Greene King has warned that consumer spending is likely to suffer following Britain’s decision to leave the EU.
Rooney Anand, the chief executive of the pubs group, said less was spent in the run-up to the referendum and that he thought this trend would continue. The UK’s exit would need time to be implemented and the resulting uncertainty was likely to hold back the economy as a whole, he added.
“The increasingly uncertain trading environment is likely to weigh on consumer sentiment in the near term,” Anand said. “We will not be immune from its effects, but our business has shown resilience in the past.”
The comments came as Greene King announced a 61% rise in pre-tax profits to £189.8m for the year to 1 May, with revenues reaching £2.1bn for the first time. The company’s integration of rival firm Spirit, recently acquired for £774m, has been successful. Like-for-like sales increased by 1.5%, beating the market, which was up by 1.3%.
Anand said Greene King, which brews ales including Old Speckled Hen and Belhaven Best, had limited exposure to European sales, although it would be affected by the weaker pound through overseas sourcing. “We will look to mitigate the impact of this as far as possible,” he said
The referendum aside, Anand said eating and drinking out in the UK remained a “dynamic market with intense competition for every pound in the consumer pocket”. The pubs group is competing with supermarkets and takeaway outlets, which have made staying in more attractive.
Greene King, founded in 1799 and based in Bury St Edmunds, Suffolk, employs 44,000 people across 3,035 pubs, restaurants and hotels, and at its breweries in Bury and Dunbar.
England football fans drowned their sorrows at home after the country crashed out of Euro 2016 on Monday. This was bad news for pubs, but proved a boon for convenience stores as customers headed to the shops to stock up on alcohol following the defeat to Iceland.
Alcohol sales at convenience stores rose by 23% between 10pm and midnight, compared with the June 2015 average, according to data from EposNow.com.
