M&B ‘must triple sales growth’
September 24, 2008
Harvester and O’Neills owner Mitchells & Butlers, with outlets throughout the area, has said it would need to more than triple sales growth to offset soaring energy bills and regulatory costs over the year ahead.
The group reported like-for-like sales up 0.9 per cent in the 51 weeks to September 20 but said comparable sales would need to grow by around three per cent to keep operating profits at a similar level in the following year.
There is an O’Neills in Friar Street, Central Reading, and Harvesters include The Tylers Rest, Norcot Road, Tilehurst, and The Mansion House, Prospect Park, Leibenrood Road, West Reading.
M&B said it was facing a £9 million rise in duty, £11 million in higher employment costs and “highly volatile and unpredictable” energy costs.
However, the group said its focus on food was continuing to pay off, with around two thirds of total sales now driven by food, while drink sales also moved back into positive territory after being affected by the smoking ban last summer.
Like-for-likes sales rose 1.3 per cent in the nine weeks to September 20, with food ahead by 3.6 per cent and drink up 0.3 per cent.
M&B, which owns 2,000 pubs, or around three per cent of the UK pub market, said it was cutting costs, overhauling menus and putting in place plans to become more efficient in staffing, stock control and energy usage. It has already trimmed costs by £20 million over the past year and improved staff productivity by 5.1 percent.
However, it called on the Government to scrap plans for further alcohol duty increases.
The group said beer sales volumes had continued their decline, down by a further nine per cent in the past quarter alone. It said beer now accounted for a quarter of all sales.
The largest division in M&B’s portfolio – its residential pub estate, which accounts for 76 per cent of turnover – saw comparable sales growth of 1.6 per cent in the nine-weeks to September 20.