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A quiet January and November caused like for like sales growth to slow during Greene King’s third quarter, despite strong trading over the Christmas period.
The FTSE 250 brewer and pub operator reported like for like growth of 1.1 per cent for the 40 weeks to February 5, down from 1.3 per cent in its first half.
Declines in Greene King’s brewing business also accelerated, with volumes down 4.2 per cent over the period compared to 3.8 per cent in the first half, worse than the 3.8 per cent decline in the wider cask ale market.
Pub companies have faced a cocktail of challenges in recent months, and Greene King previously warned that it expects to take a hit from a fall in consumer spending, as well as increases in business rates and the minimum wage.
Today the company again emphasised the “economic uncertainty and significant cost pressures” it is facing, but said “we are confident that the combined strength of our brands, pubs, people and cash generation leaves us well placed to deliver another year of progress, value creation and returns for our shareholders”.
The introduction of a new Pubs Code last year, which removed the centuries-old “beer tie” that forced tenants to buy beer from their pub company at inflated prices, has also prompted many operators to restructure their business. However, a number of companies have for continuing to impose stocking requirements on tenants, or “not taking the code seriously“.