Food is increasingly the main driver of out-of-home occasions and there is plenty of market share for pubs to capture.
That was the message from Adam Martin, marketing and strategy director at Mitchells & Butlers (M&B) to delegates at the Numis Leisure Conference.
Martin said that there was a recognition now that food was the main driver of consumer occasions and that food was rapidly displacing drink in taking the biggest share of household expenditure spent on food and drink away from then home.
M&B's share of the full service eating out market at the end of 2010 was 4.3%, which Martin said left the company with plenty of opportunity to grow share in what is “an enormous market”.
He said: “The amount consumers spend on food and drink away from the home had remained at between 8 and 9% of total expenditure over the last 47 years - this is compared to 10.1 in the US. We will continue to edge more toward the US figure, although not all the way, with food taking an increasingly bigger share of that expenditure.”
Martin said that although the consumer outlook was currently uncertain, the long term trend for the eating-out market was encouraging.
He also said that he didn’t take the view that the use of discounting in the sector was bad.
Martin said: “If discounting is done intelligently it should be lucrative. The problem comes that if you do it so intensely, consumers will only go to your brand when they have a voucher. This set a new lower price points and causes a problem.
"I’m not against it as it’s an important tool but their must be clear purpose behind its use.”
Martin said that M&B invested significantly in consumer insight in order gain a competitive advantage on its rivals, and gathered 15 million pieces of feedback in 2010.
M&B saw a 4.9% increase in like-for-like sales across the sites that were voted in the top 25% for customer satisfaction, against a 1.9% rise for those in the bottom 25%.
He said that the company was conscious not to undermine it brands through over reaching on brand and line extensions.
He said the company was happy with the initial trial of breakfasts at 36 of its Harvester sites and was looking to roll this out further.
