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Marston’s brushes off supply chain disruptions as sales recover

Marston’s

Marston’s today said it had reasons to cheer after reporting a continuous improvement in trading since restrictions were lifted in April despite the supply chain headwinds facing the industry.

For the most recent quarter from 25 July to 2 October, the pub chain saw a return to growth over 2019, with sales 2% higher across its managed and franchised pubs.

Overall, trading since 12 April has been at 94% of 2019 levels, which includes the benefit of the temporary VAT reduction on food and non-alcoholic drink sales, the company said.

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The wider industry is facing much-publicised challenges in respect of staff recruitment and cost inflation, alongside supply issues.

But Marston’s said that whilst the labour market remains tight, particularly in city centres, it is currently managing the issue “well”.

It said the national minimum wage increase was in line with our expectation of a resumption of the 5%-6% increase, which it was observing before the pandemic.

The majority of its 2022 costs are now contracted in, specifically gas to 2023 and electricity to the end of March 2022.

With regards to supply chain challenges, it has seen some small pockets of disruption, however it said it is working closely with its suppliers to manage this.

CEO Andrew Andrea commented: “We are delighted to be fully open again since trading restrictions were lifted in July. We are encouraged by the trading momentum which we have experienced since April and pleased to be trading robustly and above 2019 levels again.

“Our business benefits from an optimally balanced pub estate of food and wet led pubs that are predominately suburban, community based and well located for the changes in consumer behaviour that we are seeing. However, we are mindful of consumer confidence in the short term and the challenges impacting the economy and our industry. Government messaging will remain a key factor in determining sentiment.”

Total pub sales for the year to 2 October 2021 reached £402m, representing 78% of last year, reflecting the significant disruption to trading from the pandemic.

Marston’s said that its pubs were open for only 54% of the total trading days during the year.

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Andrew Seymour

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