The UK's Marston's Plc on Tuesday 6 December returned to annual profit, as people thronged bars and taverns after months of strict COVID curbs ended but the pub operator flagged rising costs were squeezing its margins.
Details
Marston's last week said Christmas bookings so far had topped pre-pandemic levels and so have sales since October, as it pushed back results release, citing a "procedural" delay in the completion of auditing accounts of its joint venture with Carlsberg UK.
The Wolverhampton-based firm's upbeat comments come at a time when a deepening cost-of-living crisis is forcing Britons to limit non-essential spending, while a sharp rise in costs squeezes margins for businesses.
Its operating expenses jumped more than 72% to £684.2 million at a time when soaring energy and labour costs are troubling UK businesses in the hospitality sector.
Marston's said recent sales were boosted by England's performance in the ongoing soccer World Cup, after Three Lions stormed into the quarter-final stage of the marquee event, synonymous with summer months but hosted this winter due to intense mid-year temperatures in host nation Qatar.
The company's pre-tax profit was £27.7 million for the 52 weeks ended 2 October, compared with Refinitiv analysts' estimates of £28.4 million.
Loss A Year Earlier
It had posted a loss of £100 million a year earlier when UK hospitality firms were hammered by the pandemic.
UPDATE 2-UK Pub Group Marston's Offers Not Too Dear Christmas Cheer
The above news was followed by the following update:
Christmas dinners at Marston's will cost up to 10% more this year, the British pub group said on Tuesday 6 December, but said it would be serving all the trimmings and bookings were higher so far than pre-pandemic levels for this year's festive season.
The price rise is lower than inflation in Britain, which reached a 41-year-high in November, leaving business facing the dilemma of how much they can pass on to customers of higher costs, including food and energy, without destroying demand.
CEO Andrew Andrea said he had not yet seen evidence Marston's was losing customers and recent sales had been boosted by England's performance in the ongoing soccer World Cup taking place in Qatar.
For the Christmas period, the company has said total bookings were so far higher than in 2019 before the COVID-19 pandemic took hold, but it has not given precise figures and said walk-in trade accounts for much of its festive sales.
"We are not the cheapest, but similarly we are not the most expensive. So I think we are picking up good value," Andrea told Reuters after the company returned to annual profitability.
Marston's, which has over 1,500 pubs and bars across Britain, will increase prices by between 5%-10%, Andrea said.
Marston's has already lifted the price of its food and drinks twice in 2022. Beverages account for around 60% of its overall revenue, while food items make up the rest.
Andrea said prices could rise again early next year.
The company's pre-tax profit came in at £27.7 million for the 52 weeks ended 2 October, compared to a loss of £100 million a year earlier. Its operating expenses jumped more than 72% to £684.2 million.
The timing of the World Cup in Qatar, which was changed to avoid the extreme temperatures of the peak summer months, helped sales during the normally quiet November period.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
