Yates cuts prices to drive recovery

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The Independent Online

Yates Group, the troubled pub operator, yesterday unveiled an aggressive discounting strategy that will pit it against JD Wetherspoon in an attempt to drive sales growth.

Yates, which has struggled to reverse a dire 18-months, said promotional offers would attract customers during the traditionally quiet afternoon and early evening periods. It wants drinks suppliers to cover the costs and claimed its own margins would be unaffected.

The decision to promote cheap drinks accompanied an overhaul of the group's 126 Yates's Wine Lodge and 16 Ha! Ha! Bar & Canteen chains. The restructuring included selling 17 underperforming sites, axing about 50 jobs and reining back the expansion programme.

Mike Hennessy, who became executive chairman after the ousting of Peter Dickson in July, said the group would leave behind its "sheep town" heritage and aim for larger towns and cites like Edinburgh and Belfast. The remaining "passe" Wine Lodges, notable for their mock Victorian clutter, will be phased out and refitted according to a sleeker, more modern design such as Yates's Leicester Square site.

Yates shares rose 9.5p to 133.5p in what analysts termed a relief rally based on early signs that the group had turned around its fortunes. Mr Hennessy said like-for-like sales, which fell 2.6 per cent in the first half, became "significantly positive" last month.