The Market

The total eating and drinking out markets have a combined value of £75bn.

Mitchells & Butlers operates around 1,600 predominantly UK managed freehold pubs. Overall, there are c. 50k pubs in the UK which operate within three distinct business models:

Managed Pubs

These are generally owned by a pub company or brewer, which employs a salaried manager and staff. The pub company also decides the product range and service style. These pubs tend to be larger than average and have higher average weekly sales. Managed pub companies report total sales through these pubs as turnover and also total pub profitability. There are c. 8k managed pubs in the UK.

Leased/Tenanted Pubs

These are also owned by a pub company or brewer but tend to be smaller. They are leased to and operated by a third party tenant or lessee, who pays rent. The tenant is generally responsible for the maintenance of the pub and contracted to purchase drink products (in particular beer) from the pub company. These pubs have lower average weekly sales of around £4,000 and are usually more dependent on the sale of beer than managed pubs. Leased and tenanted pub companies report rent and wholesale beer sales as turnover and rent and wholesale beer margin as profit. There are c. 25k pubs in the UK that operate this way.

Individual Pubs

These pubs are sometimes known as freehouses and are independently owned and operated by private individuals, partnerships or companies. The owners are free to decide which products to sell and are responsible for the maintenance of the pub. They retain any profits they make after their running costs.

Sources: Office for National Statistics, BBPA and Estimates