Marston’s 20 new sites 'must be chosen carefully to avoid eating out growth pinch'

The firm, which has an estate of 1,600 pubs nationally, yesterday (14 October) reported like-for-like sales in its managed estate up 1.8% for the year ending 3 October and food and drink like-for-like sales up 1.7% for the same period.

Marston’s also reconfirmed plans to open at least 20 pub-restaurants in 2016, as well as several other non-food focused sites.

Yet, there were already lots of new foodservice venues on the market, Shore Capital analyst Greg Johnson warned.

‘Most other operators focusing on food’​

“If you look at what’s going on in the market at the moment, most of the other operators are focusing on food with a view that it is going to outgrow drink,” he told the Publican’s Morning Advertiser.​

“I think it’s sensible to open more food sites because society is drinking less [out-of-home] as there’s probably a reduction in the amount of people who are going out on a frequent basis for drinks.”

The only negative of Marston’s opening more sites, he believed, was that everyone else was also doing it to an extent where the industry was seeing a proliferation of food-led venues.

“It depends where Marston’s opens these 20 [pub-restaurant] sites,” Johnson explained. “There are always options and their argument would be where they are going to open the new sites is not where there is a lot of competition.”

For example, Marston’s should target non-urban areas for their new sites, he said.

‘Non-urban areas’​

Last week, a Horizons Menu Trends report claimed the increased competition in the eating out sector​ had forced many high street pubs to slash the prices of their dishes.

On average, the price of an adult’s three-course meal in a pub had declined by 45p to £18.74 this summer, compared with £19.19 for the same period last year, the report said.

Marston’s chief executive Ralph Findlay said: “The group has made good progress in the past year, with underlying growth in all of the business segments.

“Our new pub-restaurants, premium pubs and lodges have all performed well and we have good visibility over the site pipeline to underpin our future growth.

“In addition, we have substantially completed our disposal programme of smaller wet-led pubs. These actions, together with the success of franchise, have significantly transformed our pub business over the last three years.”