Marston’s “on track” for target of 50 franchised pubs
Marston’s has said it is “on track” to hit its target of 50 food-led franchised pubs by the end of the 2024 financial year.
The pub group operates 714 drinks-led pubs under its franchise-style model, and began trialling the same system in 19 food-led sites. It said that sales growth in these pubs had exceeded its broader food business.
During the year, the group generated £55 million of non-core pub disposal proceeds. It said it has concluded a further strategic assessment of assets and in the next financial year it expects to dispose of around £50 million of additional non-core properties.
In March, Marston’s put 61 pubs on the market, as it looked to focus on maximising returns within its core estate.
Marston’s said that looking ahead, the combination of its strategy and the principally suburban location of its pub portfolio positions it well to withstand the challenging consumer environment. It added that its disposal of non-core pubs ensures it has a portfolio of well-invested pubs.
This comes as the pub group releases a trading update for the year to 30 September, during which the operator recorded an increase in like-for-like sales of 10.1% compared to the previous year. Marston’s said that both food and drink sales had been strong.
During the 10 weeks from 23 July to 30 September, like-for-like sales increased by 7.7%, which Marston’s said reflected the wetter weather during July and August.
In the last five weeks of the financial period, like-for-like sales were up by 12%.
Andrew Andrea, chief executive officer of Marston’s, said: “Two years ago, we set out our vision and strategy with a clear objective to create a simplified, high quality predominately suburban pub business, with minimal exposure to city centres where demand is more volatile. Operationally, we remain focused on the core pillars of driving guest satisfaction in a great environment served by engaged and focused teams, which remains relevant despite the macro challenges facing the consumer.
“The benefits of this strategy are now coming through. We are pleased that the strong trading momentum which characterised H1 of this year has continued into H2, culminating in a 12% like for like performance most recently. The simplification of the business, together with the extension of the franchise model into our food-led pubs, has enabled us to introduce additional efficiencies into the business, which will improve margins in 2024 and beyond, through improved sales performance and continued cost savings.”