Annual accounts filed by Stonegate Pub Company have revealed the company still expects food sales to lag behind drink sales, at least while the market remains “oversupplied”.
Historical results for the 12 months to 24 September 2017, posted on Companies House last week, show the chain achieved drink sales growth of 3% for the period, whereas food sales decreased 2.3%. That followed a 0.1% decline the year before.
The company, which runs 700 pubs in the UK, said that trading for drink-led businesses continued to outperform the overall retail sector as well as food-led businesses last year. And it expects the trend to be unchanged in 2018.
“The reason for this is that although the food market as a whole is growing more than drink, we believe that there is an oversupply in this market, leading to an extremely competitive environment and like-for-like sales growth being difficult to achieve. In contrast, we are seeing value growth in drink as people are looking for more choice and ‘premiumising’ their drink of choice.”
Stonegate is the second largest managed pub operator on the high street. Approximately 76% of its pubs are located in town centres, providing it with the second largest pub estate located in town centres of any UK pub operator.
It brands include Slug and Lettuce, Walkabout and Yates.
Stonegate posted pre-exceptional operating profit of £43m on a turnover of £697m last year.