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Mitchells & Butlers, the owner of popular brands such as All Bar One and Toby Carvery, has reported continued sales growth as it works to rebuild its margins in a challenging economic environment. The Birmingham-based pub and dining chain, which operates over 1,000 sites across the UK, has seen a 3.4% increase in like-for-like sales over the past three months, contributing to a total sales increase of 7.3% for the year.
Drink sales have played a significant role in this growth, increasing by 4% during the company’s third quarter. The company noted that its sales growth has “remained ahead of the market,” with positive performance observed across all its brands.
Phil Urban, Chief Executive of Mitchells & Butlers, commented on the results:
“We are pleased with the continued strong trading performance, which has remained ahead of the market through the year. As inflationary pressures have eased, the level of price increases we have taken has reduced, leading to headline sales growth in line with more normalised levels as expected during the second half.”
He added that the combination of easing inflationary costs and continued sales growth would ultimately benefit the company’s profit levels for the year. Urban stated:
“Our focus remains on the effective execution of our Ignite programme of initiatives and our successful capital investment programme, driving cost efficiencies and increased sales. With the unique strengths of our business, including a diverse portfolio of established brands, value proposition, and enviable estate locations, we are well positioned to continue to grow profitability and market share into next year.”
Despite these positive results, Mitchells & Butlers is preparing for net cost pressures estimated at around £55 million in the current financial year. The company anticipates that the upcoming National Living Wage increase will be partially offset by lower food and energy costs.
In 2023, Mitchells & Butlers experienced an exceptional year, with total revenue rising to £2.5 billion from £2.2 billion in the previous year. However, the operating profit saw a reduction of £26 million, settling at £98 million. This highlights the ongoing challenges the company faces in balancing revenue growth with rising costs.
Mitchells & Butlers’ strategic initiatives, including its Ignite programme and capital investment, aim to drive continued growth and efficiency across its operations. As the company navigates the current economic landscape, its focus on leveraging its strong brand portfolio and optimizing costs remains key to maintaining its competitive edge.
