Two of the UK’s biggest pub chains have reported higher profits as improving consumer confidence continues to boost the food and drink market.
Mitchells & Butlers, which owns brands including Harvester, All Bar One, and O’Neill’s, said it made good progress in the six months to April 11 as its operating profits lifted 4.1 per cent to £153m.
Brewer and rival chain Marston’s, which has an estate of around 1,630 pubs featuring a mix of managed, franchised and leased outlets, grew underlying pre-tax profits by 2 per cent to £29.6m in the six months to April 4.
The improvement came despite the impact of disposals made over recent years as it offloads smaller pubs in favour of new-build family-friendly restaurants.
Mitchells & Butlers said the eating and drinking out market – worth an estimated £78bn – remains challenging despite an improving jobs market and return to real wage growth.
The company, which serves around 135 million meals and 435 million drinks each year, said: “Our market will benefit from this positive consumer environment.
“However, after a period of austerity, and with many consumers continuing to carry a significant amount of personal debt, we recognise that many people remain cautious and highly selective in purchasing decisions.
“We believe that this caution explains a slight slowdown in the recent rate of market growth.”
Revenues at Mitchells rose 9.5 per cent to £1.1bn as a result of 1.4 per cent growth in like-for-like sales and the contribution of new pubs and restaurants, such as the 173 outlets acquired from Orchid.
Mitchells said food sales growth was primarily driven by volume growth of 2.9 per cent, with a small increase in average spend per head.
Drink sales growth resulted from higher average spend growth of 2.7 per cent partially offset by volume falls of 2.2 per cent.