Pub group Fuller’s expects its energy costs to more than double

UK pub group Fuller, Smith & Turner has said its gas and electricity bill will more than double without government support, as businesses await details of help with soaring energy prices expected in a mini-Budget this Friday.

The pub chain said on Tuesday it expected its energy costs for the current year for its 385 sites to total about £18mn, compared with last year’s bill of about £8mn.

Fuller’s has now signed forward purchase contracts with energy suppliers to cover all of its gas and electricity requirements until March next year.

Chief executive Simon Emeny said hospitality businesses faced “unsustainable increases in energy costs”, which have risen from about 2 per cent of total costs to 8 per cent, he added.

He urged the government “to provide much-needed clarity on its proposed support package so that we can plan accordingly”.

A group of hospitality industry bodies, including UKHospitality and the British Beer and Pub Association, wrote to chancellor Kwasi Kwarteng last week pushing for a cut in value added tax on food and drink sales, and a temporary cancellation of business rates for the sector.

Fuller’s said it had brought forward energy-saving initiatives, including moving from gas to electric hobs, installing energy-efficient boilers and using heat recovery systems to convert the heat generated from refrigeration into hot water.

Emeny said the bank holiday weekend for the Queen’s state funeral had brought “busier than normal” trading across Fuller pubs, which are concentrated in London and south-east England.

“A lot of people wanted to go out and commemorate the occasion by having a drink in a pub so suburban pubs did very well, particularly in the latter part of [Monday],” said Emeny. He added that Fuller’s Westminster pubs did “incredibly well” after the funeral service finished.

Sales in the 25 weeks to September 17 were up 3 per cent against pre-pandemic levels, the company said. On a like-for-like basis, sales were up 21 per cent on last year.

But pub groups are worried about how inflation and a possible downturn will affect the sector. “While sales continue to recover from the effects of the pandemic, we are conscious that consumers face increasingly challenging times ahead,” Emeny said.

But he added that the chain was “looking forward” to trading during the World Cup in November and December and the “first restriction-free Christmas for three years”. Fuller’s share price was up 0.8 per cent to 512p in morning trading in London.