M&B bemoans 'difficult' August

By John Harrington, M&C Report

- Last updated on GMT

Related tags: Trading conditions, Better

Alistair Darby: 'Despite a difficult trading period in the last quarter, the transformation of our business is well on track'
Alistair Darby: 'Despite a difficult trading period in the last quarter, the transformation of our business is well on track'
Mitchells & Butlers (M&B), the managed operator, has reported a 0.1% rise in like-for-like sales in the nine weeks to 20 September following “difficult” trading conditions in the pub sector in August.

Growth was +0.1% for food and -0.2% for drink. Like-for-likes across the 42 weeks to 19 July grew 0.7% (food: +8%, drink: +0.6%), and across the 52 weeks to 20 September, like-for-like growth was 0.6%, with food up 0.7% and drink up 0.5%.

M&B said: “Having seen an improvement in demand in July following the World Cup, trading conditions during August were difficult in the pub market, as consumers remained cautious about spending and rainfall was significantly higher than last year.”

The company said margins “remain below last year, as a result of lower levels of sales and also of spend per head, as we moderate price increases to drive volume back into our sites”.

The 173 former Orchid sites continue to “trade well and in line with our expectations”. “Our investment plans are progressing and we are on track to have converted the first few sites to our brands prior to Christmas this year. Integration planning is proceeding at pace.”

New sites

In addition to the Orchid transaction, M&B have opened 22 new sites and converted or expanded nine sites this financial year.

The company said that during the period it “continued to make progress in improving our volume performance through delivering on our key initiatives”.

“Notably, we have focused on: enhancing amenity (our accelerated remodel programme generates strong returns and food rating scores continue to improve); improving guest service (through increased investment in training) and investment in IT infrastructure (new pub systems have been rolled out to more than 1,000 outlets alongside new technology to deliver enhanced management information to our frontline teams). As a result, we are confident in the strong platform we are building from which to grow momentum as we move into 2015.”

Alistair Darby, chief executive, said: “Despite a difficult trading period in the last quarter, the transformation of our business is well on track. Coupled with the successful integration of the Orchid estate, this gives us confidence in our future growth prospects.”

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3 comments

Brand obsessed

Posted by Tony Bell (concerned M&B private shareholder),

In a time when most customers are looking for individuality M&B have concentrated on corporately homogenising their pubs. Sadly this includes with utter insensitivity the hithertoo unique iconic White Horse (aka The Sloaney Pony) on Parsons Green SW6 which they have now turned in to just another of their branded Castle Group pubs. Furthermore with the introduction of new tills they have increased their prices wef 12/08/14 way above inflation (e.g. £4.60 for a pint of Landlord and £4.60 for a pint of Adnams Broadside) in order to achieve an unrealistic gross profit margin on real ales of around 75%!!
Little wonder that loyal regulars and customers who make it a destination visit based on its enviable hard earned past reputation are beginning to vote with their feet at the recent corporate changes.
It takes a long time to build a reputation but a very short time to lose it AND "If It Ain't Broke Don't Try to Fix It!"

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No Sympathy

Posted by Jack,

With overall margins down perhaps M&B should see the bigger picture. My local M&B in Windsor stuffed its prices of cask up nearly 12% at the beginning of Summer, no doubt to catch out the tourists but since then the place hasn't had the local support, many deserting the place for the JDW amongst others. I have no sympathy for a tough summer if undermining their all-year, long-term clients for a swift summer-buck is their approach.

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Another "Difficult" trading period

Posted by Ian Andrews,

Once again Darby produces another set of results below M&Bs competitors performance.

Apparently it was due to a wet August. Hang on weren't the last quarter results poor due to sunny weather?

The significant drop in share price indicates the city is fast running out of patience with Darby's "positive moving forward just don't look at the current performance" spiel

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