Allied Domecq profits warning rocks market

THERE WAS fresh evidence of a downturn in consumer spending yesterday when Allied Domecq, the spirits and pubs group, issued a profits warning due to a poor performance in its pubs division.

The group, whose interests span Beefeater gin, Baskin Robbins ice cream and the Big Steak pub chain, cited "eroding consumer confidence", which it said had intensified since last summer. It said the downturn was particular marked over the Christmas period with drinks sales falling, although food sales had held up.

The warning knocked 14 per cent per cent from Allied's share price, prompting a raft of profit downgrades from brokers and depressing share prices elsewhere in the pubs and brewing sector. Shares in Bass and Scottish & Newcastle fell sharply, while Whitbread closed lower ahead of a trading update today.

"What we are seeing is some of the dark side of the change of pubs into places to have a meal," said John Wakeley, analyst at Lehman Brothers. "Restaurants are much more cyclically sensitive... and clearly a large part of the UK is suffering in terms of consumer confidence."

There was more bad news elsewhere in the sector, where the Old English Pub company announced that it had become a corporate victim of the flu outbreak sweeping Britain. The group, which operates "rustic" inns with accommodation, partly blamed the outbreak for a 2.9 per cent fall in like- for-like sales over Christmas. "We were hit by the epidemic, which resulted in several cancellations over Christmas and New Year," the company said. Trading was also affected by a move away from alcoholic beverages towards soft drinks, it said. Corporate bookings were down over the extended holiday period.

The Allied warning rocked a sector which had appeared to be recovering after upbeat statements last week from pub groups JD Wetherspoon and Yates Brothers Wine Lodges.

Allied's pubs operate under brand names such as Firkin, Scruffy Murphy's, Mr Q's and Big Steak. The group said food sales had held up well in pubs such as the Big Steak outlets, but drinks sales had weakened and customer numbers fallen. The company said: "Early evidence shows that our performance has mirrored the market trend in the pre-Christmas months. Sales were lower over the Christmas period, and first-half pub profits will therefore be lower as a result."

There was better news in spirits, where Allied said there had been some growth in major markets in the first four months of its financial year. In Europe, Ballantines scotch whisky volumes grew strongly and Beefeater gin did well. Trading in Mexico has been difficult due to duty rises, illegal bottling and tough economic conditions.

The group defended its decision to sell Cantrell & Cochrane, its Irish cider and soft drinks business, which was sold to BC Partners Venture Capital for pounds 519m.

Allied, whose talks with Seagram of Canada to create a wine and spirits alliance foundered last year, further hinted that talks between the two - and others in the industry - could be revived.

"There is little doubt in our minds that a combination with another group, with the right management team, would undoubtedly result in substantial synergies," said Sir Christopher Hogg, the chairman.

Suggested Topics
Sport
world cup 2014A history of the third-place play-offs
News
Tommy Ramone performing at The Old Waldorf Nightclub in 1978 in San Francisco, California.
peopleDrummer Tommy was last surviving member of seminal band
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
The Mexico chief finally lets rip as his emotions get the better of him
world cup 2014
PROMOTED VIDEO
Voices
Spectators photograph the Tour de France riders as they make their way through the Yorkshire countryside
voicesHoward Jacobson: Line the streets for a cycling race? You might just as well watch a swarm of wasps
Life and Style
lifeHere's one answer to an inquisitive Reddit user's question
Life and Style
Several male celebrities have confessed to being on a diet, including, from left to right, Hugh Grant, Benedict Cumberbatch and Ryan Reynolds
...and the weight loss industry is rubbing its hands in glee
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Sport
Yaya Touré has defended his posturing over his future at Manchester City
News
Detail of the dress made entirely of loom bands
news
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
beauty
Sport
There were mass celebrations across Argentina as the country's national team reached their first World Cup final for 24 years
transfersOne of the men to suffer cardiac arrest was 16 years old
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice