All Bar One-owner Mitchells & Butlers upbeat despite Omicron blow

All Bar One and Toby Carvery owner Mitchells & Butlers tried to strike a positive note today despite a slump in business over Christmas.

M&B, which runs around 1,700 bars and restaurants across the country, said the introduction of measures to curb the spread of Omicron led to a 10% slump in sales over the last four weeks.

That derailed what looked like a decent recovery at the start of the quarter. The Christmas and New Year slump meant total sales in the 15 weeks to 8 January were 1.5% than a year earlier.

CEO Phil Urban put a positive spin on things, saying sales of pints and Yorkshire puds are likely to quickly bounce back as restrictions are rolled back and Britain learns to live with Covid.

“Experience shows that as restrictions ease, and confidence returns, our business is able to swiftly recover,” he said. “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.”

Omicron isn’t the only issue facing the company: M&B which also owns the Harvester chain, said it is facing a surging costs due to higher wages and energy costs. The hospitality firm expects costs to rise by between £60 million and £65 million compared to pre-pandemic levels due to the inflation pressures.

Shares improved 2.8p, or 1%, to reach 260.4p.

Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, said: “The group’s been forced to stutter, start and stop multiple times, but trading when it’s going is going well.

“Longer-term, the challenge remains about how best to tackle fierce competition in the mid-market dining and drinking space, but that’s a question that can be left until the nearer-term hurdles have been cleared.”