Mitchells & Butlers axes 1,300 jobs as sales slump on new Covid curbs
Pub group Mitchells & Butlers said it had made 1,300 people redundant since the end of September as sales slumped under new Covid-19 restrictions in England.
The owner of the Harvester and All Bar One chains said sales since September 26 had fallen 50% driven by the latest lockdown in England as it swung to a full year loss of £123m.
Like-for-like sales since September 26 declined by 26.5% reflecting the heightened restrictions. The pre-tax loss compares with a £177m profit in 2019. Revenue fell 34.1% to £1.47bn.
Mitchells said it had “not been immune to the impacts of the pandemic, and despite our best efforts to protect as many jobs as we can, we have had to make 1,300 redundancies following the end of the financial period”.
The company earlier this year revealed it was consulting on job cuts and closing 20 pubs and restaurants but at the time had not revealed how many roles would be affected.
It also warned on Thursday that there was a "material uncertainty" over its ability to trade as a going concern due to the Covid-19 pandemic and resulting restrictions placed on trading in the hospitality sector.
"This uncertainty stems directly from a lack of clarity on both the extent and the duration of current tiering, local and national lockdowns and operating restrictions, such as social distancing measures, limitations on party sizes and reduced opening times, all of which have an impact on consumers' ability and willingness to visit pubs and restaurants," the company said.
AJ Bell investment director Russ Mould said the warning was "extremely worrying", adding that management would be hoping the UK government "doesn’t plunge large swathes of the country into higher category tiers when it updates later today on the country’s restrictions".
“A lot of Mitchells & Butlers’ pubs are reliant on being rammed full of people such as All Bar One and O’Neill’s which are tailored to the party crowd, so not exactly social-distancing friendly. The idea of the country operating in tiers until at least Easter therefore poses a major threat to pub and bar trading for many months to come.
“Mitchells & Butler’s saving grace could be the widespread availability of food in its establishments. That could be the pulling power it needs to get people through the doors, assuming that people are happy to venture outdoors.”