Mitchells & Butlers | UK

Food sales up, drinks down

Harvester is one of the many brands within the M&B portfolio. A road signboard outside a Harvester restaurant informed people of their participation in the government discount scheme in summer 2020.
IMAGO / Zuma Wire
Harvester is one of the many brands within the M&B portfolio. A road signboard outside a Harvester restaurant informed people of their participation in the government discount scheme in summer 2020.

Mitchells & Butlers (M&B) has reported a 2.7% increase in like-for-like sales for the two months since the end of its financial year to 25 September 2021, against the same period in 2019. The British operator said this comprised an increase in like-for-like food sales of 9.5% and a decrease of like-for-like drink sales of 4.8%. Since restrictions were lifted, the company returned to profitability and cash generation, it said.

According to the company’s announcement volumes remained in decline of between 10% to 15% during the eight weeks, with sales being driven by increases in spend per head and reduced VAT on food and non-alcoholic drinks. Total sales in this period went up 0.5%. Across the full year like-for-like sales declined by 9.6% with food sales up by 2.5%, supported by reduced levels of VAT, and drink sales down by 21.6%.
 
Against financial year 2019 drinks volumes were 28.5% lower. The operator of The Harvester and All Bar One explains the decline with the restrictions on solus drinking and the slower recovery of wet-led brands particularly in larger city centres and outside of the higher energy younger pub and bar market. Food volumes, across the year, were in decline of 25.1% with the increase in average spend per head reflecting the increasingly strong performance of premium offers.
 
Total revenue for the year stood at £1.065bn (FY 2020 £1.475bn), with operating profit of £81m (FY 2020 £8m), and a loss before tax of £42m (FY 2020 loss of £123m). The company said that since trading resumed without restrictions on 19 July, it had seen an encouraging return to like-for-like sales growth, helped by the lower rate of VAT on food and non-alcoholic drink sales.
 
Phil Urban, Chief Executive, commented: "Despite the inevitable challenges faced by our business over the past year we are now well positioned to regain the momentum previously built as we come out of the pandemic. The trading environment remains challenging and cost headwinds continue to put pressure on the sector.”
 
“However, we have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme which will deliver sales and efficiency improvements to help combat these challenges. Demand for our well-loved brands has been demonstrated by an encouraging return to sustained like-for-like sales growth since restrictions have been lifted, and we are confident in our ability to continue our recovery as a market leading operator."
About Mitchells & Butlers
Mitchells & Butlers is a leading operator of managed restaurants and pubs. Its portfolio of brands and formats includes 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. In addition, it operates Innkeeper's Collection hotels in the UK and Alex restaurants and bars in Germany.
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