THE owner of some of Britain’s best-known pubs revealed a sharp slowdown in sales as persistent rainfall dampened punters’ desire to head out.
Harvester and Toby Carvery owner Mitchells & Butlers said like-for-like sales growth nearly ground to a halt in the 11 weeks to April 7, rising just 0.2% compared with 4.4% in the 17 weeks to January 21.
Mitchells, which saw underlying pre-tax profits drop 8% to £68m in the 28 weeks to April 7, said the heavy rainfall has seen a further slowdown in sales in the weeks running up to May 12, which hit both food and drink at its 1,600 UK sites.
The group, which also owns All Bar One, O’Neill’s and Crown Carveries, serves an estimated 125 million meals and 425 million drinks a year.
Shares in Mitchells fell more than 1% after yesterday’s update was published.
But Bob Ivell, executive chairman, said: “We have remained firmly on the front foot with a relentless focus on actions that will drive the medium and long-term success of the business.”
Ivell also said he was pleased with progress made in finding a new chief executive.
He is in temporary charge after Jeremy Blood and Adam Fowle left in quick succession, while the company also lost its chairman Simon Burke last year.
Burke’s departure reportedly came after he fell out with billionaire activist investor and owner of Tottenham Hotspur football club Joe Lewis, who owns nearly a quarter of the shares in the company.
The group said its margin had been squeezed by higher costs, including employment, which have chipped away at profitability. Mitchells opened 35 new sites in the first half, creating over 1,200 new jobs, and converted seven existing sites, completing its current conversion programme.
It remains on track to open around 55 new or converted sites in the current financial year.
The pub owner opened its 200th Harvester at the Pavilions shopping centre in Peterborough in the period.
Looking ahead, Mitchells warned the consumer environment remains “challenging” but cost pressures are expected to ease.
Douglas Jack, analyst at brokers Numis, said he would hold his forecasts for full year pre-tax profits of £174m, an 11% rise on the previous year.