Mitchells & Butlers is to ‘rapidly reshape’ its portfolio into a food-led business by reducing exposure to its ‘price sensitive’ drink-led pubs.
In a strategy review statement published today, the group, which currently operates over 900 pubs and restaurants throughout the UK, plans to develop smaller high street variants of its Harvester and Toby Carvery brands, as well as seek out sites in ‘high traffic locations’ such as retail and leisure parks.
M&B hopes to expand its portfolio to almost 2000 outlets through conversion, acquisition and new site development strategies, but plans only to keep on the brands that have ‘the potential to grow to over a hundred outlets or deliver an EBIT of more than £10m.’
John Lovering, M&B’s new chairman, said he thought the group was operating too many brands, and looked forward to seeing the changes.
“We are already implementing the plans with targets being cascaded through the business,” he said. “I am very encouraged by the enthusiasm and commitment of the management and staff and believe that we have all the right ingredients for success.”
The group said it would focus initially on converting sites into one of the ‘growth brands’, before selling off its least-performing sites. M&B will also be considering licensing its brands to other operators as part of its strategy.
M&B outlined their key ongoing strategies as:
- Rapidly reshape Mitchells & Butlers into a food-led business centred around core concepts which have significant growth potential
- Plan a withdrawal from the more price sensitive drinks-led businesses
- Improve our key operating ratios, especially net operating margins
- Improve our return on capital expenditure
- Address the pension funding and reduce net debt to around 5x EBITDA
- Separate the measurement and reporting of the property and operating performance within the business
- Move the basis of pay and culture towards one which encourages greater growth in shareholder value