Mitchells sees future in food

Mitchells & Butlers has seen food become its biggest selling product as the public's appetite for pub grub sees no sign of abating.

Total food sales burst through the £500m mark for the first time at the 2,000-plus strong pub-company, with like-for-like sales growth of 9%.

This meant M&B served about 75 million meals in the year ending 1 October 2005, with food sales now accounting for 31% of total turnover, compared with just 11% in the mid-90s.

Drink sales grew 4% this year.

M&B chief executive, Tim Clarke, said the company was committed to a food-based, non-smoking offering in its business and described the Government's proposed partial smoking ban as a "retrograde step" for the industry.

"As the political process could well default to a full ban sooner or later, it would be preferable to see that position implemented in one clear and decisive step," said Clarke.

M&B also announced a £100m share buy-back but insisted that this would not impair its ability to take part in the ongoing consolidation of the sector.

Like-for-like sales at the company were 4.8% higher than last year and turnover climbed 4.6% to £1.63b (2004: £1.56b). Pre-tax profit leapt 10.4% to £195m (2004: £173m).

The company wrote off £4m as an exceptional item to cover the cost of gaining new premises and personal licences for its pubs in England and Wales.

The majority of its pubs have extended their hours under the new regime, typically by an hour a day.

By Chris Druce

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