Mitchells & Butlers posts slowdown in Q3 LFL sales amid 'challenging' conditions

"The trading environment remains very challenging with inflationary costs squeezing consumer discretionary spending and putting pressure on the industry's margins," company boss Phil Urban said.

Total LFL sales grew by 0.9% over the 13 weeks ending on 16 July in comparison to the same period three years ago, before the appearance of Covid-19, versus a 3.8% rise in the second quarter.

Food sales advanced by 2.9% in the third quarter, but were offset by a 1.3% decline in drinks sales.

Year-to-date total sales had come off by 1.6% chiefly as aresult of temporary Covid-19 closures in the first half of the year and as a result of disposals since the 2019 financial year.

The company said its near-term outlook was unchanged but that "it now seems likely that, particularly in the case of utilities, wages and food costs, these will persist at or above current levels well into the next financial year, increasing and prolonging the medium term impact on margins."

Despite the "challenging conditions", Mitchells&Butler's said it remained committed to investing in boosting its competitiveness, pointing to the completion of 116 conversions and remodels year-to-date to back up its case.

Shares of Mitchells&Butlers drifted lower by 0.35% during the session to 172.0p.