Both pub groups shrug off cost-of-living concerns
Pub groups Mitchells & Butlers and Fuller’s have dismissed cost-of-living worries amongst consumers, celebrating robust Christmas trading figures, reports BritPanorama.
Both firms witnessed their share prices edge upwards in early dealings following the disclosure of strengthened sales in recent weeks. The announcement arrives during a turbulent time for the pub industry, with the Labour Government anticipated to unveil additional financial relief measures for the sector after facing backlash over impending business rates rises affecting most establishments.
Birmingham-based M&B, the operator behind All Bar One and Toby Carvery, informed investors of an “exceptionally strong” festive season as consumer appetite continued to surge. Like-for-like sales climbed by 7.7% during the period from December 14 to January 3, when compared with the previous year.
This performance was underpinned by a 10.5% uplift across the crucial festive dates of Christmas Eve, Christmas Day, Boxing Day, New Year’s Eve, and New Year’s Day. The update came as the company, which also operates Harvester restaurants, said that overall sales advanced by 4.5% throughout the 15-week period ending January 10.
Food sales proved particularly buoyant, registering a 5.1% year-on-year increase. Nevertheless, the business indicated it anticipates approximately £130 million in additional costs this year, chiefly driven by elevated labour expenses and food price inflation, though it emphasised it remains “confident” in its ability to navigate these challenges. Phil Urban, the chief executive of M&B, said: “Sales growth on key festive dates was particularly strong, with Christmas Day setting a new all-time record for the highest sales day, surpassing last year’s benchmark.”
He added: “Our focus remains on tackling the significant cost headwinds faced by the industry this financial year through the effective execution of our Ignite programme and our successful capital investment programme, driving both cost efficiencies and increased sales. We remain well positioned to further grow market share in the year ahead by leveraging the strength of our diverse portfolio of established brands and enviable estate locations.”
Meanwhile, rival pub operator Fuller’s has also celebrated “outstanding” trading throughout the Christmas season. The firm posted an 8.2% rise in like-for-like sales during the previous five weeks, encompassing the Christmas and New Year period, when compared with the same timeframe last year.
Fuller’s indicated that this recent strong performance has sustained its robust momentum, with sales climbing 5.3% across the 41 weeks ending January 10. Simon Emeny, executive chairman of the London-headquartered company, remarked: “I am delighted we have maintained our strong growth momentum – in both sales and profitability – and this has been further enhanced with an excellent Christmas trading period.”
In addition to this outstanding operational performance, we continue to effectively deliver on our capital allocation framework with the ongoing share buyback programme and through our extensive programme of capital investment, with a number of exciting investment schemes scheduled for the final quarter of this financial year.
The resilience demonstrated by these pub groups highlights a divergence in consumer spending patterns amidst broader economic pressures. As the government contemplates further financial measures, the ability of these companies to navigate challenges while sustaining growth could provide insights into the changing landscape of the UK’s hospitality sector.
