Is the hospitality sector beginning to emerge from the cost crunch which has plagued it for the last 18 months?

Perhaps it would be overly optimistic to suggest the industry, which has practically been in crisis mode since Covid struck, is in full recovery mode. But encouraging signs are nonetheless beginning to emerge.

Mitchells & Butlers, one of the UK’s biggest pub companies and owner of landmark establishments such as Glasgow’s Horseshoe Bar, cheered investors today after announcing that profits for its current year would be at the top of market expectations.

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Although it was “mindful” of the wider economic challenges and the pressure on consumers, as inflation and interest rates remain high, the company said trading was strong in its last financial year and continues to be in the current period.

Analysts said its performance suggests that consumers are continuing to value visits to bars and restaurants even though there remains intense pressure on household budgets.

And crucially from a business perspective, Mitchells & Butlers said the cost pressures which have been hammering the sector are “abating” and “remain at the bottom end of the range previously identified”.

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Shareholders responded positively to the update, and duly sent shares in the leisure giant up more than 5% in morning trading.

It should be acknowledged that Mitchells & Butlers is not completely emblematic of the pub industry. As one of the biggest players in the sector, it has a level of scale that smaller independent operators are unable to count on. It also owns some of the finest pubs that the industry has to offer, many of which are in prime town and city centre locations, and some of the most established brands in the hospitality sector.

Regardless of M&Bs’ inherent advantages, it is surely encouraging from a hospitality perspective that one of its biggest players is on the up after such a difficult period.

And it is not the only company to have made positive noises this week. Dougal Sharp, founder and master brewer of Innis & Gunn, told The Herald that conditions remain “challenging” in the hospitality industry as it highlighted the progress made by its flagship lager in the on-trade.

However, on a more encouraging note, Mr Sharp expressed hope that the cost pressures that have made life so difficult for businesses over the last 18 months are finally beginning to ease.