Sales at Punch, the UK's largest pub group, have slipped into reverse due to a double whammy of the smoking ban and subdued consumer spending.
In a statement today, the pub giant said that after a satisfactory start to the year, trading over the last eight weeks had been subdued in what was undoubtedly a challenging period for the industry.
Like-for-like sales in the first 20 weeks of the company's financial year at its leased estate were 0.8% lower than a year ago.
In the company's managed pubs, like-for-like sales dipped 2.2% year-on-year, although food sales increased one percent. Food sales now account for 39% of total managed sales.
The company has been working to improve the quality of its business and disposed of almost 1,000 pubs last year. It now has an estate of 8,450 with 7,581 leased pubs and 869 managed pubs.
Punch said it was looking to make around £10m in cost savings this year but reiterated the smoking ban would ultimately be good for the sector.
Chief executive Giles Thorley said: "Whilst we remain cautious over the short-term outlook for the sector, the enduring popularity and appeal of the local community pub will continue and we remain confident about the long-term prospects for our business."
By Chris Druce
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