Mitchells and Butlers celebrates strong sales but wage pressure grows

Harvester and Toby Carvery owner Mitchells and Butlers (M&B) has celebrated “strong” sales in recent weeks – but expects the upcoming increase in the national living wage to weigh on the hospitality firm’s costs.

It came as the company said sales have remained strong throughout the start of the new financial year.

The hospitality chain flagged “uncertainties” in the economic backdrop but said, based on its 7.2% like-for-like sales growth in the past eight weeks of 2024, it anticipates that the sales outcome for 2024 will be towards the higher end of its current financial expectations.

The chain had strong sales during the festive period, resulting in total sales growth of 9.7%, while like-for-like sales also grew over five key festive days.

M&B also said overall cost pressures are now easing, apart from a 9.8% increase in the national living wage for workers aged 23 and over from April this year.

Phil Urban, the chief executive of Mitchells and Butlers, said: “We are delighted by the strong trading performance over the festive season, with very strong performances across our brands portfolio thanks to the hard work of our teams.

“Growth was particularly strong on key dates, with record sales for Christmas Day based on 229,000 meals served, supported by strong trading in the run-up to Christmas, with the return of work parties and festive gatherings driving sales.

“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 and enviable estate locations, we are well positioned to continue to grow profitability and market share in the year ahead.”

The company, founded in 1898, reported a decline in profits in November 2023 due to unprecedented cost increases.

It said it was driven by weaker property valuations and increased costs, which also included higher wage bills.