Shepherd Neame toasts record sales as return of workers to London pubs offsets loss of trade from rail strikes
- Britain’s oldest brewer saw its half-year revenue increase by 8.4% to £85.3m
- Shepherd Neame’s pubs in the City of London received a much-need boost
- Good summer and autumn weather benefited the company’s coastal sites
Shepherd Neame achieved record first-half turnover at the end of last year despite losing around £250,000 worth of sales from the rail strikes in December.
Britain’s oldest brewer’s revenues grew by 8.4 per cent to £85.3million in the 26 weeks ending Christmas Eve, the first six-month period without any Covid-related trading restrictions for the group in three years.
Its pubs in the City of London, which were severely hit by remote working and a lack of international tourism during the height of the pandemic, received a much-needed boost from the return of office workers.
Cheers!: Shepherd Neame saw half-year revenue grow by 8.4 per cent despite losing around £250,000 worth of sales from the rail strikes in December
Like-for-like sales at the firm’s retail establishments inside the M25 motorway jumped by 39.1 per cent, compared to just 3.4 per cent outside the ring road, with drinks orders driving most of the growth.
Trading outside the UK capital still remained above pre-pandemic levels as good summer and autumn weather benefited the company’s coastal sites.
Shepherd Neame said it further benefited from ‘generally good’ sales over the festive season, although fewer large parties took place than it would have anticipated before the pandemic.
But railway strikes also cost the group an estimated £250,000 in lost trade in December, with many residents of London commuter towns forced to work from home for much of the month.
Nonetheless, the family-run business, whose beers include Spitfire, Bishops Finger, and Whitstable Bay, said revenues in all six individual months of the period were higher than in the previous year.
For the 12 subsequent weeks following Christmas Day, its comparative retail turnover rose by 12.8 per cent thanks to resilient consumer spending levels against a backdrop of soaring energy prices and other inflationary pressures.
Difficulty: ‘This has been a tough time for anyone in the hospitality sector, with one crisis rolling in to the next,’ said chief executive Jonathan Neame (pictured)
As well as electricity and food costs, Shepherd Neame said the cost hikes affecting the broader UK economy have resulted in ‘huge increases’ in its glass, brewing raw materials, packaging waste and logistics bills.
To minimise cost burdens, the firm has wholly capped gas and electricity prices at its Faversham brewery until September 2024 and agreed contracts to protect itself from cost rises from direct utility purchases.
However, it warned that further price increases for customers would need to be made in the coming months, while the incoming expansion in the National Minimum Wage would push up salary costs further.
Chief executive Jonathan Neame said: ‘This has been a tough time for anyone in the hospitality sector, with one crisis rolling in to the next.
‘The events of the last few years demonstrate how unpredictable such things can be, and we remain flexible and agile to respond to further events.’
Yet the group believes most of its raw material and input costs will begin to stabilise in the second half of the financial year before easing afterwards.
Neame added: ‘We have an excellent pub estate with considerable potential, well-established brands, a loyal customer base, and a high profile within the individual communities we serve.
‘All these factors will stand us in good stead as the cost of living crisis eases and the economy returns to growth.’
Founded officially in 1698, Shepherd Neame operates more than 300 pubs across London and the South East of England and exports its beer and cider to over 35 countries, according to its website.