Britain’s biggest chain of pubs and restaurants, Mitchells & Butlers, saw its margins squeezed despite sales growing by almost 5% in festive period.

The company owns chains such as All Bar One, Browns and O’Neill’s, as well as well-known pubs including Deacon Brodie’s and the Conan Doyle in Edinburgh, and the Horseshoe and Drum & Monkey in Glasgow.

It served more than 200,000 meals on Christmas day and reported like-for-like (LFL) sales growth of 4.8% in the two weeks of Christmas and New Year.

Total sales in the first 17 weeks of its new financial year rose by 9.1%, with LFL growth of 1.7%, against 0.6% LFL growth in the previous year.

Food continues to drive growth, with sales up 2.8% in the period.

However, the FTSE 250 group said margins were pressured by “a number of factors”, including the need for tight pricing.