Covid restrictions knocked the wind out of Mitchells & Butlers’ sails during the festive season – but the pub group said today that data showing the variant is milder than first thought will boost consumer confidence.
The chain made a strong start to its fiscal year, which began at the end of September, with like-for-like sales growth of 2.7% in the first eight weeks.
This encouraging performance continued until early December when concerns first arose around the emergence of Omicron, leading to calls for further caution in socialising which resulted in a downturn in activity across the sector.
As a result, like-for-like sales over the past four weeks were down 10% versus the last pre-pandemic year in 2019.
M&B said it expected inflationary cost headwinds to be higher than the normal pre-Covid level of £60m to £65m, due particularly to high levels of statutory wage rate increases and persistent historic high prices in energy markets.
The group currently has cash balances on hand of £235m, with undrawn unsecured facilities of £150m.
Phil Urban, chief executive of M&B, said the first quarter performance represented a “robust performance” given the challenges the industry faces from the rapid spread of the new variant, both in terms of reduced consumer activity and disruption caused by the inevitable isolation of team members.
“Experience shows that as restrictions ease, and confidence returns, our business is able to swiftly recover. To that end, whilst we expect activity to continue to be adversely impacted in the short term, we are encouraged by the latest data on the Omicron variant which we believe will boost consumers’ confidence to return to pubs and restaurants allowing us to regain the momentum which was beginning to build, supported by the benefits from our new set of Ignite initiatives.”
Mitchells & Butlers operates brands such as Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse and Vintage Inns.