All Bar One and Toby Carvery owner Mitchells & Butlers (M&B) has said the spread of the Omicron variant of Covid-19 and caution over socialising caused drinker numbers to drop sharply in the run up to Christmas.
Phil Urban, boss of the pub and bar group, said the business saw reduced customer activity and “disruption caused by the inevitable isolation of team members” due to soaring virus cases last month.
The company told shareholders it had seen an “encouraging” performance for most of the latest quarter, but lost its strong momentum due to concerns over the rapid spread of the virus.
Like-for-like sales dropped by 1.5% for the 15 weeks to January 8 against the same period in 2019, as positive food growth largely offset a reduction in drink sales.
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 buildPhil Urban, Mitchells & Butlers CEO
However, the company said this was buoyed by growth at the start of the period, with like-for-like sales over the last four weeks plunging by 10.2%.
It revealed a sharp drop in recent drink sales, which fell by 13.8% over the past seven weeks.
M&B, which also owns the Harvester chain, said it is also facing a surge in costs due to higher wages and soaring energy costs.
The hospitality firm said it expects to face between £60 million and £65 million higher costs than typical pre-pandemic levels due to the inflation pressures.
Mr Urban, chief executive of M&B, said: “This first quarter performance represents 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.”