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Business strategy

Our strategic priorities

We have maintained our consistent strategic approach with three priority areas focused on repositioning the company to a stronger competitive position:

  • Build a more balanced business
  • Instil a more commercial culture
  • Drive an innovation agenda

We continued to make strong progress across these three strategic priorities during FY 2018 resulting in sustained like-for-like sales growth ahead of the market and growth in profits in the second half of the financial year.

Build a more balanced business

Our estate comprises 1,750 pubs, bars and restaurants, of which more than 80% are freehold or long-leasehold. Our focus in this area is to optimise the balance of brands across the estate in order to create long-term value. During the year, we continued to improve the quality of the estate through premiumisation and amenity upgrades.

We completed 232 remodels and conversions in FY 2018 (FY 2017 252) and remain on course to deliver a 6-7 year cycle of investment, from the 11-12 year cycle of previous years. In order to maximise the profit uplift following investment within the financial year, we completed more projects in the first half than in previous years. The in-year benefit from this, coupled with savings made in costs relating to closure, was £3m. Conversions remained focused on the expansion of Miller & Carter, which now consists of 105 sites and continues to perform strongly both in terms of sales growth and returns.

We continued to enhance the amenity of sites through our remodel programme. Remodel projects provide a refreshed environment for sites which remain within the same brand, giving the opportunity both to delight existing and attract new guests. The remodel programme provides a vehicle through which brands can continue to evolve and innovate in the highly competitive market in which we operate.

Instil a more commercial culture

We have made progress in developing a more commercial culture across the business over recent years, with a relentless focus on profitability essential in the current environment. Our centralised procurement process allows us to leverage our scale and during the year we mitigated £6m of inflationary costs across food, drink and logistics. In addition, centralised pricing changes have generated a benefit of £5m through benchmarking against local competitors, events pricing and menu psychology.

Labour remains the most significant cost to the business and improving efficiency without compromising on quality is a constant focus. Last year we rolled out new software across all of our business to help managers to more effectively deploy labour, through more accurate sales forecasting, scheduling recommendations and electronic time management. We have seen the benefit of embedding this software with in-year cost mitigation of £8m. We will continue to find additional efficiency benefits by focusing on best practice use of the software.

Our focus on online interaction with guests continues as our guests' use of digital platforms, such as apps and online feedback, increases. Last year we introduced reputation.com - a feedback consolidation tool which enables managers to respond to comments from multiple sources through one system. We continue to see the benefits of the personal interaction this platform enables for the guest. In addition, it allows us to gather consumer insight to evolve our brands in line with consumer demands. Since the year end we have increased feedback scores across the estate to 4 out of 5 reflecting the hard work undertaken in this area.

Drive an innovation agenda

Technological developments are constantly changing the way consumers behave and our digital strategy is designed to enable us to benefit from those changes and to satisfy guests' changing needs. A mobile payment option is available in all of our brands, allowing guests to pay their bill on their mobile device. In addition, we continue to refine our order at table facility where guests can order food and drink from their mobile device at their table rather than having to queue at the bar. This facility is currently on trial in several O'Neill's sites and the results show both a demand for, and a benefit from, introducing this technology across more of the business.? As a result of this successful trial we plan to roll out the technology further across O'Neill's and to four additional brands during FY 2019.

Digital development provides us with the opportunity to better understand and enhance our guests' experiences. An example of this is free wireless charging stations which we have trialled in a selection of our city centre locations with extremely positive guest feedback. We have also developed our customer relationship management platform which enables more targeted and personalised communication with guests; the result has been increased conversions to bookings.

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Contact Us

A photograph of Tim Jones
Tim Jones Finance Director Helen Tallents PA to Finance Director +44 (0) 121 498 6560
A photograph of Denise Burton
Denise Burton Deputy Company Secretary +44 (0) 121 498 6514
Amy De Marsac Head of Investor Relations +44 (0) 121 498 6514