Greene King poised to complete exit of Fayre & Square

Greene King said this morning that it would complete its exit from Fayre & Square by the end of the month as it makes progress with a huge rebranding exercise that was first unveiled last year.

The company confirmed it was close to phasing out the family-focused pub brand in a trading update this morning, adding that it continues to “reposition” the business for future growth.

Fayre & Square was deemed surplus to requirements after Greene King embarked on a major brand optimisation strategy when it completed the integration of Spirit Group, which it purchased for £774m three years ago.

Last year CEO Rooney Anand said Fayre & Square had been a “real drag” on performance, according to newspaper reports. Many former Fayre & Square sites have already been converted to Greene King’s successful Hungry Horse format.

Greene King’s current strategy is targeted at creating efficiencies through having a smaller number of larger pub retail brands, including the five “focus” brands of Greene King Locals, Hungry Horse, Flaming Grill, Farmhouse Inns and Chef & Brewer.

In its last full year it spent £30m on brand conversions with 63 pubs converted to more suitable brands within its portfolio. Average sales uplift for these pubs has exceeded 30%, while last year it earmarked annual investments of £30m to £40m for further brand conversions between 2018 and 2020.

Green King this morning had mixed news for investors, as it revealed that like-for-like sales for the 49 weeks to April 8 fell 2%. It said the weather had impacted trading over the past 12 weeks, particularly in its destination food-led pubs. Both drink and accommodation like-for-like sales were ahead of last year, however.

The company noted that trading over Easter was “strong” with like-for-like sales up 3% against the same period last year, boosted by strong sporting fixtures, especially football and boxing.

Greene King made a £10m investment to strengthen its value for money, customer service and quality in the second half of the year and it said this had positively impacted on trading, despite the continued “challenging” market backdrop.

The group has opened nine new pubs over the year and invested core and brand conversion CAPEX in 292 pubs. It has spent £160m ensuring its 3,000-strong estate remains well-invested while the sale of three high value leasehold pubs is expected to swell disposal proceeds to £120m. As a result, full-year profit before tax and exceptionals is forecast to be in the range of £240m to £245m.

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