Mitchells & Butlers cautions new pub closing time will dampen trade

Business

Mitchells & Butlers, the owner of the All Bar One and Toby Carvery chains, has warned that trade for pubs will be dampened by the Government’s incoming tighter lockdown rules.

The pubs giant, which said sales had been boosted by the Eat Out to Help Out scheme last month but have since fallen back, will from tonight have to shut sites at 10pm in line with a new curfew aimed at tackling a rise in coronavirus cases.

Phil Urban, chief executive of FTSE 250 group Mitchells & Butlers, said his firm is less exposed than rivals. Before the coronavirus outbreak just 4% of the group’s weekly sales came in after 10pm.

However, he said: “I suspect we’ll have a sharp knock-back in sales in the next week or two.”

He added: “The future remains both challenging and uncertain, with only this week a curfew and other additional restrictions being imposed on how and when we can operate.”

Jefferies analyst James Wheatcroft said: “Short-term uncertainty related to now tightening Government restrictions will likely undermine confidence in the timing of a return to normality.”

Shares in M&B lost 2p to 134p.

The company, which is also behind the O’Neill’s chain, has been trying to recover from the Covid-19 lockdown, which saw hospitality venues close in March and reopen from July with social distancing measures in place.

In the 51 weeks to September 19 sales dropped 35.4%. Comparable sales in July slumped 32.4% in July and rose 1.4% in August boosted by the Government’s dining discount scheme.

Trading in the first three weeks of September has settled back, with a like-for-like sales decline of 6.4%.

The firm has some 1,700 restaurants and pubs, and over 95% of the estate has now reopened from lockdown.

Urban said M&B is well placed to meet challenges ahead.