Endeavour Group, which owns Dan Murphy’s, BWS and 344 pubs, says pub and hotels sales are up strongly led by food sales at the bar

Business is booming at Endeavour Group’s pubs and hotel operations as Aussies enjoy post pandemic life.

Australians are enjoying spending more time at their local pub, extending their stay by hours as the lockdowns of the pandemic become a distant memory, and when they do take a stool at the bar they are spending more money on food and bar snacks.

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.

And already bookings for Christmas lunches and dinners at its pubs are 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 around 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 when they visit, with the outlook for pubs not expected to be tainted by global economic and geopolitical worries.

“What we are experiencing in the way customers are enjoying the pub is actually to the contrary, on average with larger groups coming together, so think about an increase in the size of a booking,” he said.

“And we are also seeing people wanting to enjoy the hotel over more hours of the day,” Mr Donohue said as Endeavour reported total sales up 3.1 per cent to $3.028bn for the first quarter and in line with market expectations.

Aussies are living large at Endeavour Group’s pubs following the pandemic.

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 as that business cycled the lockdowns of last year.

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 licenced 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 pre-Covid levels. Retail (bottle shops) decline as expected due to channel shift to out of home consumption.”

Shares in Endeavour rose strongly on a day when the broader market was significantly weaker, with the stock ending the day up 1.5 per cent at $6.97.

Mr Donohue said the business was continuing to see a return to more normal trading patterns following 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.”

Turning to upcoming Christmas trading, Mr Donohue said he was optimistic about the company’s outlook for that key trading period.

“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. Function bookings are already strong in our hotels, and we have a good supply of a great range of products to meet all tastes, trends and price points in our retail offers over the holiday season.”

Over the first quarter, Endeavour’s hotel arm had strong trading across all key categories of bars, food, gaming and accommodation with the food category particularly strong.

“The rebound in bars and food sales has been particularly strong, with food becoming the fastest growing category in recent months compared to fiscal 2020. 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.”

At its retail arm – which includes 258 Dan Murphy’s and 1,417 BWS stores – excluding the states of Victoria and NSW, which were in lockdown last year, sales grew compared to last year.

“Compared to pre Covid-19, our trading has been strong. Sales are 13.9 per cent higher compared to the first quarter of 2020, which represents a three-year CAGR of 4.4 per cent. Our ongoing focus on customer offers and service, improving and expanding our network, and trend leadership in our merchandising all contributed to this growth.”

Global supply chains were also in a much stronger position with earlier shortages of Scotch whisky and American bourbon now switching to normal supply volumes and its stores Dan Murphy’s and BWS stocking up for Christmas to be ready for demand.

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

Originally published as Endeavour Group, which owns Dan Murphy’s, BWS and 344 pubs, says pub and hotels sales are up strongly led by food sales at the bar