Mitchells & Butlers posts 2.1% sales growth for the year

Mitchells & Butlers, the UK's largest pub and restaurant operator, posted like-for-like sales growth of 2.1% for the 51 weeks to 19 September, helped by a fourth-quarter recovery from summer weather disruption.

Fourth-quarter like-for-like sales rose 1.4% as the weather settled, with the August Bank Holiday weekend standing out at 5.3% growth. Drink sales grew faster than food across the year, up 2.7% against 1.8%, a split that tends to favour margin over volume.

Chief executive Phil Urban said the return to growth “reflected the resilience of demand” and that trading had run ahead of the wider market. The group, which owns brands including Harvester, Toby Carvery and All Bar One, completed 222 conversions and refurbishments over the year and acquired 11 new sites, nine of them UK freeholds and two leaseholds in Germany.

The return to growth in the fourth quarter reflected the resilience of demand.

Cost headwinds start to ease

The numbers sit against a backdrop of rising foodservice costs across the UK, where meat prices in particular have kept pushing input bills higher through the year. Mitchells & Butlers put its own cost headwinds at £120m for the current financial year, a figure it expects to fall to around £95m in 2027, roughly 4% of its cost base.

Management said underlying operating profit should come in broadly flat at around £329m, in line with market expectations, with further growth pinned on easing costs plus the group's Ignite efficiency programme and its capital investment plans. Shares in the group rose 1.1% on the update.

A pub estate still adding sites

The freehold and leasehold purchases point to a chain still expanding rather than retrenching, even as smaller independent operators keep closing under the same cost pressure. Eleven new sites in a single year is a modest number next to Mitchells & Butlers' estate of more than 1,700 pubs and restaurants, but it is a clear signal of intent from a company that spent much of the past two years managing costs rather than growing.

The company's full-year results are due later in the autumn, the next test of whether Mitchells & Butlers sales growth holds through winter.