Greene King aims for Hungry Horse expansion

The company said it had 224 current Hungry Horse sites either operating or in its pipeline, with a further 114 specific sites identified for the brand. It said that Hungry Horse has the potential to be the leading pub restaurant brand in the UK.

Greene King said that the brand’s estate size had grown by 108% from 96 to 200 over the last five years, with average weekly turnover up 36% from £15.9k to £21.7k. Spend per head (Net) has risen 5.44% from £5.88 to £6.20, while the average price of a main meal has climbed 6.57% from £4.72 to £5.03. The brand’s wet/dry split has remained at 50:50.

Average brand ROCE is 12% compared to 9.2% in 2008. Since 2008, 67% of new Hungry Horse sites have been transferred from the existing estate, 24% have been acquisitions, and 9% have been new-build.

The group said that it had experienced a customer ‘flight to value’, with 47% of its profit coming from the value segment, with this expected to rise to 53% over next three years. It said that its sweet spot for locations for the brand were “Blue Collar Enterprise”.

It said that Hungry Horse’s revenue/profit ratio had doubled in last three years and that brand was exposing the company to new customer locations such as retail & commercial parks, cinemas and prime suburban sites. The brand was also exposing it to more customer occasions, such as family entertainment and leisure spending.
It said that the average burger RSP in a Hungry Horse was the lowest in the pub sector at c£4 against Beefeater which is nearing £9.
The company said that the brand had lost its way between 2005-2007 and that there was serious debate as to whether to invest & grow or disband it. Over the last six years the group said it had repositioned, rebranded, invested in & expanded the brand so that it was now at the heart of the austerity “VFM sweet spot”.
The group said that new builds average 18 months in development and its auditions and recruits c.40 new colleagues four to six weeks ahead of site handover. Key team members are trained in existing sites for six to eight weeks, while the launch team for a new build site undergoes a seven day training programme.
It said that the brand was a “well-positioned value offer for current economic climate”, “a flexible brand with broad appeal delivering strong and growing shareholder returns” and that there is “room for continued expansion over the coming years”.