 156 pubs from SA Brain, under a combination of leased and management contract arrangements. These pubs reopened alongside the existing Marston’s pub estate in Wales and have performed well and ahead of expectations. Pubs were permitted to reopen for outdoor trading from 12 April in England and from 26 April in Scotland and Wales, and from 17 May indoor trading was permitted across all of the group’s pub estate, albeit still subject to the continuance of various social distancing restrictions, until 19 July.
Having invested £2 million in ‘Inside-Out’ schemes in Autumn/Winter 2020, we were able to open c70% of our pubs under outdoor trading restrictions and the group’s entire estate of c1,500 pubs has been open since 17 May. The ten weeks since 25 July have seen overall sales continue to improve from the initial opening and are in line with our expectations. During this period, sales growth resumed with like for like sales achieving 102% vs 2019 levels.
The group’s balanced estate, largely comprising community pubs nationwide with limited exposure to London and city centres, have supported this rapid return to above pre-pandemic levels. In addition, trading has been stronger in our premium pubs over the period. Accommodation sales have been excellent benefitting from the growth in staycation holidays. It has been well publicised that the wider industry is facing challenges in respect of staff recruitment and cost inflation, alongside supply issues.
Whilst the labour market remains tight, particularly in city centres, we are currently managing this well. The national minimum wage increase was in line with our expectation of a resumption of the 5-6% increase, which we were observing before the pandemic. The majority of our 2022 costs are now contracted in, specifically gas to 2023 and electricity to the end of March 2022. With regards to supply chain challenges, we have seen some small pockets of disruption however, we are working closely with our suppliers to manage this.”
Chief executive Andrew Andrea said: “We are delighted to be fully open again since trading restrictions were lifted in July. We are encouraged by the trading momentum which we have experienced since April and pleased to be trading robustly and above 2019 levels again. Our business benefits from an optimally balanced pub estate of food and wet led pubs that are predominately suburban, community based and well located for the changes in consumer behaviour that we are seeing.”