Tuesday, July 5

UK Pub Chain Says Inflation Will Add Extra £207 Million in Costs


Article content

By Damian Shepherd

(Bloomberg) —

One of Britain’s biggest pub operators Mitchells & Butlers Plc expects to be hit by an extra £207 million ($257 million) in costs as energy, food and wage bills soar.

The owner of Harvester and All Bar One brands forecast that inflationary pressures could push its total costs up by 11.5% in 2022, from a base of 1.8 billion pounds in 2019, in a statement Wednesday. This is equivalent to a 3.7% annual increase over three years.

Mitchells & Butlers said it is not alone in facing these challenges and the hospitality sector as a whole will be hit by inflation. It said costs could rise by about 6% in the next fiscal year too.

Article content

The company sees these pressures worsening by a further 6% next year, dependent on the volatility of energy markets. That won’t be helped by Britain’s cost-of-living crisis piling continued pain on consumers, said the pub operator.

The warning comes as Britain’s inflation rate surged to its highest level since Margaret Thatcher was prime minister 40 years ago. Consumer prices rose 9% in the year through April, the fastest rate since March 1982, the Office for National Statistics said.

Despite the challenging outlook, Mitchells & Butlers said its sales have recovered strongly from lockdowns during the last six months. The company shrugged off the impact of the omicron variant to lift sales by 1% compared with the same period in 2019.

©2022 Bloomberg LP

Bloomberg.com



financialpost.com