Mitchells & Butlers: trading environment remains 'very challenging'

Mitchells & Butlers – which operates brands including Harvester, Toby Carvery, All Bar One, and Miller & Carter – has said it is focusing on sales and efficiency against a challenging backdrop of rising costs.

In a third quarter trading update covering the 42 weeks ended 16 July 2022, the group said like-for-like sales started strongly during the quarter, up 2.2% for the first five weeks against 2019 levels.

However, this then fell back slightly over the Jubilee weekend and was impacted by industrial action and the recent very hot weather, to end at 0.9% across the full quarter, with food continuing to be the main driver.

Total sales declined by 1.6% in the year-to-date driven mainly by temporary Covid-related closures in the first part of the year and site disposals since 2019.

“Inflationary cost pressures continue to present a major challenge to our business and to the hospitality sector as a whole,” said the update.

“Whilst the near-term outlook is unchanged it now seems likely that, particularly in the case of utilities, wages and food costs, these will persist at or above current levels well into the next financial year, increasing and prolonging the medium term impact on margins."

Despite challenging conditions, the group said it remained committed to investing in its estate and had completed 116 conversions and remodels in the financial year to date.

Phil Urban, chief executive, said: “In the face of these challenges, we remain focused on driving sales and efficiency through our Ignite programme and pushing forward with our capital investment plan which we are pleased to see delivering strong sales uplifts.”