Birmingham pub group Mitchells & Butlers reported another leap in sales as more customers plumped for higher-priced meals.
The Fleet Street firm, which has around 1,600 sites, revealed a 26.1% increase in full-year profits for the year to September 25 after like-for-like sales improved 2.8% and Mitchells outperformed the overall eating-out market.
It said its food-led strategy continued to reap rewards with a 3.7% sales rise in the first eight weeks of the new financial year, including a 6.9% improvement in food business as customers showed a willingness to trade up its menus.
The Harvester and Toby Carvery owner has rolled out a strategy to focus on food sales as part of an overhaul announced in March to invest in its six mid-market eateries, including Harvester, Toby Carvery, Crown Carveries and Sizzling Pub Co.
Restaurant-led pubs are an attractive area for the industry after the smoking ban, alcohol duty increases and the recession impacted the drinking market.
Food now accounts for 47% of the company’s sales and Mitchells estimates that around two-thirds of total sales relate to a food occasion.
The group kept same-dish prices the same as last year but said food spend per head still rose 2.3% in the financial year as a result of menu changes, additional courses and the sale of more higher-priced items. It added that like-for-like drinks prices were up 3.7%, with volumes down 3.1%.
Mitchells said it faced higher regulatory costs in the year due to increases in the National Minimum Wage, statutory pay entitlements and alcohol duty.
There were also inflationary costs in food, drinks and distribution, which Mitchells offset with a significant fall in energy costs, efficiencies in menu management and food purchasing gains. Employment as a percentage of revenues increased slightly to 24.5% of sales.