​Mitchells & Butlers Outperforms Market as Inflation Eases

Mitchells & Butlers, the operator of well-known brands such as Harvester, Toby Carvery, and All Bar One, has reported a 5.2% increase in like-for-like sales over the past year. The company attributes this growth to gradually easing inflationary pressures, allowing for more stable sales performance across its food and drink offerings.

Rept0n1x, CC BY-SA 2.0, via Wikimedia Commons

In a pre-close trading update for the 51 weeks ending 21 September 2024, the company revealed total sales growth of 5.9%, underscoring its resilience in a fluctuating market. Despite an overall positive trend, sales growth slowed in the year's final quarter. The first quarter saw a promising 7.7% rise, but this momentum was tempered by a more modest 2.5% increase in the past three months. The company pointed to an unseasonably cool and wet summer and city centre disruptions caused by riots as factors behind the slowdown.

Mitchells & Butlers has remained committed to its investment strategy, completing 185 refurbishments and conversions and opening six new sites over the year. This investment, combined with a diverse portfolio of brands and well-positioned estate locations, has enabled the company to continue outperforming the market.

Chief executive Phil Urban highlighted the company's robust performance, noting that easing inflationary cost pressures has stabilised growth. "Sales growth has continued to normalise as inflationary cost pressures ease, while our diverse portfolio of established brands and advantaged estate locations underpin our outperformance against the market," Urban said. He also emphasised the company's focus on future growth, pointing to its Ignite programme and a full capital investment plan to drive increased sales, cost efficiencies, and profitability.

Ewan Munro from London, UK, CC BY-SA 2.0, via Wikimedia Commons Mitchells & Butlers expects further cost pressures to ease, particularly in labour costs, which the company believes will be mitigated by lower energy costs, slower food inflation, and ongoing cost controls. The business is also continuing its efforts to reduce energy usage, introducing sustainability initiatives such as solar panels and sensors across its sites.

While weather and city disruptions have tempered growth, Mitchells & Butlers remains optimistic about its ability to navigate the coming year with a clear strategy focused on maintaining market outperformance and enhancing profitability.