Thu 3rd Apr 2025 - Wells & Co CEO – consumer confidence will get harder this year but we’re going to grow rather than cut our way out of this Wells & Co CEO – consumer confidence will get harder this year but we’re going to grow rather than cut our way out of this: Peter Wells, chief executive of brewer and retailer Wells & Co, has told Propel he believes consumer confidence “will only get harder this year” but the company will “grow rather than cut our way out” out of the cost pressures facing the sector. The company has estimated that the increases in tax and national minimum wage that kick in this month will cost it an additional £750,000 if left unmitigated. This on top of an estimated £150,000 in costs through new packaging rules, which UKHospitality have branded as “nonsensical” as sector businesses will have to pay twice for recycling. “In the UK, our growth plan is focused on improving what we already have,” Wells told Propel. “We’ll spend £500,000 in developing our managed estate this year to make sure our pubs are the best on the local circuit, as things are only going to get tougher this year. Consumer confidence will get harder and drop, so we need to make sure when people come to our pubs, the offer is the most appealing they can find. I think consumer confidence will take a big hit around September time, so we have six months to up the reputation of our pubs as being the best around. We’re focusing on a value proposition in our managed and leased and tenanted estates, with a strong food offer – like two courses for under a tenner – plus lots of events, as it’s getting increasingly harder to win market share.” As far as the government’s new Budgetary measures go, Wells said he “doesn’t think it’s a bad thing” that younger people will have more money in their pocket, but that a different model is needed for national insurance contributions, and that business rates reform “has to come into place”. He said: “We’ve taken some roles out and we feel we’re as lean as we can be. We’re going to optimise where we can and the focus in on maintaining a positive growth mindset. We’re not going to cut our way out of this, we’re going to grow our way out of it. We’re supporting our pub partners by holding our beer prices for them for the next 18 months and investing in their sites. We’re dialling up the value proposition and looking to drive lunchtime sales, which have dropped off. We will put some price on at the bar but do it carefully – we will hold the price on key lines to protect our regulars and put about 20p a pint on premium lines.” Another unwanted cost pressure, as far as Wells is concerned, is the forthcoming change to the business relief for inheritance tax – something he said is “vexing” for family businesses like his. “It’s an area we’re very worried about, and what’s even more worrying is the government is refusing to engage with anyone on this,” he said. While the company’s growth in the UK will focus on refurbishments this year, over in France, Wells expects to open its 20th pub there later this year and will aim to add two or three more a year thereafter. “Our focus is on France expansion-wise,” he said. “It is significantly cheaper in terms of access to sites and the cost of development. We are doing a redevelopment programme there too and will be spending about £1m across four sites. We have also been trialling electronic darts in our French pubs and will be doing a lot more of that across the estate.” The company has also signed off on its first chef school, with a central kitchen, and will be looking for potential partners for the venture. In terms of current trading, Wells said following a strong festive season, January and February were “really difficult” and consumer confidence was “pretty low”, but that March has seen a “massive turnaround” with sales 11% up on last year. This included putting “a lot of effort” into Mother’s Day, which looks to have paid off. In France, Wells said it has been a similar sales performance – “slightly ahead” in January and February and then up 6% in March. He also pointed to a new operations team, led by director of operations Rob Calderbank – who previously spent 13 years in operations and business development with Greene King – as being vital to the recent uptick. It come as Wells & Co reported turnover of £65,816,000 for the year to 29 September 2024, up from £62,305,000 in 2023, following an “improvement in the performance of our UK pubs and growth in France from both the underlying estate and also from the three new sites we added during 2024”. The company’s managed pubs delivered total revenue of £25.6m, up 3.6%, and Ebitda of £3.1m, up from £2m. In France, its managed pubs saw revenue grow by £1.2m to £15.2m, driven by three new acquisitions made during the year, although year-on-year Ebitda fell by £0.5m. Sales across the leased and tenanted pubs were up on last year by 4.6%, with Ebitda remaining at £9.8m. The group’s pre-tax profit grew from £1,313,000 in 2023 to £2,511,000, while group adjusted Ebitda grew from £9.5m to £9.8m “despite a 10% decline in property disposal profits”. The net debt position, excluding shareholder bond, is £33.1m (2023: £31.4m), while the net debt position, including shareholder bond, is £37.9m (2023: £36.2m). Chief financial officer Anthony Fryer said: “Higher sales have been achieved, although the benefits of this have been offset by higher utility costs, increases in payroll costs and continued pressure on food inflation. We sold one pub from the UK estate during the year, along with some parcels of land, generating £1.3m of net sales proceeds. Last year, we sold the Cross of St George in Paris, along with a sale and leaseback on the Bombardier, and these two transactions generated £1.7m of proceeds. The strategic intention was to reinvest these proceeds by adding new sites in France. We are pleased that this has been achieved, with us adding three new sites in France during 2024. The Houses of Parliament and the HMS Victory, both in Bordeaux, joined in December 2023, while the Queen Elizabeth, in Strasbourg, joined in June 2024.” Dividends of £2,165,000 were paid (2023: £1,235,000). Wells & Co features in the Propel Turnover & Profits Blue Book, which is available exclusively to Premium Club subscribers and features 1,092 companies. Wells & Co’s turnover of £65,816,000 is the 184th highest in the database. 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 supplier. Email kai.kirkman@propelinfo.com today to sign up.