Endeavour Group is preparing for a massive festive season at its 344 pubs, despite rising inflation, with Christmas bookings already double what they were this time last year.
The drinks giant has released its results for the first quarter of FY23, which were $3,028 million, 3.1% higher than in FY22. Leading the results were hotels sales, which were up 90.8% on the prior year – at $538 million – with strong trading across all key categories of bars, food, gaming and accommodation.
Endeavour Group CEO Steve Donohue said the next few months were looking to be even more buoyant. The company’s pubs have capacity of 44,000 bookings for Christmas, with 30% of those spots already filled.
“As we head towards the end of 2022, we’re prepared for a big Christmas season. It will be the first, restriction-free festive season in three years,” Donohue said.
“Our hotels are thriving, as Australians embrace both large and small social occasions after years of COVID-19 disruption. Live entertainment is also becoming a feature of our business again, with music fans enjoying a range of sold out gigs across our hotels.”
Donohue said there had been a 10% rise in the size of bookings, with larger numbers of people included in group bookings. Patrons were coming in at different times and staying longer.
“We are also seeing people wanting to enjoy the hotel over more hours of the day,” he said.
The rebound in bars and food sales has been particularly strong, with food becoming the fastest growing category in recent months compared to FY20.
Inflation not impacting spending
Donohue said there was no sign of any downturn in spending by consumers at the hotels or liquor stores in the head-up to Christmas, despite six successive rate rises by the Reserve Bank of Australia.
However, the company was keeping a keen eye on pricing.
“With all consumers feeling the impact of inflation, we remain focused on ensuring we are a destination of choice for locals seeking a welcoming and affordable place to socialise with family and friends,” Donohue said.
Investment in the hotels network continued in the quarter, with 14 renewals completed and three hotels acquired, The Leichhardt Hotel in Cloncurry (Queensland), The Emu Hotel in Morphett Vale (South Australia) and The Tandara Hotel in Sarina (Queensland).
“This brings our total hotels to 347 – including five managed clubs in Victoria – at the end of the quarter,” Donohue said.
Retail sales ease
However, retail sales were 6.2% lower at $2.49 billion, due to the company cycling lockdown periods this time a year ago when online sales boomed.
Overall, Endeavour Group’s sales for the first quarter increased 3.1% to $3.02 billion compared with a year ago.
“Our year-on-year comparison shows a predictable decline as we cycle the unique spikes in demand created by COVID-19 restrictions that particularly affected key population centres of NSW and Victoria this time last year,” Donohue said.
“This cycling impact is easing as we head into the second quarter.”
Donohue said the premiumisation trend was still strong despite cost-of-living pressures, with people “drinking better” or shifting to low alcohol or no-alcohol versions of beer or wine.