Britain's Mitchells & Butlers on Thursday posted a rise in annual sales growth, as more customers stepped out to grab drinks and food at its pubs despite a high inflationary environment and a cost of living crisis.
Cost headwinds, which poses a big challenge for the UK's hospitality industry, have started to abate, while high inflation has not deterred demand.
While the macroeconomic concerns keep consumer spending under pressure, Mitchells has witnessed strong trading aiding it to reiterate its annual forecast at the top end of market expectations.
The pub group had earlier tweaked its menus to manage high costs and inflationary pressures on food and energy.
The owner of Toby Carvery, Harvester, and All Bar One brands said like-for-like sales growth for the year ended Sept. 24 was up 9.1%, with fourth quarter sales growth rising 9.7%.
In July, Mitchells & Butlers said easing cost pressures would allow the British pub and restaurant group to rebuild its margins towards pre-COVID levels next year, after posting higher like-for-like sales in the third quarter.
Rising costs have posed a big challenge for the UK's hospitality industry, which has been slowly recovering from the lows of the pandemic although resilient customer spending has helped the sector keep its head above water.
However, pub groups are now expecting the pressures to ease.
"We are working hard to mitigate these pressures as far as we are able (to), both through driving sales growth and implementing efficiencies, which should allow margins to start to rebuild towards pre-covid levels from next year," the company said in a statement in July.
Article by Reuters, additional reporting by Hospitality Ireland.