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Marston's Pub Chain Sees Sales Rise Over Christmas As Cash Strapped Consumer Opt For A Pub Lunch

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MARSTONS PUBS SEE SALES RISE
Pub lunches helped Marston's to improve its profitability | Alamy

UK pub chain Marston's reported a 1.2% increase in like-for-like sales at its pubs for the 16 weeks to 19 January, helped by a 3.5% growth in food sales.

As consumers continue to watch their pennies, pubs which serve grub are benefitting, as the public chooses a cheap pub lunch over going to a restaurant. On 14 January, rival pub chain Greene King revealed it had sold more than 440,000 Christmas dinners.

Beer trade was doing well at Marston's too, with own-brewed beer volumes up 5% on last year.

Ralph Findlay, chief executive officer, used his statement to criticise the government for failing to recognise the damage being caused to pubs by "high taxation and over regulation".

"Nevertheless, we are confident of making further progress towards our objectives of sustainable growth, higher return on capital and reduced leverage," he added.

Findlay is not the only pub owner to complain about the government's lack of focus on their industry - JD Wetherspoon's chairman Tim Martin spoke openly in 2012 about the burden all pubs were facing because of the taxes levied on the industry.

Supermarkets, said Martin, have an unfair advantage because they do not have to pay the 20% VAT on food that pubs do, meaning more people opt to stay at home.

He also blamed an increasing tax take for his decision to limit the company's expansion plans during 2012, saying: "There is no question that we would open more pubs and create more jobs in 2013 if the increasing tax burden on pubs was reduced."

Nick Hood, business analyst at Company Watch, told the Huffington Post UK, Marston's would be pleased with its profitability improvement and its strong gains for its own-brand brewed beer.

"The rise in food sales in its managed pubs is also a key indicator that it has got the offering right for customers. The business is not without its financial challenges, with high debt levels linked to its property portfolio and brewery infrastructure, but this is part and parcel of the brewing business."

Elsewhere in the booze industry, SAB Miller, the world's second largest brewer, has seen its sales hit by a fall in demand in China, but performed well around the rest of the world.

The London-based company - known best for its Fosters and Peroni brands - said on Tuesday that its volumes had declined 3% in China in the three months to end-December. Despite the set back, organic lager volumes grew 2% overall. Soft drinks did well too, with volumes 3% higher.

Redmayne-Bentley stockbroker Lauren Charnley told HuffPost UK: "SAB Miller was outperforming the wider market this morning. The brewer said that for the quarter to 31st December 2012 weaker demand in the Asia-Pacific had hit global volumes, with the economic slowdown beginning to take its toll. Volumes in Australia and Africa were on the up however, giving the brewing giant a mixed-bag of results. Investors took the news well, with shares up 1% in early trading, above their 52-week high."

Company Watch's Hood added: "Being good in Latin America and other emerging markets, where it earns most of its profits, has neutralised the impact of stuttering beer markets in Europe and the wrong sort of winter in China.

"Revenue gains well above volume growth suggests that management have made higher prices stick despite the general economic gloom. It will be interesting to see in due course what this has done for profits."

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