Managed pubs holding down food prices

Managed pub groups are not passing rising food costs on to customers as competition for scarce consumer spending rages.

The latest Menurama survey of managed outlets, conducted by researcher FMCG, shows that operators such as Whitbread and Mitchells & Butlers (M&B) are holding down prices despite a sharp increase in the cost of raw ingredients over the past year.

The battle for cash-strapped customers could put the squeeze on food sales in tenanted and leased pubs, which do not benefit from the long-term supply deals which managed pubs can use to keep prices down.

The Menurama figures, which track food prices in branded and multiple-operated businesses, show the average menu price of a rump steak on pub menus fell 1.9 per cent compared to January 2006.

The M&B-owned Vintage Inns and Harvester brands, as well as Whitbread's Beefeater and Chef & Brewer chains, have reduced their average main course price year-on-year.

The price of pub starters and desserts has also fallen across the board. These are often used by operators to drive deals while adding to overall customer spend.

Figures from the Office of National Statistics show an 8.4 per cent annual rise in the wholesale cost of food staples such as milk, bread and packaged meat.

David Humphreys, director of FMCG, said: "Margins are being sustained by astute management of the sales mix via the menu, purchasing economies and opportunistic pricing."

The cheapest main course dish found by the survey was a 6oz burger, without chips, sold for £1.75 by M&B's Sizzling Pub Company brand in Greater London.

Humphreys added: "More and more outlets are giving details of the regional origin of their food, and in the value and mainstream casual segments of the market, household food brands are becoming more widely listed. One outlet even listed Bisto gravy by name in eight of its dishes."