Value food offer fuels M&B uplift

Mitchells & Butlers (M&B) has reported a 1.1% rise in like-for-like sales for the 10 weeks to 19 July fuelled by its value food offering.

The managed operator said it had made "significant" market share gains with same outlet food sales up 5.1% and drink declines limited to 0.2%. Over 110 million meals are served up at M&B outlets a year.

Overall for the 42 weeks of the year, like-for-like sales are up 0.8%.

"With around two thirds of total sales now generated by a food driven visit and beer accounting for only approximately a quarter of sales, the repositioning of the estate and its offers has ensured that Mitchells & Butlers is well placed to benefit from these long term, structural trends," a trading statement said.

In the Residential estate, which accounts for 76% of total sales, same outlet like-for-like sales were up 2% in the 10 weeks fuelled by its value food formats Pub & Carvery (average meal price £3.96) and Sizzling (average meal price £4.94).

However, the High Street division, accounting for 24% of sales, was down 0.1% reflecting a challenging market.

Sites acquired by M&B have seen a 20% uplift in trade.

Discussions over conversion to tax-efficient Real Estate Investment Trust (Reit) with HM Revenue and Customs are on-going.

"Market conditions are expected to remain challenging amidst weakening consumer spending.

"Therefore our focus remains on continuing to generate profitable market share gains from the value and volume sales strategy, the strength of the brand portfolio and the quality of the estate.

"Our leadership position in value for money eating out, serving over 110 million meals a year, is enabling us to benefit from the increasing customer focus on value."

"We expect that higher food and energy prices will intensify the cost pressures next year, although, as these prices are very volatile, the precise outlook is still unclear."