Leading analyst Jamie Rollo at Morgan Stanley asks why haven’t Mitchells & Butler’s (M&B)like-for-like sales been improving with its customer feedback?
Ahead of its full-year results next week, Rollo said: “M&B’s business transformation plan focuses on people and guests, on the basis that lower staff turnover, better ‘scores on the doors’, improved systems and product innovation, and in particular a better ‘net promoter score’ should all lead to improved sales.
“This makes sense, and its KPIs have all been moving in the right direction…except for like-for-like sales, which have been underperforming the market for several years now.
“The trouble with some of these KPIs is that they ignore how well the competition is doing (perhaps improving at a faster rate?), might suffer from sample bias, and can ignore lapsed users. We think M&B is a cheap stock, but success on its business transformation may remain questionable for as long as its like-for-like sales and profits underperform peers.”
