Omicron threat hits pub group’s sales over key festive season
Sales at pubco Mitchells & Butlers were hit over the key festive period as pub-goers opted to stay at home amid concerns over the Omicron variant.
The company, which owns Toby Cavery and All Bar One, said like-for-like sales for the 15 weeks to 8 January were down by 1.5% while food sales were up 5.2% in the period and drink sales were down by 9.1%.
In the eight weeks to 20 November, like-for-like sales were up 2.7% and in the seven weeks to January 8, sales were down by 6.0%, as concerns first arose in December around the emergence of the new Covid variant Omicron, leading to calls for further caution in socialising.
“As a result, over the seven weeks since the last update like-for-like sales have been down 6.0%, with the adverse impact of Omicron being particularly felt in the most recent four weeks, over the important festive season, during which like-for-like sales have been down 10.2%, the company said.
M&B said the trading environment remains uncertain, but it continues to benefit from its wide range of brands, offers and locations.
Sales have remained stronger in suburban and food-led brands, particularly at the more premium end of the market.
The group said inflationary cost headwinds are expected to be higher than the normal pre-Covid level of £60m to £65m, due particularly to high levels of statutory wage rate increases and high prices in energy markets.
M&B has cash balances on hand of £235m, with undrawn unsecured facilities of £150m.
Phil Urban, chief executive, said: “This first quarter performance represents a robust performance given the challenges the industry faces from the rapid spread of the new variant both in terms of reduced consumer activity and disruption caused by the inevitable isolation of team members.
“Experience shows that as restrictions ease, and confidence returns, our business is able to swiftly recover. 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, supported by the benefits from our new set of Ignite initiatives.”