High inflation presents ‘major challenge’, says Mitchells & Butlers

Restaurant and pub group Mitchells & Butlers has reported a 1.6% drop in sales in the financial year to date, and said that inflationary pressures are presenting “a major challenge to our business and to the hospitality sector as a whole”.

Compared with pre-pandemic figures, drink sales decreased by 4.9% in the year to date while food sales were up 5.5%.

In recent weeks sales have been impacted by the Jubilee weekend, industrial action and the hot weather, which led to people going out less.

Costs for utilities, wages and food are likely to remain at or above the current high levels well into the next financial year, increasing and prolonging the medium-term impact on margins.

“The trading environment remains very challenging with inflationary costs squeezing consumer discretionary spending and putting pressure on the industry’s margins,” said Phil Urban, chief executive of Mitchells & Butlers.

The company is still investing in its sites, however, with 116 conversions and remodels completed in the year to date.

Mitchells & Butlers’ brands include Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s and Ember Inns. It also operates Innkeeper’s Collection hotels in the UK and Alex restaurants and bars in Germany.