Shepherd Neame toasts record sales as workers return to London pubs
Shepherd Neame cheers to record sales as workers return to London pubs offset trade loss from rail strikes
- Britain’s oldest brewer saw its half-year turnover rise 8.4% to £85.3m
- Shepherd Neame’s pubs in the City of London got a much needed boost
- Good summer and fall weather favored the company’s coastal locations
Shepherd Neame achieved record first half sales late last year, despite losing around £250,000 in sales due to the rail strikes in December.
Revenues for Britain’s oldest brewer rose 8.4 per cent to £85.3m in the 26 weeks ending Christmas Eve, the group’s first six-month period without any Covid-related trade restrictions in three years.
Hard hit by remote working and a lack of international tourism during the height of the pandemic, pubs in the City of London received a much-needed boost from the return of office workers.
Cheers!: Shepherd Neame saw half-year sales grow 8.4 per cent, despite losing around £250,000 in sales to the rail strikes in December
Like-for-like sales at the company’s stores within the M25 motorway rose by 39.1 per cent, compared to just 3.4 per cent outside the ring road, with drinks orders accounting for most of the growth.
Trading outside the UK capital still remained above pre-pandemic levels as good summer and autumn weather favored the company’s coastal locations.
Shepherd Neame said it further benefited from ‘generally good’ sales over the holiday season, although there were fewer major celebrations than expected before the pandemic.
But rail strikes also cost the group an estimated £250,000 in lost trade in December, with many residents of London’s commuter towns forced to work from home for much of the month.
Nevertheless, the family-owned company, whose beers include Spitfire, Bishops Finger and Whitstable Bay, said revenues in all six separate months of the period were higher than in the previous year.
In the 12 following weeks after Christmas Day, relative retail sales rose 12.8 percent on the back of resilient consumer spending amid rising energy prices and other inflationary pressures.
Difficulty: ‘This has been a difficult time for everyone in the hospitality industry, with one crisis after another,’ said CEO Jonathan Neame (pictured)
As well as electricity and food costs, Shepherd Neame said the cost increases affecting the wider UK economy have led to ‘massive increases’ in glass, brewing raw materials, packaging waste and logistics bills.
To minimize costs, the company has fully capped gas and electricity prices at its Faversham brewery until September 2024 and has agreed contracts to protect itself against cost increases from outright utility purchases.
However, it warned that further price increases for customers are needed in the coming months, while the incoming increase in the National Minimum Wage will push wage costs further up.
Chief executive Jonathan Neame said: ‘This has been a difficult time for everyone in the hospitality industry, with one crisis after another.
“The events of recent years show how unpredictable such things can be, and we remain flexible and agile to respond to future events.”
Still, the group believes most of its raw material and input costs will begin to stabilize in the second half of the year before falling in the next fiscal year.
Neame added: ‘We have an excellent pub estate with significant potential, established brands, a loyal customer base and a high profile within the individual communities we serve.
“All of these factors will serve us well as the cost-of-living crisis eases and the economy returns to growth.”
Officially founded in 1698, Shepherd Neame operates more than 300 pubs in London and the South East of England and exports its beer and cider to more than 35 countries, according to its website.