Pub group Shepherd Neame says supply disruption ‘easing’

Pub and brewing group Shepherd Neame has said that industry supply chain pressures are “easing” as the firm reported a strong recovery in demand.

The company, which runs 310 pubs primarily in the South East, said it has been “encouraged” by the rebound in customer demand since restrictions were phased out from April.

Jonathan Neame, chief executive officer, told the PA news agency that demand has “been beyond expectations” at each phase of the reopening.

The group said sales since the start of the new financial year in July have been particularly promising, with this month seeing a particular increase in demand for food and accommodation.

Meanwhile, drinks trade has had its recovery boosted by the return of office workers in September, particularly buoying trade on Tuesdays, Wednesdays and Thursdays.

Shepherd Neame financials
Shepherd Neame’s chief executive officer Jonathan Neame said supply chain issues have eased (Shepherd Neame/PA)

Shepherd Neame said like-for-like sales across its retail pubs over the 18 weeks to October 30 were 91% of pre-pandemic levels and saw a 37% increase against the same period last year.

Meanwhile, like-for-like drink sales were 76% of 2019 levels for the period, while staycations helped to drive strong growth in room demand.

Nevertheless, the company said it has seen “challenging” supply pressures in recent months.

Mr Neame told PA: “The supply chain issues have been particularly challenging but I think we are the right side of that now.

“Obviously we are still managing that, but we are seeing those issues easing and we are really well-positioned for Christmas.

“There have been times when we haven’t been able to stock specific wines or imported beers we usually would because of logistical issues, but we have been able to adapt and our customers have reacted well.”

The chief executive said the business has also seen inflationary pressures in recent months and expects these to continue into next year.

It came as Shepherd Neame reported a pre-tax operating loss of £4.2 million for the year to June, compared with a £1.5 million profit last year.

Mr Neame added: “We are greatly encouraged by the customer response since reopening and are confident that beer and pubs remain every bit as core to British life as pre-pandemic.

“We look forward to 2022 with optimism and, with every day that passes, confidence grows that we can not only recover lost ground, but recover well, unlock growth opportunities and release the full potential of the business.

“We intend to return to prior levels of investment and restore the dividend as soon as circumstances allow.”