UK's Mitchells & Butlers says softer spending hits sales, shares fall

* Second-quarter sales growth slows to 1.8%, further easing to ​1.1% recently

* Expects ⁠cost headwinds to be slightly lower ​this year

* JPMorgan analysts highlight pressure on higher-end bars within co's portfolio (Adds shares, analyst comments, background, and context throughout)

May 21 (Reuters) - ​British ‌pub group Mitchells & Butlers said like-for-like sales growth slowed in the second quarter and beyond as cautious ⁠consumers pulled back on spending, sending its shares down as ⁠much as 9% on Thursday. The ​company, which operates more than 1,700 pubs and restaurants, reported group like-for-like sales growth of 1.8% in the second quarter, marking a slowdown from the first quarter's 4.5% expansion.

In the most recent ​three-week period, ‌growth slowed further to just 1.1%, it said. JPMorgan said the company had also highlighted some macro pressures that it understood were skewed more towards higher-end bars than pubs and pub restaurants, "something that may raise concerns amongst the investor base pertaining to H2".

BRITISH CONSUMERS CUT SPENDING British ​consumers, shaken by the inflationary impact of the Middle East conflict, cut spending last month for ‌the first time since November 2024, a survey by Barclays showed last week. UK pub operators are relying on cost controls to ‌protect margins as rising wages and energy costs also pressure the sector. Mitchells & Butlers has been refurbishing venues and refreshing menus to drive footfall to offset rising costs, and said cost headwinds for ​the current financial year would be slightly lower than previously expected, adding that it currently has 15% of energy ‌costs secured for fiscal 2027. The Birmingham-based company, which operates pub and restaurant brands including Harvester, Toby Carvery, All Bar One, Miller & Carter, O'Neill's and Browns, reported a half-year pretax profit of £143 million ($192 ⁠million), up ⁠from £134 million a year ago. Earlier this month, pub group Marston's reported ‌lower sales, hurt by soft demand and refurbishment closures, while JD Wetherspoon issued its third profit warning in five months ​as rising costs ​weighed on the pub chain.

Young & Co's Brewery said on Thursday ‌its like-for-like sales rose 3.4% over the last five weeks despite a strong year-earlier period, when sunny weather boosted footfall. Mitchells also flagged a tough year-on-year comparison.

Mitchells & Butlers

Marstons

Wetherspoon (J.D)

Young & Co's Brewery