Ego, the Mediterranean pub and restaurant concept, will be a “truly national brand” in a few years, due to owner Mitchells & Butlers’ scale and infrastructure.
M&B completed the acquisition of the remaining 60% stake in 3Sixty Restaurants, owners of Ego, in June 2023, having acquired an initial stake in 2018.
CEO Phil Urban sees scope for around 20-30 conversions under the format over the next three to five years.
The acquisition is expected to generate cost synergies of around £3m, with Urban saying conversions could come from any of M&B stable of brands.
“Whilst we’ve got a pipeline of well over 20-30 sites to look at, it doesn’t necessarily mean we’ll do all of those, but we will definitely find 20 or 30 over the next few years to take it up to 50 or more,” Urban told MCA.
“When you’re growing a brand like Ego, it’s still a small team. So there would be no point me coming along and saying, I want 20 sites over the next 18 months, because it would kill the team.
“You have to go with baby steps. We will extend their traditional geography this year, just north of Milton Keynes.
“That’s further south than they’ve been before, and we will extend in that way slightly out from where they’ve traditionally been.
“I would think in about three or four years time, it will be truly national, because we’ve got the infrastructure in place to be able to handle the programme of that size.”
Urban was speaking as M&B reported like-for-like (lfl) sales growth of 9.1% for the year ended 30 September 2023 vs FY22. Operating profit was £98m, from revenues of £2.5bn.
The group has seen growth across all brands and geographies, with the recovery of city centres driving sales in wet-led pubs and bars, Urban said.
Nicholson’s was the top-performing wet-led pub format, while Toby Carvery achieved highest growth in food-led.
“All parts of the market are recovering, in rural and suburban etc, but the main driver is the recovery of city centres. London in particularly has been very strong,” Urban said.
“Nicholson’s certainly benefits from offices starting to come back, plus tourists came back in their droves in the summer.
“Toby have also been doing very. If there’s a squeeze on incomes, freshly paired prepared food where you pay a fixed price and help yourself to as much as you want, it stands to reason that probably chimes with a lot of people.”
Similarly to the wider sector, the only daypart that remains weak for M&B is late night, which the group is not overly exposed to.
Meanwhile, Urban added that M&B would look to open two sites under its forthcoming new smokehouse concept and gauge the receptions before making a call on further expansion.
The first site is set to open in February or March in Solihull, with the search on for site number two.
Urban said Orleans Smokehouse is inspired by Old Orleans, which was originally owned by Punch Taverns, before being acquired by Regent Inns, and later M&B, before ceasing trading in 2011.
“We’re confident. I ran old Orleans back in the day. That’s what this is based on, it’s a modern iteration.
“There’s a lot of latent affection for Old Orleans. It’s funny how something leaks to the press and you get bombarded by emails from people who have nice things to say, so I’m hopeful it will it will hit the mark.”
