Scottish drink driving laws slow Greene King sales
Pub giant Greene King only managed a 2% increase in sales over Christmas and the New Year in its retail estate, and a 0.6% in the year-to-date.
The company blamed tough comparatives for the numbers for the 36 weeks to 11 January 2015, issued in a trading update to the City this morning, as well as slower trading in Scotland due to a combination of new drink-driving laws and poorer weather. The changes in Scotland mean that as of December 2014, the country has a lower legal drink-drive limit than elsewhere in the UK (50mg of alcohol in every 100ml of blood, rather than 80mg).
Meanwhile, like-for-like net income in its Pub Partners division was up 2.8% and its own-brewed volume growth was up 5.2% during the period.
Greene King said it had received a record 780,000 Christmas bookings, up 7%, with like-for-like growth of 3.5%. It also achieved record retail sales of £3.4m on Christmas Day, suggesting that the rest of the month had been tougher.
Its best-performing brands over the past six weeks were London-based Metropolitan, and more food-led brands like Farmhouse Inns.
Rooney Anand, chief executive officer, said: "Sales were encouraging in our retail business over the important two weeks covering Christmas and the New Year, despite a very tough comparative from last year and softer trading in Scotland, following the introduction of tougher drink-driving laws. Outside of those weeks, trading was more volatile, with the weeks before Christmas slightly down on the previous year and soft trading since the New Year.
"This performance was delivered in a continued challenging environment, as highlighted by the most recent Greene King Leisure Tracker, which reported an 8% year-on-year fall in household leisure spending in November.
"We are delighted that last week Greene King and Spirit Pub Company shareholders overwhelmingly voted in favour of the proposed transaction between our two companies. This will create the UK's leading managed pub company and deliver significant shareholder value through material synergy generation and anticipated earnings accretion. The exact timing of the completion of the deal remains uncertain but we are working closely with the Competition and Markets Authority and expect the deal to complete by the end of the first half of 2015."