Urban of Mitchells & Butlers (M&B) – which operates pubs and restaurant brands including All Bar One, Nicholson’s and Sizzling Pubs – said the sector has endured “a torrid few years” and suffered “eye-watering cost increases” following the impact from the Covid 19 lockdowns.
He continued: “Consumers, our guests, are also wrestling with these same economic pressures so trying to grow profits and fund investment while remaining competitive, and stabilising volumes, is something the whole sector is challenged by.”
On the future, he told The Morning Advertiser: “Having come through the past few years, I believe in our sector, and in our collective ability to get over any obstacles in our path.
“The next two years are going to be painful for some, and I think our guests are also going to take some time before their full confidence is restored, but we will come through, and we will continue to do what we all do, which is to delight guests day in and day out, up and down the country. It is still a great industry.”
Disproportionate and unfair
On whether the Government has let M&B and the wider industry down in the October Budget, Urban said: “Without a doubt. In opposition, the Labour Party were very supportive of the sector and vocal about the shortcomings of the Conservative Party, in terms of helping the two sectors most impacted by lockdowns, namely hospitality and retail.
“We were all sympathetic and understanding of the Government’s need to raise funds but the drop in threshold for employers’ national insurance contributions has disproportionately and unfairly impacted those same two sectors because we have the most part-time workers.
“I would urge them to think again and, if they cannot reverse their decision, to look at VAT for hospitality as well as to follow through on their promise of business rates reform.”
The focus at M&B is on the long term because it has a multifaceted approach in which all goals must tie up in a bid to grow profitability.
Urban said: “We don’t tend to talk about short term things but stay focused on the medium and long-term projects we are working on – that will drive long-term value.
No silver bullet
“We have an ongoing change programme that we call Ignite, which is really all about a way of working and is a philosophy of constant improvement and acceptance of the fact there is no silver bullet to growing profit in a business like M&B.
“Instead, we need progress on numerous fronts simultaneously, which together in aggregate adds up to a meaningful number.”
He added the biggest competitive advantage beyond its sheer scale is the range of proven and established brands/concepts it operates
He concluded: “We have city and rural, wet-led and food-led, high spend and low spend businesses, and so nearly all bases are covered and we can afford to nurture a brand if it needs repositioning while the others take up the strain.
“Our top performing brand last year was Nicholson’s, with its proud 154-year history. Traditional, premium pubs with a classic feel, that appeal to workforce and tourists alike. They are fantastic.”
