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Highlights:
- Amid rising inflationary pressures, 50 pubs are downing their shutters in England and Wales, a new analysis has revealed.
- Between June-end and September, 150 pubs were either demolished or turned into offices and homes.
The hospitality sector is one of the worst sectors to take a hit during the UK's soaring inflation. Before it could recover from the COVID-19-induced challenges as lockdowns kept the shutters of hotels, pubs, and restaurants down, high prices have forced people to cut down on leisure activities. Besides, higher energy bills, labour costs, and the weather have been biting on their falling revenues. However, new research has highlighted the concerns over the sector's future.
As a report, approximately 50 pubs are shutting shop every month in England and Wales. The data, compiled by analytics firm Altus Group, revealed that between June end and September, 150 pubs were either demolished or turned into offices and homes.
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Based on government property records, the numbers indicated that closures the hardest hit England and Wales. Combined, the company added that these two regions now have a total of 39,800 pubs.
Altus Group reported that almost 200 pubs were shut in the first half of the year, while 400 closed last year.
Pubs are already reeling under high input costs and low revenues, passing on these higher costs as price rises. However, it makes them even less appealing to people looking to cut costs due to inflationary pressures.
Kalkine Media® explores some London-listed hospitality stocks and how they have been performing in the current scenario.
J D Wetherspoon PLC (LON: JDW)
The British company operates several pubs and hotels in the UK and Ireland. Recently, its chairman Tim Martin had warned of a "momentous challenge" to bring customers back to pubs after they drank beer brought from supermarkets during lockdowns. As supermarkets pay less VAT than pubs, Martin says it is impacting the pub industry. The FTSE 250-listed firm enjoys a market cap of £650.19 million. Its EPS is in negative territory at -1.47. The year-to-date and 12-month returns are also in the red at -47.71% and -48.28%, respectively. JDW shares traded 0.50% lower at GBX 502.50 as of 11:42 am GMT+1 on 10 October.
Mitchells & Butlers Plc (LON: MAB)
One of the UK's largest restaurant, bar and pub operators, Mitchells & Butlers belongs to the FTSE 250 index and enjoys a market cap of £666.08 million. Its one-year and year-to-date returns currently are at -57.07% and -53.18%, respectively, and the EPS stands at -0.26. MAB shares were 1.44% down at GBX 109.90 as of 11:46 am GMT+1 on 10 October.
Fuller, Smith & Turner Plc (LON: FSTA)
The London-headquartered company operates pubs, hotels, and inns across the southern UK. The FTSE-All Share constituent has a market cap of £183.94 million at present, with a positive EPS of 0.13. The stock's 12-month and year-to-date returns stand at -32.83% and -33.41%, respectively. FSTA stock price stood at GBX 463.00 as of 11:57 am GMT+1 on 10 October.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
