Belfast Telegraph

Mitchells & Butlers sales slow amid more ‘challenging’ trading

Mitchells & Butlers said like-for-like drink sales fell 1.2% in the eight weeks to September 16 in a reversal of the surge in the previous 10 weeks.

The owner of All Bar One and Harvester has revealed a hit to drinks sales as the recent chillier weather has put off pub-goers.

Mitchells & Butlers said like-for-like drink sales fell 1.2% in the eight weeks to September 16 in a sharp reversal of the 3.8% surge seen in the previous 10 weeks.

The group blamed the poor weather in August and so far in September, although it said it outperformed the market.

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Drinking alcohol

Total sales edged 0.3% higher in the most recent eight weeks after more food sales, which rose 1.5% in an improvement on the 1.3% increase seen at the height of summer.

Mitchells said: “Following a strong sales performance in early summer, the market has been more challenging in recent weeks, particularly given poor weather this year up against a sunny period last year which has specifically impacted drink sales.”

The group said like-for-like sales in the 51 weeks so far of its financial year are up 1.8%, with drink up 2.1% and food 1.4% ahead.

But it reiterated that soaring costs will weigh on profit margins for the full year.

The industry has been under pressure from rising costs on a number of fronts, including the national living wage, property costs and the weak pound.

Mitchells chief executive Phil Urban said: “Whilst the weather in August and September has adversely affected the market we remain encouraged that our like-for-like sales performance continues to outperform the market.”

“We continue to work hard to mitigate the cost headwinds faced by the industry,” he added.

Mitchells – which also owns Toby Carvery, O’Neill’s and Ember Inns – is in the process of overhauling its pub estate, targeting more upmarket brands.

The group has launched Sizzling Pizza & Carvery and Sizzling Pub & Grill in an attempt to fight back against new competition in the eating out sector.

Analysts at Goodbody said Mitchells had reported a “solid” trading update, adding the underlying sales growth is “further evidence that management’s estate refurbishment plan is steering the group in the right direction”.

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