Reimposing restrictions led to a 10% drop in Christmas sales at Michelle & Butler
Michelle & Butler, owners of Bar One and Toby Karvy, tried to take a positive stance today despite a drop in business over Christmas.
The M&B, which runs about 1,700 bars and restaurants nationwide, said the introduction of measures to stem the spread of Omicron has led to a 10% drop in sales over the past four weeks.
It derailed what looked like a decent recovery at the start of the quarter. The fall of Christmas and New Years means that the 15 weeks to January 8th mean total sales were up 1.5% compared to a year earlier.
CEO Phil Urban has put a positive spin on things, saying sales of pints and Yorkshire puds are likely to boom as restrictions are lifted and Britain learns to live with COVID.
“Experience shows that as restrictions ease, and confidence comes back, our business recovers faster,” he said. “To that end, while we expect activity to continue to be adversely impacted in the short term, we are encouraged by the latest data on the Omron version, which we believe will allow consumer confidence to return to pubs and restaurants.” So that we can regain the momentum that was starting to build up.”
Omicron isn’t the only problem facing the company: The M&B which also owns the harvester chain said it is facing rising costs due to higher wages and energy costs. The hospitality firm expects costs to rise between £60 million and £65 million compared to pre-pandemic levels due to inflationary pressures.
Shares corrected 2.8p, or 1%, to reach 260.4p.
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdowne, said: “The group has been forced to stutter, start and shut down several times, but when it is running the business is going well.
“In the long run, the challenge remains how to deal with fierce competition in the mid-market food and drink space, but it is a question that can be left as long as the near-term hurdles are overcome. Doesn’t happen.”