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M&B reports 1.3% sales growth

By James Wallin, MC Allegra FS

- Last updated on GMT

M&B reports 1.3% sales growth

Related tags: National living wage, Helvetica

Mitchells & Butlers has reported like-for-like sales growth of 1.3% for the 43 weeks to 25 July, and said it is “assessing a wide range of options” to mitigate the effects of the National Living Wage.

The growth was driven by a 2.5% increase in like-for-like food sales over the period, with drink sales dropping 0.1%.

Total sales growth in the third quarter was 5%, bringing growth in the first 43 weeks to 8.2%.

The company said operating margins are below last year reflecting the lower margin of the Orchid estate ahead of full integration and sales growth being driven by food volumes.

On the impact of the National Living Wage being rolled out next year, the company said: “As a major employer of more than 42,000 people, the recently announced introduction of the national living wage will have an impact on our cost base from its introduction in April 2016. We are assessing a wide range of options to mitigate the impact whilst continuing to focus on retaining and attracting the best people to work in our pubs, bars and restaurants.”

So far this financial year M&B has opened 11 new sites and converted 43, including 32 conversions of Orchid sites to core M&B brands including Toby Carvery, Miller & Carter, Harvester and Ember Inns.

Chief executive Alistair Darby said: “This year we have continued to successfully grow our food volumes and our like-for-like sales ahead of a subdued market, in addition to integrating and converting the Orchid business as planned. These initial conversions are trading well and in line with our expectations.”

Total like-for-like sale sales for the 11 weeks to 25 July were up 0.8% with a 2.5% rise in like-for-like sales from food and a 1% drop in drink lfls. For the 32 weeks to 9 May, total lfls were 1.4% with food lfls remaining steady at 2.5% and a 0.3% rise in drink lfls.

MC Allegra

This story was first published by M&C Allegra Foodservice, eating and drinking out market insight.
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Related topics: Mitchells & Butlers

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