Yates's discounting policy reaps reward

Lower drinks prices at Yates's Wine Lodges led to a 1.5% fall in like-for-like sales during the year to 2 April.

Customers had become "more value-conscious", the company said, leading it last autumn to introduce a policy of discounting during off-peak periods.

The policy initially hit revenues, but increased volumes have since compensated for the loss and like-for-like sales are now ahead of last year's.

Yates's turnover during the year rose by 20% to £144m. Profit before tax and exceptional items was up by 10% to £15.6m.

The group opened 31 new branches, 25 of which were Yates's Wine Lodges. Locations included Newcastle-upon-Tyne and Norwich. Six of the openings were Ha! Ha! Bar & Canteens, including one in London's West End and another at Windsor railway station.

Since the end of the financial year, seven more Yates's Wine Lodges have been added and one Ha! Ha! Bar & Canteen, in York.

The group now has 106 Wine Lodges, 11 Ha! Ha! Bar & Canteens, eight Watling Street Inns and 10 Blob Shops, a more student-orientated brand.

Six of the smaller and older Wine Lodges have been transferred to the Blob Shop management team and will be converted during the course of this year. Outside the North-west of England, they will trade under the name Addison's.

The company is introducing a new design for its Wine Lodges, with greater use of natural light, simpler colour schemes and new signs. In July, the first franchised Yates's Wine Lodge is set to open at Gatwick Airport.

Drinks sales at Ha! Ha! increased to 63% of turnover, compared with 58% in the previous year. Average sales per branch exceed £16,500 a week.

At Watling Street Inns, all branches reported an increase in like-for-like sales, which were up by 12.5% overall. Average turnover per site is now about £15,500 a week, with food accounting for 21% of total sales.

by David Shrimpton

Web site: www.yatesonthe.net