M&B – Much ado about branding

Hailing from England’s second city, I am always pleased to get the chance to trumpet the achievements of Birmingham’s finest. Foremost among these within the hospitality sector is, of course, the mighty Mitchells & Butlers (M&B). This is particularly pleasing, when as has been the case in several recent periods, the business has got its collective act together better and is driving its top- and bottom-lines forwards.

However, as a London-based market analyst, it is less than satisfying when only limited brand specific performance information is disclosed within such a multi-faceted house of brands. This is of course, by no means unusual (and yes, why would you reveal unnecessary information that might well be of interest to assorted competitors) but to offer some additional illumination, I have had a quick review of MCA’s Eating Out Panel and Operator Data Index to tease out a few insights.

Within its last full year report & accounts, M&B proudly stated how it operates “brands for all occasions”. These totalled 14 in the UK last September, of which nine ran to over 100 outlets. Excluding those that are primarily non-branded (Castle and Premium Country Pubs), those that are essentially a restaurant/steakhouse (Miller & Carter) and those that have subsequently been trimmed to less than 100 (Stonehouse), this leaves five more substantial brands to review: Ember Inns, Harvester, Sizzling Pubs & Grills, Toby Carvery and Vintage Inns.

Now at this point, MCA’s consumer research findings start to take a less assured path. Looking at results for the year ending July 2019 versus the previous year, none of the five featured brands have increased their share of pub channel visits at lunch or dinner. In part this reflects a programme of brand conversions and some closures. Pub numbers have been reduced at Harvester, Sizzling and Toby Carvery, so some visit share decline is to be expected, while the outlet counts have remained unchanged at Ember Inns and Vintage Inns. This highlights how the business is looking to drive, and is achieving, stronger growth through its restaurant business, certain smaller pub brands and non-branded pub sub-groups.

That said, given the size and importance of the five leading pub brands, the business needs to find more ways to improve the performance of these corporate pillars. Certainly, in terms of Net Promoter Score ratings (based on combined lunch and dinner day-parts) there is more positive news, with three brands enjoying year-on-year improvements, namely Harvester, Sizzling Pubs and Toby Carvery. Moreover, a special commendation should go to Toby Carvery with its 52 score – an excellent result. However, this is in marked contrast to the relatively low scores of 24 at Vintage Inns and 31 at Ember Inns.

At this point it is worth scratching below the surface to look at assorted key performance indicators to see where some shortcomings in the brand offers might exist. Here it is conspicuous that there are significant ratings differences between Toby Carvery and the Inns pair of Vintage and Ember. In particular this is regarding perceptions of the food quality and its freshness, family friendliness and, importantly, also with assessments of value for money. What is interesting here is that while Toby Carvery is clearly positioned as a more overtly value-led brand, both Vintage inns and Ember Inns are both in that tricky, mid-market pub space, where there are risks of being caught in a non-descript no-man’s land of not being recognised for one thing or another.

So, in conclusion, I would suggest there is still more to come from M&B. It has multiple brand and non-brand levers at its disposal and needs to keep managing these and skilfully refining the mix to optimise performance. I wouldn’t be surprised by further moves to expand the non-branded estate on the back of some concerns about creeping consumer fatigue with more corporate pub chains. Judging the pace of this, as with how fast it can move along the value to premium brand positioning spectrum, will not though, be easy in a tightening consumer economy.