Cheers to sales growth in pubs

Endeavour surges

AUSTRALIANS are enjoying spending more time and money at their local pub, extending their stay by hours as the pandemic lockdowns become a distant memory.

Endeavour Group, which owns liquor chains Dan Murphy’s and BWS, as well as a large portfolio of pubs and hotels, is capturing much stronger sales from its pubs and hotels arm led by huge demand for food, which is now the fastest-growing part of its pubs business, while sales at its liquor outlets continue to moderate after hitting pandemic peaks.

Bookings for Christmas lunches and dinners at its pubs are already more than double for the same time last year, with Endeavour’s pub network now sitting on bookings covering 30 per cent of its capacity of 44,000 places and up from bookings of about 15 per cent at this time in 2021.

Unveiling its first quarter trading performance on Monday, chief executive Steve Donohue said he was witnessing patrons at his 344 pubs and hotels spending more time at his venues, with the outlook for pubs not expected to be tainted by global economic and geopolitical worries.

Endeavour reported total sales up 3.1 per cent to $3.028bn for the first quarter and in line with market expectations.

Endeavour, which was spun-off by Woolworths last year, said retail sales at its bottle shops fell 6.2 per cent to $2.49bn for the 14 weeks in the first quarter. Hotel sales soared nearly 91 per cent to $4538m.

UBS analyst Shaun Cousins said Endeavour was benefiting from reopenings as consumers socialise again at pubs and look to spend up on food at the bar, with that looking to be growing at a faster pace than gaming machines in the licensed venues.

“Bar and food sales growth exceeds gaming growth due to later cycle reopening, yet all growing strongly, with hotel sales per store ahead of preCovid levels. Retail (bottle shops) decline as expected due to channel shift to out of home consumption.”

Mr Donohue said the business was continuing to see a return to more normal trading patterns after the end of lockdowns and travel restrictions, with the reopening of pubs and hotels seeing a pivot of demand from liquor chains to venues.

The business was also beating its performance since before the pandemic.

“Pleasingly, on a three-year basis we are trading well ahead in both hotels and retail.

:Our headline sales in retail are up 13.9 per cent, compared to the first quarter of 2020, which represents a compound annual growth rate (CAGR) of 4.4 per cent. Our hotels result was equally strong, with a three-year CAGR of 4.8 per cent,” Mr Donohue said.

Endeavour will hold its annual general meeting in Sydney on Tuesday.