Social animals: Marston’s boss insists Brits’ thirst for the pub will not dry up despite historic inflation
Brits will continue to be “social animals” at the pub, despite inflation hitting a 40-year high, the boss of Marston’s has said.
“Having been locked up for two-three years, we are even more social animals,” Andrew Andrea insisted.
The pub boss was optimistic that, despite increasing cost of living concerns, punters would continue to knock back pints at their local over the coming months. “Old and young alike” were keen to go out, insight showed, Andrea said.
“In times of economic challenge, people look for flight to value” he told CityA.M. Pubs were well placed to take up market share from restaurants as consumers pursue cheaper nights out, the CEO said.
What’s more, punters were still keen to pay for a quality experience. Even with price rises, drinkers were prepared to swallow higher costs if it was “the thing [they] want to do,” Andrea said.
There had “absolutely not” been a shift away from premium lager to more standard products, he added.
“From a trading and sales perspective, it has to be a business as usual mindset,” he said. “In essence, the pandemic is behind us.”
However, the pub boss insisted he was “not saying we will get back to 2019 footfall tomorrow.”
However, Marston’s has not been immune to rising costs and was anticipated to take a £5m hit in electricity costs – after successfully mitigating £5m of the annualised £10m cost.
Andrea acknowledged that there had been “significant increases” in the price of white fish and chicken, with inflation felt across the supply chain.
Food inflation was landing at around seven per cent at the minute, the pub company had found.
However, he insisted the pub company was not running the risk of shortages or having to change menus as a consequence. The company’s procurement team were “working blooming hard” to come up with solutions.
“We have long-held suppliers, with whom we have navigated through a pandemic together and we are not creating a situation where they go out of business,” he said.
Despite swinging back into profit on Wednesday, Marston’s was unable to ease investor fears over rising headwinds.
The operator’s share price was knocked on Wednesday, down some 5.5 per cent when trading closed in the evening.
Sales across the firm’s 1,482 pubs bounced back to 97 per cent of pre-pandemic levels. The Wolverhampton-based firm posted profits of £39.9m for the 26 weeks running up to 2 April 2022, compared to a £57.2m loss over the same period in 2021.
The firm said it had overhauled its menu to drive “simplicity and efficiency,” in an effort to transition away from the “value food” market in a bid to maximise returns.
Like many in the sector, Andrea had hoped the government would take heed of calls to halt a return to pre-pandemic VAT levels on food and soft drinks sold in hospitality venues.
A freeze on the 12.5 per cent VAT rate would have been “the most appropriate tool to kickstart consumer spending,” he said.
However, the government had “made it clear we have to stand on our own two feet,” he added. “Anything we are granted [I see] as a bonus.”
Marston’s would not run its business based on hopes of further support, Andrea added, noting that the government currently had “many mouths to feed.”