Pub and restaurant group Mitchells & Butlers has reported “strong trading” over the festive season, but warns that the hospitality industry is still facing a “challenging” trading environment as inflationary costs continue to put pressure on operators.
In its recent update for the first quarter of its current financial year, the group said it saw like-for-like sales growth of 10.4%, with total sales growth of 13.3%.
Like-for-like food sales grew by 6.4% during this period, with drink sales rising by 15.5%.
The company said it “made a strong start to the year with like-for-like sales growth of 6.5% over the first ten weeks of the quarter, primarily driven by drink sales growth”.
Growth has significantly increased in the last five weeks, mainly due to last year being impacted by the emergence of the Omicron variant, which resulted in a downturn in activity across much of the festive season.
Compared to the same period in the 2019 financial year, the last full financial year before Covid-19, like-for like sales were up by 8.9% over the first 15 weeks to 12 January 2019, with 9.2% growth in the first ten weeks, followed by 8.5% growth in the last five weeks, despite key recent weeks being negatively impacted by industrial action.
In the year to date, the company completed 43 conversions and remodels, and opened one new site – a second All Bar One at Edinburgh Airport.
Phil Urban, chief executive of Mitchells & Butlers, said: “We are encouraged by a strong performance through the first quarter and delighted to have been able to welcome our guests back over the festive trading season after three years of disruption due to Covid-19, setting sales records as we did so.
“However, we are mindful that the trading environment for the hospitality sector remains very challenging with inflationary costs putting sustained pressure both on the industry’s margins and disposable income of our guests.
“We remain focused on our Ignite programme of initiatives and our successful capital investment programme, driving cost efficiencies and increased sales. Combined with our diverse portfolio of established brands, value proposition and enviable estate locations, we believe we are well positioned to meet the challenges of the year ahead.”
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