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Highlights
- The UK based pubs, bars, and restaurants witnessed a good recovery in sales for a third consecutive month.
- Pubs sales rose by 3% in October 2021, while bars reported sales growth of 13% during the same period.
The UK based pubs, bars, and restaurants witnessed a good recovery in sales for a third consecutive month. Pubs sales rose by 3% in October 2021, moving ahead of pre-pandemic levels due to ease in restrictions and rebound in the late-night market. Also, bars reported sales growth of 13% as per the latest data by the CGA, RSM, and The Coffer Group.
On a yearly basis, sales were up by 64% compared to October 2020. The market for bars and late-night life is huge and provides a sustainable growth opportunity. However, the sector continues to face certain issues like rising food, drinks, and energy costs due to inflation, supply chain disruption, and labour shortage. Despite shortcomings, the sector anticipates recovery and substantial growth during the Christmas festivals.
The sales growth in the capital city, London continues to remain slow because of lower tourist count and shortage of office workers. As a result, London’s sales growth was down by 4%.
Let us look at 3 FTSE listed stocks from the bars and restaurant segment that can be considered a good buy:
Mitchells & Butlers Plc (LON: MAB)
The company operates pubs and bars in the UK and Germany under various brands and formats. It manages close to 1,738 pubs and bars and is also engaged in property leasing and retailing business. The company’s total sales were at 45% compared to pre-Covid levels, including 18 weeks of lockdown led to closure, for the 51 weeks ended 18 September 2021.
However, after 17 May, when most of the company’s properties were opened, the sales were at 97% of pre-Covid levels. As per the company, it has a strong portfolio of diverse estates that will help the company recover fully from the pandemic during the upcoming quarters.
Mitchells & Butlers Plc’s last close was at GBX 239 on 12 November 2021, with a market cap of £1,426.19 million.
Marston’s Plc (LON: MARS)
The company operates in pubs, bars and brewing segments, managing over 1365 bars and pubs in the UK and other countries. It is also involved in many other businesses like property management and insurance. The company reported continuous improvement in business after restrictions were lifted on 12 April. The total sales revenue was at £402 million for the 52 weeks ended 2 October 2021. In addition, in the last quarter from 25 July to 2 October the company reported higher sales growth than pre-Covid sales levels.
Marston’s Plc’s last close was at GBX 77.15 on 12 November 2021, with a market cap of £489.25 million.
Wetherspoon (JD) Plc (LON: JDW)
FTSE250 listed company operates close to 875 pubs and 58 hotels in the UK and Ireland. It reported an 8.9% decline in sales compared to 2019 levels in the first 15 weeks to 7 November 2021 of the new financial year. The sales were impacted by lower business from the airports, stations, hotels and also in Northern Ireland and Scotland. However, the company expects a bounce-back in consumer demand and higher sales in upcoming quarters.
Wetherspoon (JD) Plc’s last close was at GBX 942 on 12 November 2021, with a market cap of £1,212.83 million.
