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Business strategy

Building a more balanced business

Our priority continues to be to maximise value creation from our estate of around 1,700 largely freehold sites. Value is unlocked by ensuring optimal brand fit to the local market in each site as well as improved amenity standards and we are continuing with the execution of our estate plan to achieve this goal.

Good progress has been made in the first half in this area. We accelerated the capital programme, completing 220 projects, versus 172 in the first half last year. The aim of completing projects earlier is to capture more of the post investment benefit in year, however it does result in a greater number of closure weeks in the first half of the year. To minimise the impact we have been working hard to reduce closure time required for investment through operational efficiency and by working closely with suppliers to streamline work. We continue to focus on the upgrade of amenities across the estate through our remodel programme and are generating returns of over 24% on projects completed this year.

The quantity of projects completed means that we are within our targeted 6-7 year investment cycle, and we are now reaching the tipping point in terms of reducing the proportion of the estate which has not been invested in for 10 years or more.

We opened our 100th Miler & Carter, a brand which continues to perform very well in a variety of geographies and site types, and whose expansion we plan to continue.

Instilling a more commercial culture

In the current environment a relentless focus on commerciality is essential. We have made good progress in instilling a more commercial culture across the organisation over the past two years and further progress is still being made.

The upgraded labour system rolled out last financial year is delivering benefits. The new system enables managers to plan their labour more effectively according to the trading pattern of their individual business, and to review scheduled and actual labour deployment accuracy versus the system's ideal standard. The result has been improved efficiency, with more team members working when we need them and fewer in quieter times.

Last financial year we also began the upgrade of our stock management system, the implementation and roll out of which has continued into the current financial year. The new system will help managers to reduce waste, dramatically reduce the time taken to complete stock takes, as well as benefitting guests through reduced instances of stock unavailability. This introduces a change in the way we manage stock and we anticipate significant cost savings once the system is fully embedded.

Appropriate pricing is critical to success in a competitive environment. We review pricing in the context of the local market in which our businesses operate and work hard to ensure that we are competitively priced in all of our sites. The flexibility for guests to premiumise their experience through enhanced products and menus is a key part of our strategy. We have been making further progress in this area through brand offer development, ensuring an appropriate stretch in the range of items within all of our brands as well as exploring and developing the way in which the offer is presented to guests though menu layout.

In the face of the tough inflationary cost environment we continue to leverage our scale through central procurement and fine tune processes to ensure that maximum efficiency can be achieved. By working closely with our suppliers we are able to find new ways to increase efficiency resulting in both cost savings and improved processes for our managers.

Drive an innovation agenda

We continue to drive our innovation agenda by working to improve our technological and digital capability, and developing new products and concepts to benefit from changing consumer behaviour which presents an opportunity to develop and enhance the way we communicate with guests.

Our digital interaction with guests ranges from online bookings and take away orders to feedback both through a number of third party social channels and use of our brand apps. The data captured from the digital interaction enables us to be more targeted in our communication and to tailor our message to suit individual guest behaviour and preferences.

The demand for food delivery in the industry has remained in growth, with delivery aggregators taking increasing market share. Although delivery remains a relatively small part of what we do, we continue to work with Deliveroo and JustEat to expand our presence within this growing market with 109 sites now live. Recent trials with JustEat have also enabled us to explore the potential of click and collect, presenting an opportunity to participate directly in this market through takeaway.

Guests increasingly expect to use technology as part of their experience on site. To facilitate this we have rolled out an online payment option which allows guests to view and pay their bill from their mobile device with the option to split the cost. In addition, we have been trialling our mobile order facility in three sites in O'Neill's, which allows guests to both order and pay for food and drinks from their mobile device within site, without approaching the bar. Early evidence suggests that guests appreciate the ease with which orders can be placed with this facility particularly allowing us to be more efficient during busy times.

We continue to focus on responding quickly and personally to guest feedback through online channels and are seeing the benefit of this work through our NPS score which has increased to 61, up 5 points from last year. We now respond to 90% of all social media comments which we believe is driving the benefit in our reputation with guests.

Last financial year we launched two new concepts, Chicken Society and Son of Steak, both of which are generating very positive customer feedback. These concepts remain in incubation whilst we refine the offers and we are pleased with the progress being made. The creation of new offers was important to breed an innovation ethos across the business and is something which has translated to existed brands in terms of offer development. For example, All Bar One has recently released a new menu including a larger range of healthy dishes, including vegan options, using the expertise of our company nutritionist. This sort of brand development is ongoing across the business to help keep brands relevant to their consumer groups.

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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