Adnams: Cellar & Kitchen stores to expand

Suffolk brewer Adnams plans to open another five or six Cellar & Kitchen stores in the next two or three years as its re-confirms its long-term aim of operating 30 shops.

Adnams currently operates 10 stores and expansion of the stores has been on hold since the recession hit in 2008. But chairman Jonathan Adnams said: "We now think it's the right time to go out and find some good sites.

"We think we probably we can build up to 30 over a longer period of time, but if in two to three years we get 15 or 16 shops, that would be the objective."

It comes as the company reported a strong second half as it clawed back operating profit to finish the year broadly flat on last year.

Operating profit for the 12 months to 31 December was £3.188m — slightly down on 2009's £3.238m — but represented a good performance as operating profit had been 10% down on 2009 at the half-year.

Beer re-balance​

Jonathan Adnams said he wanted to "re-balance" the beer business away from its heavy reliance on national tenanted pub operators, with managed pub companies and the freetrade the target.

The company attributed an 8% decline in own beer volumes on the "torrid time" experienced by large tenanted pub companies, which stock its brands, although this was offset by improved business with managed pub companies.

"We could say that we were perhaps over-weighted with the two big tenanted operators," said Adnams. "We did well as they grew but as they started to have their troubles it became harder for ourselves.

"We haven't focused very much on managed pubs in the past, so as we started to find it more difficult in tenanted pub estates, one looks to new market places and the managed chains are an obvious area."

Expansion​

When asked if the company was eyeing expansion of the pub estate, such as by picking up pubco disposals, Adnams said: "We are always looking for great sites. There's nothing in the pipeline and the moment."

However, there may be more churn in the 70-strong pub estate. "We sold three in under a year and may well have one or two more to go out," Adnams said.

The company said that 2010 was "not an easy year" for its pubs business, with its high proportion of rural pubs that are "particularly vulnerable to the poor weather that plagued each end of the year".

Adnams declined to reveal the amount of financial support being offered to tenants but said: "We have, and still are, putting in support where it's needed. We have a very close relationship with our tenants and we support them in a number of ways."