Pub group Mitchells says rising costs will hit results

The pub and restaurant group – which also owns brands including Toby Carvery, Miller & Carter and Browns – said it was facing pressure from rising prices, which are taking its toll across the hospitality sector and wider economy.

M&B said it was looking to mitigate the cost hikes “as far as possible” through an ongoing overhaul and tight control of the business but added: “There will inevitably be a residual impact on the current financial year’s performance.”

The firm said: "Brexit remains an important event for the market and has created risks for the sector, principally around the supply and cost of products and workforce shortages."

It comes as the group reported narrowed pre-tax losses of £42m for the year to September 25, against losses of £123m the previous year.

Like-for-like sales fell 9.6 per cent over the full year, although it said it has seen a return to growth since pandemic restrictions eased on July 19 and a return to profit in more recent months.

The group said the current rocketing inflation has presented a “major challenge” to the wider hospitality sector, which has been hit hard by the supply issues across the economy.

On top of this, firms in the sector are also facing an extra staff bill after Chancellor Rishi Sunak announced an increase in the national minimum wage from April.

Mitchells & Butlers chief executive, Phil Urban, said: “The trading environment remains challenging and cost headwinds continue to put pressure on the sector.

“However, we have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme which will deliver sales and efficiency improvements to help combat these challenges.”