M&B reveals growth ambitions for brands
Chief executive Alistair Darby revealed the extent of the operator’s ambitions on the back of results for the year to 27 September 2014, which showed a 0.6% in-crease in like-for-like sales with total revenue up 4% to £1.97bn.
Like-for-like sales grew 2.4% in the first eight weeks of its current financial year.
Darby said that by 2016 he expected the company’s Upmarket Social (Nicholson’s, All Bar One, Castle and Alex), Special (Vintage Inns, Browns and Miller & Carter) and Family Brand (Toby Carvery and Harvester) segments to represent 70% of sales, up from 57% as of 2010. He said the company would concentrate on optimisation in its Heartland (Crown Carveries, Oaktree and Sizzling Pubs) and Everyday Social (Ember Inns) arms.
On the leading brands, which were boosted by 23 new openings and eight conversions during the year, he said: “We have worked out that there’s a theoretical nationwide capacity of about 1,200. That’s not to say we will go to that because returns and site availability will always be key but there is clearly room for growth.”
Orchid
M&B has identified 96 of the 173 Orchid sites bought in June as being able to “very quickly slot into the major brands” over the next two years. Darby stressed that there were no plans to dispose of any of the sites, which he described as “good freehold assets which we feel we can do more with”.
Food focus
Like-for-like food sales were up 0.7% in the year, compared to 0.5% for drink sales. In the first eight weeks of 2015 food like-for-likes were up 3.3%, with drinks up 1.4%.
Darby said there was a clear opportunity to “grow our share of the eating and drinking out market by leveraging our brands and scale to deliver great value guest experiences”, adding that M&B currently held 3% share of a £78bn market.
On the strategy for food growth Darby said breakfast was a huge growth sector with the company targeting 11m breakfasts across the estate, including 5m at Harvester and 3m at Toby.
He added: “I think we can say goodbye to formal mealtimes. We are going to need to be much more flexible and offer more opportunities for customers to use our pubs, not just in those traditional windows.”
Value
Darby said: “Consumers don’t want cheap. People are proud and times have been hard and no one wants to admit they are tight for cash. They want to be buy good quality stuff at a fair price. I am going to Aldi because it is great value but I go there and find some surprisingly good products and it makes me feel good and trade up a bit.
“The battle for all of us is that combination of great value and great experience. Whether you are paying £9.99 for an all-you-can-eat meal at Harvester or £30 for a Chateaubriand at Miller & Carter, it has to be right.”
Brands
M&B re-modelled 174 pubs in 2014, up from 97 in 2013. It intends to complete 200 in 2015 on top of the 40 to 45 Orchid conversions.
On the core brands, Darby said he hoped to roll out an updated design in more of the Harvester sites. He said around 12 had already been refreshed with a “brighter, more modern feel”.
On its second biggest brand, Toby Carvery, Darby said the company would continue to stress the message though all promotion that the brand was the “home of the roast dinner”.
He said All Bar One’s in-augural airport sites and its outlet at O2 were working well and showed the strength of the brand.
