Mitchells & Butlers (M&B) has this morning reported same outlet like-for-like sales growth of 1.3% in the nine weeks to 20 September. The last quarter figures showed a slight improvement on the 1.1% increase in like-for-like sales in the 10 weeks to 19 July, resulting in full year like-for-like sales running at nearly 1% growth. The UK’s biggest managed pub and restaurant group said that drinks sales, which fell slightly in the first year of the smoking ban, had moved back into positive growth, up 0.3% for the nine week period, compared to a 0.2% decline during the previous quarter. Food sales has slowed from the previous higher growth trends, with same outlet like-for-like food sales increasing 3.6% during the nine weeks, down from a 5.1% rise in the third quarter. Same outlet like-for-like sales were up 0.9% and total retail sales were up 0.8% for the 51 weeks of the year, with food sales increasing by 4.8% for the period. M&B’s residential estate – accounting for 76% of total sales – recorded slower growth of 1.6%, compared with a 2% increase the previous quarter, as a result of a slowdown in the mid market Harvester brand, which the group said reflected the spending pressures on families with mortgages. The high street portfolio saw a slight improvement, with like-for-like sales up 0.1%, compared to a 0.1% fall in the third quarter, driven by good growth from the All Bar One, Browns and Nicholson’s formats with their strong presence in Central London, offsetting very challenging market conditions for the later evening venues. The group, led by Tim Clarke, said that in the current challenging economic environment its focus remained on continuing to grow its value for money food sales combined with profitable drinks market share gains. M&B said that the average ebitda of the 204 sites that it had acquired from Whitbread had increased significantly over the recent trading period, with a 20% uplift in sales from the levels prior to the purchase, driven by a 29% increase in average food volumes. The company said that it expected market conditions to remain challenging amidst weakening consumer spending and that during the year it would face substantial cost increases, particularly in the areas of duty, employment, food and energy costs. M&B said that while it predicted duty increases would cost it an extra £9m and employment £11m, commodity and energy input costs were proving volatile and unpredictable while consumer spending was being squeezed.