Greene King warns of challenge to pubs from slowdown

Market conditions remain challenging as the credit crunch rolls over into consumer spending, brewer and pubs chain Greene King warned shareholders at today's annual meeting.

The maker of Greene King IPA admitted that punters were constantly looking for value deals.

It has recently shoved an extra £1 million in the direction of those tenanted pubs that depend more on drink than food sales. That has ensured that they can sell McEwan's lager at £1.95 a pint, Ruddles bitter at £2.25 and a bottle of Pinot Grigio or Merlot for as little as £5.95.

Elsewhere, its Hungry Horse branded pubs with their emphasis on value-for-money meals and family-friendly atmosphere is clearly outperforming the rest of the market.

The dreadful summer weather has also hit pubs but cannot be blamed for any extra decline in sales since it has been no worse than last year's wash-out.

Greene King said like-for-like sales in its own pubs were down 1.6% in the first 16 weeks of its financial year, slightly better than the 2.8% fall seen in the first eight weeks. But tenanted pubs have fared much worse in the past two months and are down 1.7% in the 16 weeks.

Brewing volumes were down 3%, which chief executive Rooney Anand said was a strong performance.

He added: "Despite the current trading challenges and lacklustre outlook for the UK economy, the board anticipates meeting its expectations for the year."