Industry analysts have backed plans from Mitchells & Butlers to focus on food sales and move away from drinks-led pubs in an overhaul following its controversial boardroom coup.
The Birmingham-based pub group proposes to focus investment on six mid-market eateries, including Harvester, Toby Carvery, Crown Carveries and Sizzling Pub Co.
The firm is particularly looking to develop smaller versions of Harvester and Toby Carvery in shopping centres and retail parks.
M&B is now under the chairmanship of Debenhams boss John Lovering after key shareholder Joe Lewis succeeded in ousting most of the firm’s leaders in January.
The strategy review comes as the pubs group is reportedly planning potential 100 per cent pay rises for the non-executive directors recommended by Mr Lewis’s Piedmont investment vehicle, which owns 22.8 per cent of the firm.
Chris Mercer, deputy editor of Droitwich-based beverage industry analyst Just-Drinks.com, said the M&B plans to focus on the family market were bring replicated across the industry.
He said increasing food sales would help to shield the company from steep rises in taxes on alcoholic drinks, after seeing the tax on beer increase by 20 per cent in the last two years.
He added: “Across the industry you are looking at 40 pubs shutting down every week, according to industry figures, which paints a pretty stark picture for the industry.
“Most of those pubs are wet-led, which means they rely mostly on drinks sales. They are struggling to keep their heads above the water while pubs that are more family-orientated are showing growth.”
He added: “It is a shame that we have got pub companies going out of business but there is an argument that those going out of business maybe haven’t done all they can to adopt to modern consumer needs.”
It is thought Mr Lovering wants to more than double the basic pay of the non-executive directors – including Fitness First founder Michael Balfour and Jeremy Blood, who was managing director at brewery Scottish & Newcastle – and increase his own pay from the £200,000 earned by his two predecessors to almost £400,000.
The group said it had appointed new pay advisers, but that remuneration was still under discussion and reports of exact plans were speculation.
However, M&B confirmed aims to overhaul its pay structures and said it wants to “move the basis of pay and culture towards one which encourages greater growth in shareholder value”.
The firm wants to increase the scale of its restaurant brands, taking the familiar names into smaller towns, including increasing Harvesters from 171 to 400 and Toby Carverys from 133 to 300.