Mixed results for Mitchells & Butlers amid living wage concerns

29 July 2015 by Hannah Thompson

Restaurant and bar group Mitchells & Butlers has posted overall sales growth in its third quarter trading update, but admitted that the recently announced National Living Wage would greatly impact its cost base.

The company saw third quarter growth of 5%, putting the total growth for the first 43 weeks of the year to 25 July at 8.2%.

However, while like-for-like sales also grew, by 1.3% in total for the 43 weeks so far, results were much better for food sales (up 2.5% in total) than for drinks, which have actually dropped by 0.1% across the year so far. Chief executive Alastair Darby called the current market climate "subdued".

The company stated: "We are assessing a wide range of options to mitigate the impact whilst continuing to focus on retaining and attracting the best people to work in our pubs, bars and restaurants."

Overall the firm has opened 11 new sites in the year to date, and converted 43 establishments, including 32 from Orchid sites into M&B brands such as Toby Carvery, Harvester, and Ember Inns, having acquired 173 site from the Orchid Group on 15 June 2014.

Alistair Darby, chief executive, commented on the results: "This year we have continued to successfully grow our food volumes and our like-for-like sales ahead of a subdued market, in addition to integrating and converting the Orchid business as planned. These initial conversions are trading well and in line with our expectations."

M&B's other brands include All Bar One, Browns, O'Neills and Sizzling Pubs.

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