HSBC has released a market report that says the pub sector has ‘defied concerns’ with trading strengthening as well as an improving cost outlook.
It found that recent trading has shown growth in like-for-like sales, and although driven by price, volumes are also showing recovery and that this trend is broad-based.
The cost outlook could also improve over the coming months with expected utility price reductions over the next year and existing investment in energy savings helping the cost base. Along with stablising food price inflation, it also says that although wages remain uncertain, they are not anticipating the same level of increases seen this year.
As a result HSBC upgraded its rating on Wetherspoons and Mitchells and Butlers from ‘hold’ to ‘buy’.
