M&B's sharp prices policy
A Mitchells & Butlers (M&B) field trip to its own and competitors' pubs has spotlighted the "glaring differences in price point on product and asset quality", analyst Jamie Rollo has claimed.
He said: "From our trip, we learnt that Harvester is now seeing positive like-for-like sales following its repositioning, with an average food price drop of 12% (two courses for £4.99) leading to 16% food volume growth with additional growth in higher margin drink sales.
"Toby Carvery has seen an excellent summer despite a small price increase on Sundays, something the staff put down to its value proposition (it's £5 for a carvery meal until 7pm).
"Staff in both Ember and Vintage pubs were also positive. These four concepts total 680 of M&B's 1,900 managed pubs, but more like half its sales."
Rollo said he was most impressed by compelling price points in evidence. "We saw eight M&B residential pub concepts, and these concepts together make up just over half M&B's 1,900 managed pubs.
"They nearly all had compelling offers: £3.50 all-day meals at Crown Carveries (£5.95 Saturday evening); £4.99 for a main course, plus unlimited salad at Harvester (pre 6.30pm); £2.99 Monday to Friday all-day main meals at Sizzling; £5.99 curry and pint at Vintage; £5 all-day carvery meals at Toby.
"For the sceptics, we tried most of the food and it was very palatable."
He said drinks prices were also compelling: the cheapest lagers being £2.20 in Toby Carvery (£1.89 ale); £1.99 in Sizzling (£1.59 on Mondays); £1.99 in Ember, and £2.15 in Toby — "all well below the industry average of £2.80".
He added: "M&B is now highlighting its beer prices on each font, and sometimes even on large posters outside the pub.
"The cheapest lager in the Spirit pub we saw was £2.79, in the Greene King pub it was £2.35, and in the freehouses/tenancies it was £2.75-£3."
