During times of economic volatility, the kind of which you might argue the UK is exposed to at present, it is always worth keeping a close eye on what industry bellwethers have to say.
The giants of the market tend to serve as a pretty reliable barometer of any storms that might be lurking on the horizon. And in the foodservice industry, few come with as much clout as Mitchells & Butlers, whose business today transcends the best part of 1,800 sites and in excess of 43,000 staff.
So its first meaningful reaction to the impact of the EU referendum, contained in its latest financial accounts, promised to shed some intriguing light on what lies in store for the industry. Except that it opted to sit on the fence.
“We believe it is too early to predict with any certainty what the impact of Brexit on the economy might be, particularly without clarity on exit terms,” it stated, before citing three areas that might affect it in the medium to long term.
It won’t surprise anyone to know that these include potential changes to consumer confidence; changes to employment laws; and changes to input costs, largely as a result of currency fluctuations around the supply chain.
But perhaps the real clue to where the market is heading could be found elsewhere in its report, notably the passage where it revealed it has put 75 sites up for sale on the basis it will generate greater value for shareholders than retaining them as managed businesses.
The move is part of a very clear strategy to expose the business to more “premium market spaces”, where it expects to see the strongest growth going forward.
The success of its Miller & Carter brand is evidence of M&B’s appetite for growing the premium parts of its business. The steakhouse format generates strong like-for-like sales and also delivers good returns when it opens in new locations.
Consequently, Miller & Carter is on track to expand from 50 sites to 100 by 2018.
When a company M&B’s size readies itself for a fight to secure premium locations, either through acquisition or conversion, it’s a sign of things to come. The biggest players might not know how Brexit will play out, but the race for prime real estate and profit-heavy restaurant concepts is only just hotting up.