The £10 pint remains a long way off for Young’s, with the pubco’s caution around pricing helping drive sales, CEO Simon Dodd tells MCA.
While customers are prepared to spend more for a premium product, Young’s has been sensible with pricing, with its entry point remaining under £6 for a pint.
“It’s important the pub is accessible,” Dodd says. “Overall, people are prepared to pay more for a premium environment, premium service, and a premium product.
“We’re hearing about pints costing £8, £9, £10…but the £10 pint is far off for us.”
Dodd was speaking to MCA after the pub operator reported a landmark year in the 52 weeks to 1 April. Revenue rose 7.4% to £388.8m, with like-for-like growth of 3.4% alongside industry-leading profitability.
“A rigorous approach to conversion has enabled us to deliver,” Dodd continues. “It speaks to our long-term strategy of running premium, well invested pubs.
“This strategy of investing in our pubs, our offer, and our people will pay dividends.”
Young’s is currently taking a “breather” from acquisitions, with the current financial year more focused on consolidation.
The acquisition and subsequent integration of City Pubs is progressing well. Combined, the group will stand at nearly £500m in turnover by next year, along with a property value of over £1bn, according to Dodd.
“We have enough to do this year in terms of consolidating the great things we’ve done,” he explains. “Next year, we’ll go out and look at acquisitions again.
“City Pubs has opened up new areas, giving us scope to start filling in those areas with more acquisitions.”
Young’s invested £8m in its core estate last year as well as investing in training and development, resulting in high internal succession and only “a handful” of general manager vacancies out of more than 280 pubs.
Launching a new premium drinks range, with new beers from Beavertown and Jubel, have further bolstered sales. Top sellers remain premium, such as Guinness, Estrella, and Peroni, while cocktails and rose wine continue to grow, despite several of the wettest months on record, Dodd adds.
“The high ticket prices are all selling, and we’re always looking to push forward in premium.
“We look at every aspect of the business to invest in our pubs so they’re as good as can be.”
London is leading the way in growth, he explains, with strong evidence of the return to the office. Fridays, despite a sharp drop post-pandemic, have gone back to being the second biggest day of the week.
“Monday is still a softer day, but London is really strong six days of the week. We’re definitely seeing central London bounce back, and also great growth in the West Country, where we have a number of rooms.”
Whereas business customers were more common pre-pandemic, the accommodation business is now thriving due to leisure customers, with the staycation trend “definitely here to stay.”
The strategy to “dramatically grow” the numbers of rooms, both organically and through acquisitions such as that of City Pub Group last year, has made Young’s a major player in the room market. The current total stands at 1,066 rooms, with room revenue up 7.7% in the year to April 2024.
“They’re a real growth engine for us, but we won’t chase them. We’ll grow in the right way,” Dodd adds.
“We had a record day one Saturday in May due to good weather, and we’ve never had a record day outside of Christmas. When the sun comes out, the consumer comes out.”
