Page last updated at 10:35 GMT, Friday, 25 July 2008 11:35 UK

Demand for food drives pub trade

Beer drinker
Pubs have been hit by poor weather

British pubs firm Mitchells & Butlers said trading had picked up over the past ten weeks, helped by strong demand for food, a trading update shows.

The owner of the Harvester and All Bar One chains said that full-year earnings should meet expectations.

Pub companies have struggled recently following the smoking ban, a fall in beer sales and poor weather.

The company saw like-for-like sales rise 1.1% in the ten weeks to July 19, driven by a 5.1% rise in food sales.

Drink sales were down 0.2%.

"Market conditions continue to be characterised by robust demand for good value pub food and associated sales of drinks while on-trade beer market volumes have continued to fall by about 10% over the past quarter," Mitchells & Butlers said.

Separately, Britvic, Britain's second-biggest soft drinks maker after Coca Cola, warned of tough trading conditions in the soft drinks market, largely because of the rising cost of raw materials.

In recent weeks, pub groups have reported a mixed set of results.

  • Enterprise Inns has warned that falling beer sales and the cost of helping its struggling pub tenants is putting pressure on its profits.
  • Pub chain JD Wetherspoon said that food and drink deals helped lure customers through its doors, despite the smoking ban introduced in England a year ago. The group, which owns 700 pubs in the UK, saw like-for-like sales rise 0.4% over the past 11 weeks.
  • Brewer and pub owner Greene King reported a rise in annual profits despite facing what it said was an "unprecedented set of challenges". Pre-tax post-exceptional profits rose 1% to 147.9m in the year to 4 May, as sales increased 5% to 960.5m.

According to the British Beer and Pub Association, there were 1,400 pub closures last year, compared to 200 the year before. That works out at about 27 a week.

The cost of supermarket alcohol - making it cheaper to drink at home - and the smoking ban and rising costs of food are cited as some of the reasons for staying away or staying in.


SEE ALSO
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Enterprise Inns wins FTSE place
10 Mar 04 |  Business

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