Marston’s blames heat wave for decline in trade

Marston’s has blamed Britain’s recent heatwave, which saw temperatures hit record levels, for a decline in food orders at its establishments. 

The pub and hotel operator revealed that drink sales have continued to outpace the demand for food since the beginning of April, but particularly in the last four weeks as the balmy climate caused fewer customers to order a meal.

As a result, like-for-like revenues at the Wolverhampton-based company in the 16 weeks to 23 July were slightly below pre-pandemic volumes even though the trade in beverages remained very healthy.

Demand: Like-for-like sales at Marston’s in the 16 weeks to 23 July were slightly below pre-pandemic volumes even though the sales of drinks remained in growth

Total revenues in the 42 weeks from October 2021 were also below pre-Covid levels due largely to the reintroduction of Covid-related restrictions last December in response to the Omicron variant’s emergence. 

Marston’s noted customer volumes had been ‘encouraging’ despite the uncertainty created by the ongoing cost-of-living crisis, with the UK inflation rate currently at a four-decade high of 9.4 per cent.

Chief executive Andrew Andrea said the firm was ‘cautiously optimistic that we will continue to see similar levels of customer demand across the summer where we will benefit from our investments in outside space and staycations’.

But the business, which runs about 1,500 pubs across Britain, warned that its energy costs would be much greater, given the additional pressure on prices brought about by Russia’s full-scale invasion of Ukraine in February.

Energy tariffs in Britain have been further driven up by the loosening of lockdown restrictions, low levels of gas storage following a cold winter in 2020/21, and growing demand from Asia, amongst other reasons.

Having ended its last electricity contract four months ago, Marston’s now expects to spend around £2million more than previously anticipated on its electricity bill in the second half of the year.

Cheers: Marston’s noted demand had been ‘encouraging’ despite the uncertainty created by the ongoing cost-of-living crisis, with the UK inflation rate at a four-decade high

To try and minimise outlays, the company has decided to fix its rates for the upcoming winter and secured an agreement to set its gas bills until March 2025.

However, the accelerating UK inflation rate led the group to hike staff salaries by 7.7 per cent in April for all hourly-paid staff working behind the bar, in kitchens, or front of house.

Bosses at Marston’s said they were ‘making every effort to mitigate cost inflation over the medium term through the various opportunities open to it such as energy efficiency plans and future pricing strategies’.

Marston’s shares were up 3.4 per cent at 48.6p on late Wednesday afternoon, although their value has fallen by around 40 per cent in the past six months.

The company’s trading update comes a week after fellow hospitality firms Fuller’s and Mitchells & Butlers (M&B) both cautioned of rising utility, food and wage bills.

Toby Carvery owner M&B expects these extra costs will continue at or above current levels into 2023, while Fuller’s chief executive Simon Emeny said the added cost pressures showed ‘no signs of abating.’ 

This post first appeared on Dailymail.co.uk