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Wed 9th May 2018 - Update: JD Wetherspoon, Greggs, AB InBev
JD Wetherspoon reports like-for-like sales up 3.5%: JD Wetherspoon has reported like-for-like sales increased 3.5% for the 13 weeks to 29 April 2018. Total sales increased 2.8%. Year-to-date like-for-like sales have increased 5.2% and total sales are up 3.8%. Wetherspoon said the third quarter last year included the early May bank holiday, but the third quarter this year did not, which is likely to have reduced like-for-like sales by about 0.5% in the period. Since the start of the financial year, the company has opened five pubs and sold 19. It intends to open one further pub in the current financial year. Wetherspoon said it believed the market value of its pub estate remained comfortably above the net book value. The company has spent £15.4m on buying the freeholds of pubs of which it was previously tenants and has bought back £51.6m of shares in the financial year to date. Wetherspoon said it remained in a sound financial position. The net debt at the end of the quarter was £754m and is expected to be about £740m at the end of the financial year. Chairman Tim Martin said: “A debate is currently taking place as to whether the UK should remain in the EU’s customs union post-Brexit. I feel sure the UK should leave. This will enable parliament to eliminate taxes on non-EU food and drink imports, reducing prices in the shops, which will immediately improve living standards. It makes no sense for the UK to continue to impose taxes on new world wines, coffee, rice and thousands of other products, and then to send the proceeds to Brussels. The EU masquerades as a free trade organisation, but it is really a protection racket that imposes import taxes on the 93% of the world’s population that is not in the EU. The UK should copy countries such as New Zealand, Australia and Singapore, which have successfully adopted free trade policies, rather than being beholden to the undemocratic EU and its unelected presidents. As anticipated, the rate of like-for-like sales growth slowed slightly in the third quarter. We continue to face significant cost increases in the second half in areas that include labour, business rates and the sugar tax. There is also some uncertainty as to the effect on sales of the FIFA World Cup. We continue to anticipate a trading outcome for this financial year in line with our previous expectations.”
 
Greggs reports like-for-likes up 1.3% as weather impacts trading: Bakery business Greggs has reported like-for-like sales were up 1.3% for the 18 weeks to 5 May 2018 compared with 3.5% the previous year. Total sales were up 4.7% in the first 18 weeks of 2018 (2017: 7.4%). A total of 41 shops were opened while there 12 closures. Another 36 refurbishments were carried out. Greggs reported “good progress” with investments in its supply chain. The company stated: “At our preliminary results presentation on 27 February we reported a good start to 2018, with company-managed shop like-for-like sales growth of 3.2% in the first eight weeks of the year. In the period that followed market data confirms weak customer footfall in retail locations, which has impacted demand for food-on-the-go. The impact was especially significant in the weeks of severe weather when many shops, including our own, could not be opened. The combination of these factors, along with our strong comparative performance in the same period of 2017, has made for a challenging trading environment throughout March and April. Average transaction values continued to grow but we saw a reduction in like-for-like transaction numbers. Customers continue to recognise the quality and value of our £2 breakfast offer, with Greggs recently recognised as Britain’s favourite for bacon rolls. Our hot food offering is another area of growing customer demand, providing food-on-the-go options for all times of the day. Sales of healthier options continue to grow as we extend the menu choice. We recently launched two new salads for the summer – feta and beetroot dip with grains; and lemon and herb chicken with roasted vegetables and grains. A range of new snack pots have been added to the menu and we also launched our first Balanced Choice sweet option, a Belgian chocolate pot. In the first 18 weeks we completed 36 shop refurbishments and opened 41 new shops, including 14 franchised units in transport locations. We closed 12 shops, giving a total of 1,883 shops trading at 5 May (comprising 1,669 company-managed shops and 212 franchised units). New shop openings remain focused on increasing the Greggs brand’s reach into new food-on-the-go locations and the relocation of existing shops. In recent weeks there have been a number of exciting high-profile openings including Westminster tube station, Birmingham New Street station, Glasgow Buchanan bus terminal and East Midlands airport. We are making good progress with the investments in our supply sites that will consolidate manufacturing operations and extend our distribution capacity to support further growth in shop numbers. Work is under way at our sites in Leeds, Newcastle and Manchester and planning is well advanced for work that will commence in the second half of 2018 at other sites. The quality of production from our new manufacturing lines in Glasgow and Leeds has been excellent. Sales in May have started more strongly than we experienced throughout March and April, however given the uncertainties over market footfall we are cautious in respect of the outlook for sales in the balance of the year. We are well positioned to compete for sales in the months ahead with the launch of our new summer menu featuring new sandwiches and salads and we will be extending our offer of value meal deals. Costs are being controlled tightly with food input cost inflation easing in line with our expectations, and we expect this trend to continue. Taking into account trading conditions in the year to date, and our more cautious outlook, we currently believe that underlying profits for the year are likely to be at a similar level to last year.”
 
AB InBev reports double-digit UK growth: Anheuser-Busch InBev (AB InBev) has reported double-digit revenue growth in the UK as global sales increased 4.7% in the first quarter of this year. On a constant geographic basis, revenue globally per hectolitre grew by 4.9%. Total volumes declined by 0.2%, while own-beer volumes were up 0.5%. AB InBev north Europe president Jason Warner said: “Our UK business has had a strong start to the year, momentum from last year’s double-digit growth continues with organic growth across our portfolio of leading premium beers and ciders. Turning to our portfolio, in its first year of launch, Bud Light is driving total market volume growth and after introducing the brand in bottle – as well as Dilly Dilly – to the UK in February, it remains a significant bet for us. In fact, bottles now make up a fifth of total Bud Light value sales. Elsewhere in our no-alcohol and low-alcohol portfolio we are seeing strong momentum, with a nationwide sampling tour of Budweiser Prohibition in January, giving out 200,000 beers for all those moderating in the new year. This area will remain a focus for us, as part of our Global Smart Drinking Goals to ensure 20% of our global volumes are no-or-low-alcohol by 2025. In the first quarter we also launched our new sustainability goals, which include ambitious commitments in four key areas of our business – smart agriculture, water use, energy use and packaging. This forms part of our focus on long-term, sustainable growth and putting our weight behind causes that we know our consumers are passionate about. Our global brands are getting behind the action too – Corona has committed to protect paradise and tackle marine plastic pollution; Budweiser is on the way to being brewed with 100% British barley and 100% renewable electricity and Stella Artois gives ongoing support of water.org in the fight against the global water crisis. In terms of trends shaping the market, premiumisation continues to drive growth in value and volume the category. Looking ahead, we have big plans for the rest of the year, with Budweiser set to take advantage as official beer of the FIFA World Cup, followed by its partnership with the FA kicking off in August. This will see the brand continue its sponsorship of the FA Cup, as well as take on the England men’s team and Wembley stadium. We can’t wait to upgrade the pouring experience for fans at this iconic venue, and show up with our full portfolio of premium beers and ciders. As part of the summer of sport ahead, we want to increase our visibility in the on-trade and help these customers to maximise the opportunity these celebrations will bring. The UK pub and hospitality sector is so crucial to our industry, and wider economy, which is why we were pleased to be able to support C&C Group last month in its bid for Matthew Clark Bibendum, part of Conviviality. The move gave stability and assurance to the drinks industry, ensuring its future health, and we look forward to continuing our good working relationship with our partners over the coming months and years.”

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