Shepherd Neame says consumer demand remains robust as it reports record first-half revenue: South east brewer and retailer Shepherd Neame has said consumer demand has remained robust as it reported record first-half revenue. For the 12 weeks to 16 March 2024, retail like-for-like sales were up 4.9% on last year. Like-for-like tenanted pub income for the nine weeks to 24 February 2024 was up 3.3% on last year. Total beer volume for the period was down 11.8% versus 2023. Own beer volume was down 16.9% versus 2023. For the adjusted Christmas period, from 1 to 31 December 2023, like-for-like retail sales were up 14.9% versus the previous year. The company stated: “The strong Christmas trade has given everyone a boost. Demand is robust, cost trends appear to be improving, and recruitment of good talent – while never easy – is more stable. However, the impact of higher interest rates is still feeding through into mortgages as some homeowners come off low fixed-rate deals and the impact for many is yet to be felt. On the other hand, real wages are starting to grow again. If this continues, and prices start to stabilise and interest rates fall, as many predict, then these factors should result in higher net disposable income in due course. In terms of costs, the national living wage will increase by 9.8% in April to £11.44, making a total increase of 59% in the rate since 2016, and the eligibility age is to be reduced to 21. This increase will increase our costs by £1.8m on a full year basis and impact the last quarter of this financial year by £0.4m. As we renew our agreement with our logistics provider, the cost will rise materially throughout 2025. We are encouraged by the performance to date of our recent development schemes. We continue to take a long-term view and remain focused on inward investment and have many great schemes to deliver. This has been, to say the least, a turbulent few years for the hospitality sector. There have been many challenges and pitfalls. We try to adapt to the short-term challenges, such as inflationary pressures, as best we can, whilst at the same time remaining alive to the great long-term opportunities which we uncover. The fundamental strengths of Shepherd Neame, as a well-balanced, well-invested, cash generative business, with great people operating at the heart of our communities, are intact.” It comes as revenue for the 26 weeks ending 23 December 2023 increased 4.3% to £89.0m (2022: £85.3m). Underlying Ebitda grew 5.2% to £12.0m (2022: £11.4m). Statutory profit before tax was £1.1m (2023: £5.5m). Total retail sales were up 12.3% to £41.4m (2022: £36.39m). Retail like-for-like sales were up 6.2% on last year. Retail like-for-like sales inside the M25 were up 17.5% and outside the M25 by 1.8%. For the 26 weeks, like-for-like drink sales were up 8.9%, like-for-like food sales were up 3.7% and like-for-like accommodation down 2.2%. Like-for-like tenanted pub income was up 5.1% on last year. Divisional revenue was up 1.5% to £17.7m (2022: £17.4m) and operating profit was £6.6m (2022: £6.9m). Chief executive Jonathan Neame said: “Consumer demand has remained robust, with exceptional trade over the Christmas period. It has been a particularly strong period for our London pubs as people continue to return to their offices. While the inflation outlook is improving overall, we do face new inflationary challenges such as the further rise to the national living wage. We are encouraged by the performance of our recent retail developments and have a good pipeline of schemes to deliver to further improve the premium quality of the estate. We have a strong balance sheet, a well-balanced, cash generative business and a fantastic team of dedicated talent that give us confidence in our long-term prospects.” The company operates 296 pubs, of which 219 are tenanted or leased, 71 managed and six are held as investment properties under commercial free of tie leases.

Propel’s updated Multi-Site Database to be released on Thursday, 28 March, with seven category segmentation including 761 pub and bar operators: The next Propel Multi-Site Database, produced in association with Virgate, providing details of more than 3,000 multi-site operators, will be released on Thursday, 28 March, at midday, to Premium Club members – and companies are now searchable in seven main segments. The database features 906 (30%) restaurant operators from the casual dining sector, 761 (25%) pub and bar operators, 504 (16%) cafe bakery operators, 415 (13%) quick service restaurant operators, 249 (8%) hotel operators, 188 (6%) experiential leisure operators and 52 (2%) fine dining restaurant operators. The database is updated each month – this edition includes 16 new companies and brings the total to 3,075. Premium Club members also receive access to five other databases: the Turnover & Profits Blue Book, the New Openings Database, the UK Food and Beverage Franchisor Database, the UK Food and Beverage Franchisee Database and the Who’s Who of UK Hospitality. Plus, all members will be offered a 20% discount on tickets to five Propel paid-for events – The Excellence in Pub Retailing Conference (14 May), Social Media for Profit (18 July), the Talent and Training Conference (1 October) and Restaurant Marketer and Innovator (two days in January 2025). Operators will also be able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. Email kai.kirkman@propelinfo.com today to sign up.

Inflation falls to two and a half-year low of 3.4% as food pressures ease: UK inflation has fallen to its lowest level in two and a half years as food pressures ease, according to new figures. The Consumer Price Index (CPI) has slowed to 3.4% in February, down from January’s 4%. That’s the lowest since September 2021, and a slightly larger fall than the City expected, data from the Office for National Statistics. The largest downward contributions to the monthly change in inflation came from food, and restaurants and cafes, the ONS said. The report showed that prices for food and non-alcoholic beverages rose by 5.0% in the year to February 2024, down from 6.9% in January. The February figure is the lowest annual rate since January 2022. The ONS reports that the annual rates for most types of food product eased between January and February 2024, with the largest effect coming from bread and cereals. It said: “Overall, prices for bread and cereals rose by 0.3% on the month, compared with a rise of 2.3% between January and February 2023. Prices of packs of cakes and some bread products (for example, white sliced loaves) fell between January and February this year but rose a year ago. The resulting annual rate for bread and cereals in February 2024 was 6.0%, the lowest observed since March 2022. Other smaller downward effects came from classes such as meat, vegetables, and milk, cheese and eggs. Overall, the annual rate eased in ten of the 11 food and non-alcoholic beverages classes with oils and fats the exception; its annual rate rising from 8.0% in January to 8.3% in February 2024.” Core CPI (which excludes energy, food, alcohol and tobacco) rose by 4.5% in the 12 months to February 2024, down from 5.1% in January. Goods inflation slowed from 1.8% to 1.1%, while the CPI services annual rate eased from 6.5% to 6.1%.

UKHospitality – sector creates light and life for UK high streets: UKHospitality has championed the importance of the sector for the regeneration of high streets to the government. Responding to the House of Lords built environment committee call for evidence at its “high streets in towns and small cities” inquiry, UKHospitality highlighted that sector businesses across the country play a key role in the regeneration of the country’s high streets, “creating the foundations of an area in which people want to live, work and invest”. UKHospitality chief executive Kate Nicholls said: “Hospitality and high streets have a symbiotic relationship. At their heart, they both deliver services for their local communities – for those who live, work and visit high streets in towns and small cities across the country. Hospitality venues create light and life on high streets throughout the day and through to the evening. The industry plays a huge part in regenerating town centres, from reinvigorating disused sites to working closely with local Business Improvement Districts to provide services for the community.” During the evidence session, UKHospitality also raised the need for more support from government in order for the industry to continue to play a vital role on high streets and in communities. The trade body again urged the government to review the current business rates system, reiterating the need for root-and-branch reform to rebalance the system.