Two major British pub operators on Wednesday warned that expenses stemming from the Russia-Ukraine war and the cost of living crisis would crimp their profits, suggesting a tough year ahead for an industry still recovering from the pandemic. The caution from Mitchells & Butlers and Marston's underscores challenges facing the hospitality and wider consumer sector as prices of everything from fuel to food ingredients are rising and consumers are limiting spending. "Grain costs have gone through the roof, animal feed therefore is higher, therefore livestock costs are higher," Mitchells & Butlers Chief Executive Phil Urban told Reuters.
Government advice for people to work from home and limit social contacts in preparation for an Omicron winter left social venues like pubs and restaurants largely empty in what would have otherwise been one of their busiest periods. Marston's said its pubs in Scotland and Wales felt a bigger impact than England because of tighter restrictions, adding that the sales of drinks in general had performed better than food sales. "While the emergence of the Omicron variant and subsequent government guidance temporarily impacted consumer sentiment, we remain confident that the strong trading momentum, which we were experiencing prior to that, will resume," Marston's Chief Executive Officer Andrew Andrea said in a statement.
The company, which runs 1500 venues across the UK, said it has not yet been affected by booking cancellations due to Omicron.