Date: Tuesday 12 Jun 2012
Like-for-like sales growth slowed at Spirit as the pubs group ran into stronger comparatives from a year earlier, while things are getting worse in the group's leased estate.
Like-for-like (LFL) sales in the managed estate in the 12 weeks to May 26th were up 3.7% year-on-year. That brought LFL growth in the first 40 weeks of the group's financial year down to 5.0% from 5.6% at the half-year stage.
As seems to be the norm in pubs these days, food sales drove growth, though once again the growth rate has tailed off, with sales of pub grub up 6.8% from a year earlier in the 12-week period, and up 7.1% over the 40-week period.
Drink sales in the managed estate were up 1.1% in the group's third quarter, while in the first three quarters of the financial year they were up 3.9%.
According to the Coffer Peach Business Tracker Spirit continues to "significantly outperform" the pubs market in terms of top line growth, as it continues with its campaign to spruce up its estate. Spirit has beefed up its Taylor Walker and Chef & Brewer brands and is close to completing the refurbishment of the Fayre & Square and Flaming Grill offerings. The John Barras and Original Pub Company brands will get their share of tender loving care in the next financial year.
Things are less rosy in the group's leased estate, where LFL net income was down 8.0% compared to the third quarter of last year, and 5.3% lower year-on-year over the 40 week period.
Despite the deterioration in trading, Spirit maintained its management team, which took full control of the leased estate at the start of the quarter, is making progress.
The proportion of pubs on a substantive lease agreement has increased by three percentage points from the half year to 87%, meaning the group is relying less on temporary landlords, and the group has significantly reduced discounts and concessions to its licensees.
"As expected, the process of stabilising income is taking time. It has been a challenging quarter set against strong trading comparatives and the impact of current year rent rebasing," Spirit said.
Mike Tye, Chief Executive of Spirit, revealed the group's focus is now on maximising sales in its managed pubs during what promises to be a busy summer, while at the same time stabilising performance in the leased estate.
"Whilst the consumer environment remains uncertain, we are confident in making further progress this year and remain on track to deliver our full year expectations," Tye claimed.
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