Marston’s pubs earnings pushed to pre-pandemic levels by World Cup

World Cup fever has boosted drinks sales at Marston’s pubs by 50% as the chain looks forward to a bumper festive season with Christmas bookings running ahead of pre-pandemic levels.

The group, which runs 1,468 pubs across the UK, said that the combination of the World Cup and the first Christmas free of pandemic restrictions in three years has fuelled a revival for the embattled hospitality sector.

Marston’s reported an almost doubling of revenues to £800m for the year to 1 October, transforming a loss of £171m last year into a pre-tax profit of £163m.

The company, which is pushing through price rises of up to 10% as its own costs soar, said that trading at its pubs since the start of October is up 6.8% compared with last year, with festive bookings ahead of 2019 levels.

“Current trading to the end of November has been positive, with encouraging levels of Christmas bookings as we look forward to the first restriction-free festive period in three years,” said Andrew Andrea, chief executive of Marston’s.

However, the company said that soaring increases in food, drink, labour and energy bills resulted in annual operating costs rising from £492m to £657m.

“We continue with a relentless focus on managing costs to mitigate the inflationary impact on the business,” the company said. “We expect to offset some of these higher levels of inflation through a combination of cost efficiencies and pricing strategies.”

The hospitality industry is braced for the impact of next week’s rail strikes, which are due to resume from Tuesday, with timetables reduced by 80%. The RMT union also said it plans to strike from 6pm on Christmas Eve until 7am on 27 December.

UKHospitality’s chief executive, Kate Nicholls, said the strikes would be “hugely damaging” for hospitality.

“Our estimate of the cost of these strikes already stood at £1.5bn in lost sales and it’s incredibly frustrating that a solution has yet to be reached to avoid this disruption during the golden month of trade for our sector,” said the boss of the hospitality trade body.

SSP, which owns Caffè Ritazza and Upper Crust and has sites in about 2,800 transport hubs including airports and railway stations, has returned to profit thanks to a rapid recovery in the travel industry.

The company made a pre-tax profit of £25m in the year to the end of September, compared with a £411m loss due to widespread travel restrictions last year. Global sales were on average 4% ahead of pre-pandemic levels in October and November.

“The recovery in passenger numbers has been led by strong leisure travel demand over the summer holiday season, which has continued well into the autumn,” the company said.

However, the company said that its UK business is lagging behind the global rate of recovery, with sales currently running at 84% of pre-pandemic levels.

SSP said this was due to the higher proportion of its business coming from rail station outlets than at airports compared to other markets. The company said that the rail sector in the UK is recovering more slowly, and expects further impact from the latest strikes.

“Since our year-end trading in the UK has remained at similar levels to the fourth quarter of last year, with further impacts from the ongoing industrial action in the rail network,” the company said.

In line with businesses across the hospitality sector, SSP also reported an almost £1bn increase in operating costs, from £1.1bn to £2.09bn year-on-year.

The company recorded an almost doubling of its staff costs, from £352m to £687m. Food and materials soared from £235m to £610m, and rental costs on leases rose from £96m to £299m.

“SSP has a heavy dependency on railway station sites, so the management team will be crossing their fingers that the industrial action we’ve seen this year doesn’t spill over into 2023 and continue to suppress passenger numbers,” said Lara Martinez, food sector and retail analyst at Third Bridge. “It will be a challenge for SSP to avoid margin erosion, particularly in the UK. It is difficult to pass on inflationary costs to customers because SSP already offers premium pricing.”