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Christmas bookings at Fuller, Smith & Turner are running 11 per cent ahead of last year, setting the UK pub chain up for its strongest festive trading period since before the pandemic.
Simon Emeny, Fuller’s chief executive, said on Wednesday that he was approaching December, typically the pub chain’s most profitable month, “with a great sense of optimism”.
“We haven’t had a proper Christmas at Fuller’s since 2019,” said Emeny, referring to how pandemic restrictions and then last year train strikes had nixed trading over the key festive season.
Emeny added that the possibility of further strike action over winter by the Aslef union was the “only thing” that could yet scupper plans, calling on the government to strike a deal with train drivers.
“I think what we are seeing in the industry at the moment is that around key events, demand is very strong,” said Emeny, adding that the pub chain had noticed an uptick in both corporate bookings in early December and family bookings later in the month.
Fuller’s announced on Wednesday that revenues in the six months to the end of September stood at £188.8mn, up from £168.9mn during the same period last year. Adjusted pre-tax profits were also up 48 per cent year on year to £14.5mn, the pub chain added.
Emeny said trading in Fuller’s 27 pubs in the City of London, which contribute nearly a quarter of group revenues, was “particularly strong”. Like for like sales in the 32 weeks to November 11 were up 11.7 per cent across its 385 sites.
Shares in the London-listed group were up 4.5 per cent to £6 in early morning trading.
Fuller’s was also benefiting from a reduction in input cost inflation, according to Emeny, as the Office for National Statistics reported on Wednesday that inflation in the year to October fell to 4.6 per cent.
“[The] biggest reduction we’ve seen is in energy costs. Food inflation is coming down quite significantly and also, for us, drinks inflation is coming off as well,” said Emeny.
But Emeny warned that if the government does not announce a continuation of the business rates discount at the upcoming Autumn Statement the pub sector could face a fresh wave of closures. “In a tough trading environment, it’s critical for the whole sector,” said Emeny.
“For many small operators once they’re past Christmas, their decision as to whether to carry on will depend on this business rates decision,” he added.
Analysts at Peel Hunt said in a note that Fuller’s was “well placed to benefit from falling energy costs and fewer transport strikes”, referring to how the RMT, the UK’s biggest transport union, had agreed to end strike action after almost 18 months.
But the Peel Hunt analysts warned that “the consumer backdrop could make it harder to pass on higher labour costs in calendar 2024”.
