Mitchells & Butlers

Omicron drags down sales

Omicron hits Mitchells & Butlers during the festive season.
Mitchells & Butlers
Omicron hits Mitchells & Butlers during the festive season.

Today, Mitchells & Butlers has published a trading statement covering the 15 weeks ended 8 January 2022. According to the statement, like-for-like sales in the 15 weeks ended 8 January 2022 declined by 1.5%, with total sales down 5.2%, as the business was adversely impacted by covid related site closures.

In the seven weeks to 8 January, like-for-like sales were down 6%, with food sales up 0.5% against a 13.8% decline in drink sales. For the 15 weeks to 8 January, food sales were up 5.2% versus a 9.1% decline in drink sales. Sales comparisons are on a three-year basis, to the same period in FY2019, being the last full pre Covid-19 financial year. Current year figures include the benefit of the temporary reduction in the rate of VAT on food and non-alcoholic drink sales.
 
The company stated: “We made a strong start to the year with like-for-like sales growth of 2.7% over the first eight weeks. This encouraging performance continued until early December when concerns first arose around the emergence of the new Covid variant, Omicron, leading to calls for further caution in socialising which resulted in a downturn in activity across the sector. As a result, over the seven weeks since the last update like-for-like sales have been down 6.0%, with the adverse impact of Omicron being particularly felt in the most recent four weeks, over the important festive season, during which like-for-like sales have been down 10.2%.
 

Stronger performance in the premium market

As the trading environment remains uncertain, Mitchells & Butlers see the benefit of the group in their wide range of brands, offers and locations. According to M & B, Sales have remained stronger in suburban and food-led brands, particularly at the more premium end of the market.
 
Regarding Costs, the company stated: “As previously announced, in the current year inflationary cost headwinds are expected 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.”
 
Phil Urban, Chief Executive, commented: "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."
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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