Like-for-like sales at Mitchells & Butlers improved in the fourth quarter, despite the impact of extreme heat and rail strikes. Growth continues to be driven by food sales.

Mitchells Butlers Nicholson's

Total sales, however, have declined by 1.3% during the year, driven mainly by temporary Covid-related closures in the first part of the year and site disposals since 2019.

Inflationary cost pressures presented an increasing challenge through the second half of this year, initially concentrated in the areas of energy, wages, and food costs, but now evident throughout most of the supply chain.

“The recent announcements of domestic and business energy price caps are welcomed, both due to the impact on guest disposable income, and the reduction of cost downside to the business from potential further adverse market price increases,” says the company in its fourth quarter trading update.

“However, we expect our total energy and utility costs to have increased to circa £150m for [full year] 2022 (FY 2019: £80m) and even with the cap in place anticipate a further increase on that for FY 2023. That is despite several initiatives under way to reduce our ongoing energy usage, including greater focus and review at a site level on energy efficiency, combined with investment initiatives such as the installation of voltage optimisers.

“We have currently bought forward approximately 20% of our requirements for the next financial year.”

Chief executive, Phil Urban, said: “The trading environment for the hospitality sector remains very challenging, with cost inflation putting increasing pressure on margins. And we are also mindful of the pressures on the UK consumer over the coming months.

“We remain focused on the delivery of our Ignite programme of initiatives, driving sales and delivering cost efficiencies. This will, combined with our diverse portfolio of well-known brands and strong estate locations, put us in a stronger competitive position to face the challenges ahead.”