Clarke: Pub sector passed beer price tipping point

Mitchells & Butlers (M&B) chief executive Tim Clarke has claimed beer volume losses this year in the pub sector have occurred because the industry has passed a "tipping point"​ of value versus the off-trade.

Clarke (pictured​) said the value gap between the on and off-trade was now three to one compared to one to one 20 years ago.

Passing the tipping point has resulted in a stark switch in the trajectory towards the off-trade.

He said that M&B itself has seen dramatic market share growth since the Budget because of its own price differentials compared to the tenanted trade.

The company has increased drinks prices by an average of 2.5% while food prices, because of increased volumes going through its lower-priced value food offers, were down 2.8% overall.

Clarke claimed M&B had achieved 5% of relative out-performance in its first half-year.

He forecast that food sales in the company's wet-led blue collar offers would increase from 22% of sales to the high 30s per cent mark within five years.

Clarke highlighted the company's value food expansion in three key formats.

Pub & Carvery now operates at 93 sites, achieving average sales uplifts of £5,300 per week on conversion and serving over 3,000 meals a week.

Sizzling Pub Company has grown to 191 sites and also sees sales uplifts on conversion of £5,300 a week, with around 1,000 meals a week served.

Cornerstone, its community pub format, has expanded to 20 sites and enjoys average sales uplifts of £4,200 on conversion, with an average of 700 meals a week served.