Supporting tenants through tough times caused by the credit crunch is set to cost pub company Marston’s £2m during the current financial year.
Marston’s saw its profits fall 1.2% in the 43 weeks ending 26 July at its tenanted and leased division due to falling beer sales and less gambling machine income.
It said that given the current economic conditions faced by licensees it would offer a policy of sustainable rents for each pub.
Managed division Marston’s Inns and Taverns saw its sales fall 0.6% during the same nine month period but did give some encouragement, claiming that in the past 13 weeks sales were up 0.5%.
The pub company echoed its pub rivals’ recent statements that operating costs, particularly food costs and utilities, had seen significant increases.
The company is also reviewing the potential for conversion to a real estate investment trust, similar to the model being evaluated by rival pub groups Punch Taverns, Enterprise Inns and Mitchells & Butlers.
Ralph Findlay, chief executive of Marston’s, said: “Although the market is difficult, and we do not expect any improvement in the economy in the short term, we are still seeing growth in eating out in Marston's pubs despite the squeeze on discretionary expenditure and weaker confidence.”
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By Christopher Walton
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