Pub chain squeezed as sales slow

A slowdown in food sales heaped more pressure on the owner of Harvester today amid fears boardroom turmoil is impacting on its performance.

Mitchells & Butlers, whose brands include All Bar One and Toby Carvery, said like-for-like sales rose 0.5 per cent in the nine weeks to September 17, down from 2.8 per cent in the summer when comparisons were distorted by last year’s World Cup.

Food sales growth slowed to 1.1 per cent, lower than the rate of 4.9 per cent for the 51 weeks of the financial year to date, despite an increase in promotional activity.

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The company has much on its plate after recently finding itself the subject of takeover moves from major shareholder and billionaire trader Joe Lewis.

And it is currently being run by an interim chief executive and chairman after Simon Burke resigned as chairman in July and chief executive Adam Fowle announced his shock departure in March.

Stand-in boss Jeremy Blood described today’s figures as “robust” and said it represented the company’s 34th quarter of like-for-like sales growth.

However, margins have been squeezed by higher costs and promotional spending and Mitchells warned it expects more rises in energy, duty and food bills in the year ahead. It said it would look to offset this through further cost savings and menu changes.

Mitchells has already turned down an approach worth 224p a share and said it would do the same if Mr Lewis’s investment vehicle Piedmont follows this with a proposed second tilt at 230p, worth £941m.

Bahamas-based Mr Lewis, who is majority owner of Tottenham Hotspur Football Club, bought his shares in October 2008 for about 130p from property tycoon Robert Tchenguiz.

Since then he has overseen a boardroom coup at the group following last year’s removal of three of its board members, including chairman Simon Laffin.