(Reuters) - Greene King (GNK.L) became the latest British pub operator to flag weakness in consumer spending and higher costs of serving food and drinks, as it reported an 8 percent drop in first-half profit.
The company, which also brews beers such as Greene King IPA and Old Speckled Hen, blamed bleak weather in August and September and increased competitor discounting for weakness at its pub company unit, which runs brands such as Hungry Horse, Chef & Brewer, Farmhouse Inns and Flaming Grill.
The company said like-for-like sales at the business fell 1.4 percent, adding that it expects to dispose of 50 to 60 pubs in the unit.
Like its peers, Green King pointed to a broad-based weakness in consumer confidence as incomes get squeezed by rising inflation and higher interest rates.
“It was a challenging first half of the year with the UK consumer spending more cautiously and unprecedented cost pressures impacting on the pub sector,” the company said in a statement.
Rival Mitchells and Butlers (MAB.L) last week reported a drop in profit and cut its interim dividend.
Green King said it expects full-year costs to increase by 60 million pounds, hit by an higher wages and a weaker pound.
Adjusted pretax profit for the 24 weeks to Oct. 15, fell to 127.9 million pounds from 139 million pounds a year ago.
Reporting by Hanna Paul in Bengaluru; Editing by Saumyadeb Chakrabarty