Demand for the pub and the role which the “great British institution” plays has never been stronger according to Marston’s boss, Andrew Andrea.
But he added the FTSE 250 pub group believes the “worst of the pandemic is now behind us” as he set out plans that would enable it to grow sales past £1 billion as well as bring its debt pile below the same seven figure sum 2025
North & north-east pubs performing well
Marston’s, which owns the Harbour Spring hotel in Peterhead and the Three Witches in Inverness, said sales were impacted by disruptions from the pandemic.
However, Mr Andrea said since reopening both Harbour Spring and the Three Witches had both “performed very well”.
Mr Andrea, who took on the role of chief executive last month, said: “Whilst there are still some challenges to navigate over the months ahead, we believe the worst of the pandemic is now behind us and Marston’s has emerged a stronger, more focused business which is in great shape.
“Importantly, consumer demand for the pub and the role which this great British institution plays, at the heart of communities up and down the country, has never been stronger.”
Pubs for customers to enjoy
One of the strategies the operator wants to focus on to return to “pre-pandemic levels of profitability” is its “pub to be proud of” scheme.
In its statement the company said: “Our people are at the heart of creating a ‘pub to be proud of’ and engaging and investing in our teams to help them improve the performance is critical to our success.”
Speaking specifically about this, Mr Andrea said: “We are absolutely focused on creating a great pub business.
“We are not restaurant or for casual dining. We need to have establishments where anyone can wander in for a drink and socialise.
“Somewhere to be proud of: We are asking the question – would you recommend this pub to friends or family? If the answer is no then we’ve got to improve it.
“The heart of it is having 1,500 pubs with 1,500 licensees maximising sales and profits.
“It’s about changing to make sure pubs are meeting the target needs of our customers.”
Scottish pubs in great sales for Marston’s
Mr Andrea confirmed there were no immediate plans to carry out any changes to either Harbour Spring or the Three Witches until rules north of the border relative to England and Wales have eased.
He said: “We are waiting for a full relaxation of restrictions in Scotland.
“But as it happens both of those pubs are performing pretty well and don’t fit in the programme for the moment.
“It is very likely we’ll see some change over the next three to four years or so.
“Since reopening we are happy with the performance in Scotland overall given that there’s an extra level of restriction over the English pubs.
“You wouldn’t know that if you looked at the like-for-like sales performance.”
The group said trading trends have been improving since reopening outdoors in April, with like-for-like sales since restrictions lifted in July at 102% of 2019 levels.
WFH changes hospitality
The firm highlighted how the pandemic has “significantly changed the way in which we live and work” particularly the trend for people working from home.
Marstons highlighted that its estate, which includes more suburban locations, is “well-placed to exploit this change”.
It added: “Whilst we believe that a return to office working will re-emerge in time, there are strong indications that more flexible working patterns will prevail in the long term, with many large organisations looking to reduce office space in city centre locations.”
Hospitality industry hit hard
However, Mr Andrea believes the Government needs to continue to play its part for the industry to keep improving.
He said: “Over the last 18 months, the Government provided much welcomed support to the hospitality industry, which has been so hard hit by the pandemic.
“We urge them to continue to assist the sector as it continues its recovery by maintaining VAT at 12.5%.
“Marston’s enters the year ahead as a focused pub business with a clear strategic plan, a profitable and cash generative business, a strong balance sheet and a 40% share in CMBC, our partnership with Carlsberg, which has such exciting potential.
“Whilst still early days, Christmas bookings look encouraging and we look to the future with renewed optimism.”
Wolverhampton-based Marston’s runs around 1,500 pubs, with 21 sites in Scotland. It also makes beers under a joint venture established with Carlsberg last year.
The pub operator and brewer reported its latest financial results in the year to October 2.
Underlying pre-tax losses widened to £100m from £22m the year before, with revenue down to £423.8m from £821m.
