CPL Training’s public relations advisor Paul Charity, former editor of the Publican’s Morning Advertiser, takes a look at how managed company Mitchells & Butlers is faring under new executive chairman Bob Ivell

25. November 2011 12:13

It was a big day for Mitchells & Butlers (M&B) last Tuesday. It was the first time new executive chairman Bob Ivell had offered his considered view on life at the UK's largest licensed retailer. For Ivell, the company is a bit of a curate's egg. There's no doubting, according to Ivell, that it's a good company, but change is required to make it a great company.

He indicated two key internal problems - the company hasn't sufficiently shuffled off its Bass heritage and hence is a little too old-fashioned and is dogged by bureaucracy that clogs up the internal systems.

The new executive chairman also noted that the competitive landscape had changed since the three or four years after the sale of Scottish & Newcastle Retail to Spirit when M&B had grown like-for-like sales quickly. "On reflection, there was quite a period when it didn't have a major competitor – Spirit was in disarray," he told analysts.

It was an unusual presentation in that City analysts do not normally get so much detailed internal stuff on how systems within a company need to change. Ivell was at pains to list the many and varied ways in which M&B's Birmingham headquarters had turned into what he describes as the "Command and Control" centre.

Pub managers, Ivell reported, could receive as many as 120 e-mails in two hours from the centre. "It's like a big funnel at the top and it's been clogging up the system." he reported. He had one telling anecdote about the annual company-wide week-long trip to Celtic Manor where a series of awards and conferences are held for the company's divisions.

This year for the first time the entire M&B board had decamped to the Celtic Manor on the basis that it's a golden opportunity to spend a lot of time with the people who actually run the company's pubs. "It's the first time the board had ever attended and talked to the troops. "It didn't happen in the old days – a reflection of the culture of the business," said Ivell.

Technology within the company is also a "little old and antiquated". He gave the example of Wi-fi – the company did not have a single pub offering free Wi-fi, which put it at a disadvantage to the coffee chains. (It's now being rolled out)

From a performance point-of-view – and overlooked by the news reports – the most interesting aspect of the presentation was the first real indication of how M&B's "Six Brands" strategy was shaping up. It was a full 18 months ago that then chairman John Lovering unveiled an ambitious plan to grow its six key brands – Crown Carveries, Toby Carvery, Harvester, Vintage, Premium Country Dining and Sizzling Pub Company – exponentially and with a new focus on leasehold sites on retail parks.

Well, it is the retail park openings that are the star performers with the Return on Investment in excess of 30%. Laggards are the "package lease conversions" with 15% return on investment – although Ivell pointed out that the conversion of former Ha Ha Bar & Grill sites would take two years to see optimum performance.

But there was a worthwhile reminder of just how big the UK eating out market is – it's grown by 60% in the past ten years and is currently a £43bn per annum market.

Ivell provided examples of the kind of money some of the company's new openings are taking. A Toby Carvery in Basildon on a retail park site is taking £40,000-a-week and the Green House in Sutton Coldfield, now a Premium Country Dining venue and previously an Ember Inn, is taking £51,000-a-week, a startling 101% return on investment. Ivell posed a question: "If we are taking those kinds of numbers in the bad times, what sort of numbers could we get in the good times?" Probably quite similar in my view – there's not a lot wrong with M&B operationally and there's lots of market share left for it to grab.


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About the author

Phil Mellows

Former Group Editor of the Publican’s Morning Advertiser, Paul has a wealth of experience in the licensed retail and drinks industry. During his career Paul has helped to establish licensed retail trade publications.

His commercial awareness and communication skills have led Paul to develop his own PR agency, Propel, and he is now the CPL Group’s Public Relations Advisor. Paul is responsible for producing high quality news stories and external newsletters as well as building media relations and helping to develop business strategies by launching the CPL Group in the casual dining arena.

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