Sales jump at M&B as deals cheer punters
Pubs and restaurants group Mitchells & Butlers yesterday said that it expected its full year earnings to beat current forecasts, after a return to bargain dining and cheap boozing boosted sales.
The owner of All Bar One and O’Neill’s pubs chains reported a like-for-like sales growth of 2.6 per cent in the 10 weeks to 19 September.
The group said increasing demand for pub food had led to an acceleration in sales growth as offers including main meals for £2.99 and a £5 all-day carvery proved popular. Food sales surged by 5.8 per cent over the period, and drink sales were up by 1.2 per cent.
Charles Stanley analyst James Dawson said that was partly due to customers staying at home instead of holidaying abroad. “It appears that the pub food offering capitalised upon stronger demand during the summer holidays presumably assisted by stay at home vacationing this year,” he said.
Managed pub companies have outperformed rivals who operate tenanted or leased pubs during the recession as they are able to be more flexible in terms of pricing and promotional activity.
Chief executive Adam Fowle said: “It’s clear that the managed model allows you an easier way to pass on your business’s scale to the customer. I think that we are slightly advantaged on that front.”
Fowle was appointed chief executive in August following the resignation of Tim Clarke after the company lost money closing debt positions relating to controversial hedging arrangements.
M&B stopped paying dividends last year as it focused on paying down its £2.6bn debt pile and Townsend said it didn’t anticipate restoring the dividend in the next 12 months.