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Thu 9th Jan 2020 - Update: M&B, Stonegate/Ei Group, Coal Grill & Bar, McDonald’s
M&B reports 5.6% like-for-like sales growth over key three weeks of Christmas: Mitchells & Butlers has reported it traded well over the core three-week festive period, with like-for-like sales growth of 5.6%, including strong performances on all of the key festive days. Overall sales have strengthened in the seven weeks to 4 January the period since our last update with like-for-like growth of 3.5%, with particularly strong food sales growth of 4%. The company stated: “In the year to date we have already completed 81 conversions and remodels and opened one new site as we continue to improve amenity, and premiumise sites where possible. We remain encouraged by the returns being generated.” Chief executive Phil Urban said: “We are pleased with our trading performance over the festive trading season against a strong set of results last year, again demonstrating the breadth of appeal of our brands for special occasions. We achieved record sales levels across the five key festive days at growth of 6.5%. This continued progress reflects the output of our Ignite initiatives which will continue to be our focus for the year ahead.” Overall, like-for-like sales were up 2.6% in the First Quarter, the 14 weeks to 4 January 2020.

CMA green-lights Stonegate acquisition of Ei Group subject to the sale of 42 pubs: Stonegate Pub Company’s proposed £3bn acquisition of Ei Group will be approved subject to the sale of 42 pubs, the Competition and Markets Authority has stated. It a note published this morning, the CMA stated:”The CMA is of the view that the 42 pubs are saleable and address the competition concerns in the 51 local areas. The CMA considers that the pubs should be divested in a maximum of three packages, unless otherwise agreed in writing by the CMA.” The CMA has been investigating the deal between the two pub groups. Together, the two groups operate close to 5,000 pubs across the UK, including chains such as Slug and Lettuce and Yates, as well as a large number of unbranded pubs. 

Coal Grill & Bar closes half of its sites as part of a company restructure: Coal Grill & Bar, the Sunshine Capital-backed group, has closed four of its restaurants as part of a restructure of the business. The company, which Sunshine Capital acquired in May 2018, has closed its sites in Telford, Meadowhall Sheffield, Swindon and Milton Keynes. The closures leave the business with four sites in Exeter, Basingstoke, Gloucester Quays and Bristol. Sunshine was a newly incorporated company led by chief executive, Sumit Chadhi, who previously set up chicken chain, Frangos. A spokesperson for Coal Grill & Bar said: “The Coal Grill and Bar restaurant group is going through a company restructure in order to protect as many jobs as possible by continuing to trade in a challenging economic climate. Unfortunately, there are some restaurants where we have been unable to secure the trading terms which would allow us to continue operating.” The deal to acquire the then nine-strong group saw Beringea and Octopus Capital exit their investment in the business. The group under the Charterhouse Leisure umbrella was originally put on the market in 2016, when it had ten sites and was thought at the time to be valued in excess of £9m.

McDonald’s discrimination lawsuit: The British boss of McDonald’s who was sacked over an affair with an employee is being accused of overseeing a ‘ruthless purge’ of African-American staff. Steve Easterbrook, 53, has been named in a lawsuit filed by senior executives Vicki Guster-Hines and Domineca Neal in Dallas, which alleges the company discriminated against African-American customers and staff. The lawsuit, filed in Illinois, claims McDonald’s practised ‘systematic but covert’ racial discrimination. But it claims the climate was especially hostile when Easterbrook took over in 2015. It says black executives routinely missed out on promotion. Under Easterbrook, they say the firm ‘conducted a ruthless purge’ of senior African-Americans. McDonald’s said: ‘We disagree with characterisations in the complaint.’ It said people of colour accounted for 45% of its corporate officers and all US ‘field vice-presidents’. Meanwhile, McDonald’s new chief executive, Chris Kempczinski is trying to change what has been described as a ‘macho, guys club’ corporate culture at McDonald’s. Kempczinski’s predecessor, Steve Easterbrook had a reputation for partying with other employees and was ultimately fired in November for violating the company’s rules that prohibit dating colleagues. According to the Wall Street Journal, Easterbrook and other executives, including the former head of McDonald’s human resources, David Fairhurst often partied after work with other executives and staffers Fairhurst voluntarily stepped down one day after Easterbrook left the company. Reports suggest that their outings included heavy drinking, flirting and physical contact with female employees. Kempczinski reportedly will no longer tolerate this type of partying and fraternising at the company.

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