M&B's shifts in retail emphasis

Mitchells & Butlers (M&B) has won a reputation in recent years as the UK pub industry's foremost centre of managed retail innovation.

Its success in seeing off the recent takeover bid by Robert Tchenguiz was in large part down to steadfast backing from institutional investors who believe that its retailing skills will continue to carve out increased market share.

A few years ago, I met chief executive Tim Clarke to hear about his vision for M&B. He told me the company would be using its scale in the style of the major supermarkets to

provide customers with ever greater value. (Incidentally, Clarke regarded JD Wetherspoon as its only serious competitor of size with whom it saw itself retailing in this way. He clearly didn't see much of a future for Scottish & Newcastle Retail - and he was right).

The past few years have seen conspicuous success for M&B

in driving greater sales, shifting customers to premium products, increasing the regularity of customer visits and capturing its fair share of the dining-out pound. M&B sources have talked about enjoying a "market-share turkey shoot" in recent times as some of its major competitors, most notably Spirit, were heavily distracted by non-retail issues. Ultimately,

of course, the success of a major managed pub company comes entirely down to its ability to anticipate and meet customer needs. This is where M&B excels, creating brands

that have real longevity because they have an underpinning retail offer that meets the needs of a substantial (and often growing) customer base. Its latest template trial, code-named Windsor, which currently consists of six pubs, is the brainchild

of Karen Forrester, the former Laurel chief operating officer now running 154 pubs in M&B's unbranded town pubs and classic pubs division. (M&B refers to pub research and development projects in the embryonic one or two-site stage as pilots. When a concept is a little more proven, it becomes a fully-fledged trial.)

All six Windsor sites have been converted from fairly traditional pubs where the predominant characteristics were vertical drinking, a heavy blokey bias, lager and sport. The refurbishment work has created lighter, brighter decor and seen the introduction of softer furnishings. "Defensible spaces" have been created to allow singletons, couples and groups to feel equally at ease. All seating is at dining level to encourage more eating and there's clever use of zoning. Plasma screens show BBC News 24 with the sound down. Smoking areas have been reduced considerably.

But this is no All Bar One. The retail offer places a focus on great-value wine, great-value food and great-value beer. The menu offers three size option for main courses - 40% of customers trade up to the two largest size meals. It's pretty traditional and recognisable pub fare, with lots of options. Customers, though, will regard the price points in the City of London site I visited as exceedingly keen and there is a target, thanks to detailed kitchen engineering, of 10 minutes or less for serving food. The manager of that Windsor in London's Fenchurch Street tells me customers come away feeling they are getting "much better value" than when the site was a Goose because they are enjoying better surroundings and service for the same price as before.

All in all, I'd say the Windsor I saw offers a stylish but inclusive environment. You can see why female customers would use a "Windsored" site in greater numbers while former male customers would not be shaken loose by the changes. Forrester reports that, not surprisingly, wine and food sales have shot up across the six Windsor sites with a concomitant shift towards other premium products. One of the Windsor conversions is in Glasgow where the March smoke ban threatened a big drop in the takings of what was a sport-oriented bar. In this respect, some of the changes brought in at the handful of current Windsor sites provide clues for the entire industry ahead of next year's ban. It offers the sort of shifts in retail emphasis that is keeping M&B ahead of the pack.