LONDON (ShareCast) - (Sharecast News) - Pub operator Mitchells & Butlers said on Thursday that it had initially made "a strong start to the year", with like-for-like sales growth of 2.7% over the first eight weeks, but warned that renewed Covid-19 restrictions on hospitality venues impacted trading during the all-important holiday trading period.
Concerns regarding the emergence of the Omicron variant in December had resulted in further caution in socialising which, in turn, brought about a downturn in activity across the sector and, as a result, like-for-like sales then dropped 6.0% over the seven weeks since its last update, with the adverse impact of the new variant being "particularly felt in the most recent four weeks" as like-for-like sales over the key festive season were down 10.2%.

The FTSE 250-listed firm stated that while the trading environment "remains uncertain", it was continuing to benefit from its "wide range of brands, offers, and locations", with sales remaining stronger in suburban and food-led brands, particularly at the "more premium end of the market".

Inflationary cost headwinds were expected to be higher in the current year than normal pre-Covid levels of £60.0-65.0m, principally due to high levels of statutory wage rate increases and persistent historic high prices in energy markets.

Chief executive Phil Urban 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."

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