Specialist
Former executive at Punch Taverns Ltd
Agenda
- Q2 2022 trading update and capacity levels
- Cost inflation and profit consequences
- Industry competition – wet-led vs food-led, pub chains vs independents and potential M&A opportunities
- H2 2022 outlook – potential impact of further cost inflation from labour and energy
Questions
1.
What 2-3 key trends or observations have you made about the UK pub sector over the past three months since we last spoke [see Forum Pulse: UK Pub Sector – Q1 2022 Trading Update & Cost Impacts – 29 March 2022]?
2.
Thinking about the like-for-like figures you rattled off, how should we view sales growth? How should we view trading on a more regional basis? How have city centres been trading, and have we seen a great uptick there in the last quarter?
3.
You mentioned staff shortages. What do you think this means for the level of capacity the industry is operating at?
4.
What type of performance are we seeing across wet- vs dry-led pubs? Is there any difference across these two categories?
5.
Given the food business can hide cost and pass it on a bit easier, could food-led businesses weather the storm slightly better from a profit standpoint, even though food comes with slightly lower margins than drinks?
6.
How can operators pass prices on? Are operators passing them on in full at the moment? How are they looking to manage this, and what tactics or levers are being pulled?
7.
What’s happening on the cost inflation side and how the cost buckets are evolving? What are you really seeing in terms of cost and the pass-through in that sense?
8.
Is there any chance that margins can hold in the next 6-12 months given your comments? Is any kind of margin stability, let alone accretion, almost impossible?
9.
What’s your outlook for the industry over H2 2022 given your comments on consumer behaviour? As everyone has mentioned, a consumer squeeze is probably coming given the prices, and there’s talk of recession. What does this all mean for people visiting pubs, like-for-likes and trading levels through H2 2022 into H1 2023?
10.
Do you expect a decrease in CAPEX with pubcos pulling back to protect their balance sheets?
11.
What do you think about M&A optionality? Obviously, a lot of pubcos are coming up in a bit of a distressed way. Could this push M&A opportunities for some of the bigger players?
12.
Do any players stand out to you as well-positioned to take control or benefit from the opportunities coming to market? Are any players more resilient and able to withstand the pressures in terms of cost and so on?
13.
Are there any closing facts or points that you want to leave with us as we go into Q3 and Q4 2022?
