Leased pubs: value gap passed tipping point
Mitchells & Butlers (M&B) boss Tim Clarke has claimed the on-trade drinks market has passed a "tipping point" in the value gap between managed and tenanted operators.
Clarke said M&B is now charging 40p a pint less for standard lager that the average price in leased pubs.
The company has unveiled its "strongest ever recorded rate of market share gain" with drink sales up 1.2% while beer volumes in the wider on-trade market dropped 9.9% in the three months to end of December 2009.
Cask ale sales rose by a mighty 18%, with the gains split evenly between wider distribution and sale increases. Clarke said there were now large structural market share shifts in a very depressed beer market.
"If anything there has been a degree of acceleration in the past three to four months," he said.
Last June, Clarke warned that beer volumes in the pub sector would drop by another 40% over the next ten years. Asked for his forecast on beer volumes in 2009, he declined to be drawn but added: "My ten year forecast looks a bit conservative."
Clake said that that the eating-out market was characterised by "sharp trading down".
He said there was growth in sales of meals below £5 and the top end offers such as Premium Country Dining were "absolutely fine".
The company's mid-market brands are where the "deflationary pressures are the strongest". Clarke said the eating-out market would be hit this year by the forecast 3% reduction in consumer spending.
But the value-oriented, integrated pub food and drink offer with high amenity levels is "in a position to take market share".
