PUBS and brewing group Greene King today reported a further slowdown in sales growth and warned of "fragile" consumer confidence this year.
The firm’s managed pubs - including the Hungry Horse and Old English Inn chains - grew like-for-like sales 3.6% in the 49 weeks to April 11, down from 4.3% after 38 weeks of the year.
The Old Speckled Hen and IPA brewer also said beer volumes were up 3.9% in a beer market showing 6% declines - also below the 7.2% growth seen in January.
The Suffolk-based firm warned: "We are still cautious for the remainder of 2010 as election uncertainty, rising taxes, public sector cutbacks and fragile consumer confidence may continue to limit consumer spending."
The company is confident of meeting profit targets for the year after a "strong" performance but shares in the firm fell 4%.
The group also reported stronger than expected sales from recent acquisitions after spending #86 million - almost half of last year's rights issue proceeds - on bolstering its estate and buying back debt cheaply.
Greene King said it was confident of driving further growth through acquisitions this year while maintaining financial discipline.
There were also signs of stabilisation at Greene King’s tenanted pub business, with average earnings per pub 3.4% down after 48 weeks but broadly stable compared with last year.
The cost of support measures to struggling licensees will now be below £6 million for the current financial year, compared to the £6 million to £6.5 million previously guided by the firm.
Panmure Gordon analyst Simon French said the trading update was "mixed" with the tenanted business showing the healthiest signs.
"Like-for-like sales growth in managed pubs has moderated as expected but beer volume declines are greater than anticipated," he said.
