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Fever-Tree UK sales lose fizz due to consumer spending slowdown | Business News



Fever-Tree has cut its full-year revenue forecasts, blaming the consumer spending slowdown in the UK.

The premium mixer drinks specialist, which had previously warned that an exceptionally strong summer in 2018 would be tough to repeat this year, said it continued to see growth across the business.

But it reported in a trading statement that “short-term headwinds” for consumer sales in the UK, its most established market, would mean that annual revenues would fall short of analysts’ expectations of £275m.

It forecast revenue of between £266m-£268m.

Taken together with trade sales – such as pubs, bars and restaurants – Fever-Tree said it expected growth of around 2% in the country for 2019.

But it said of store sales: “In the UK Off-Trade, our performance has been behind our expectations in the second half as we continued to lap very tough comparators in July and August and more recently seen a slowdown in consumer spending, as reflected in the wider retail data.”

Sales spiked in the summer of 2018 as the brand received a boost from a string of events, including the Royal Wedding and good weather.

Fever-Tree said the UK store sales slowdown was being partially offset by better than expected growth elsewhere, especially in the United States where it had also signed a bottling plant agreement that would kick in next year.

Sales of Fever-Tree products in the UK grew by 118% in 2016
Fever-Tree has a market value above two billion pounds

The company’s shares have been among the big stock market success stories since its flotation in 2014, at 134p-per-share.

But they have endured a tougher 2019 – down 15% to date ahead of Wednesday’s opening.

The shares began the day a further 7% lower at just above £17 per share but later surged to be 7% up on Tuesday’s close as investors focused on growth outside the UK.

Chief executive Tim Warrillow said of the trading environment: “We continue to see growth across all four regions.

“Indeed, sales accelerated in our key growth markets of the US and Europe.

“Fever-Tree’s progress in the US is particularly encouraging and the signing of a US bottling partner is a further step in building our operations in this exciting market.

“Despite challenging comparators, our performance in the UK On-Trade underlines the strength of the brand and while the mixer category in the Off-Trade is moderating alongside the recent slowdown seen across the wider grocery channel, we continue to maintain our clear UK market leadership position.”

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