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Tue 27th Nov 2012 - Breaking News - Alistair Darby on M&B
Alistair Darby – my initial thoughts at Mitchells & Butlers: Mitchells & Butlers new chief executive Alistair Darby has offered his initial thoughts on the company eight weeks after he joined it. Darby, who was previously chief operating officer at Marston’s, reported that he had found “passionate people, great pubs, bars and restaurants and good operational disciplines”. However, he noted “solid but not spectacular like-for-like sales, inconsistent returns on capital” and a sense of “positive frustration”. Darby told City analysts the key priorities for the year ahead were to expand the ways of working trial, which seeks to empower general managers and retail teams – it has been rolled out to circa 300 pubs so far. Darby also told analysts that brand development, operational excellence and a pro-active response to cost inflation would be key priorities. He also listed maintenance of focus on returns on expansionary capital expenditure and the successful execution of established strategy as key. Darby said: “The business is populated by an incredible team of folk – the group of people running our pubs are really passionate and very capable; some of our pubs are taking £6m a year. We are running brands that score very highly with customers – you only have to see the queue of customers in a Toby Carvery on a Sunday. Our like-for-likes are solid but not spectacular – we’re not where we’d like to be in the like-for-like league table. I expect to be able to use “positive frustration” to drive the business on – we have a group of people who want the business to do better and want to be enabled to do better.” Darby said there would be no “rip-roaring strategic review”. He added: “I’ve read the last four or five strategic reviews and they all point in the direction of food. We’re on that journey – and the last thing we need is to come up with something new.” The key is to execute the food strategy with operational excellence, Darby added. Non-executive chairman Bob Ivell told analysts: “Guests are still eating out but less frequently. Eating out on special occasions are more of a norm and (customers) are having that extra bottle of wine, starters and sweet - but (patterns) are a bit more unpredictable. London continues to be a market on its own. Our Castle, Nicholson’s, All Bar One and Browns sites are performing in a similar way to Fuller’s and Young’s results – there’s good growth in this market. The value end of the market is where the pressure is – it’s very price-driven and it’s where we have had to work hardest.” Ivell said the company had invested in scheduling of labour at the right times and in basic items – he reported that sales of desserts at Harvester, for example, had been affected by a shortage of crockery. The company had faced a number of problems a year ago: the guest was not the main focus, managers were drowning in administration, the acquisition programme focused on site numbers not quality, drink sales had not been a key focus and the company had an aging IT infrastructure. Ivell reported that the company organisation had been flattened, there is now clear responsibility and accountability, managers had been empowered and engaged and head office was now called the “Retail Support Centre”. The change programme has seen the company invest in front line labour and training and has seen a five point percentage increase in guest satisfaction and team engagement. A £9m investment in repairs had seen food hygiene scores rise by four percentage points to an overall 80 per cent score. Ivell added: “We’ve got a real culture change underway in the business where each person running a brand is accountable and responsible for their brand.” The culture change had been evident at the annual five-day conference in Celtic Manor where managers had shown they were more engaged in the business, Ivell said. He added: “We’ve had a resilient year, we’ve delivered good numbers, the lead indicators are encouraging and we had innovation going on with our digital marketing and information technology.”

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