The owner of chains like Frankie and Benny’s and Chiquito has said it will close up to 35 more of its restaurants.
The Restaurant Group blamed the move on rising operating costs and customers cutting back on spending.
The company, which has about 410 restaurants, said it will reduce its discount by 30% by next year by closing loss-making locations.
However, the successful Wagamama chain will not see any closures.
It comes after The Restaurant Group announced plans to close 250 locations in 2021, largely affecting employees at its Frankie & Benny’s, Chiquito and Food & Fuel brands.
The company’s management has come under fire from investors urging change after the company’s stock fell by two-thirds in the past year.
The group, which employs 18,000 people in the UK, said on Wednesday that its pre-tax loss for 2022 rose to £86.8m from £35.2m last year.
And that’s despite sales rising to £883m.
- Frankie & Benny owner closes up to 120 locations
- Wagamama was sold to the owner of Frankie & Benny
Ken Hanna, the group’s chairman, said the past year has been “challenging” for the casual dining sector as businesses have had to cope with rising costs after being shut down during the pandemic.
Labor shortages, demands for higher wages and rising ingredient costs have made trading “tough,” the company added.
The company also said it had been “affected to some extent by the cost of living pressures on the UK consumer”.
Chief Executive Andy Hornby said the company has a “clear plan” to grow its margins over the next three years and “deliver significant value to all of our stakeholders.”
Russ Mold, investment director at finance firm AJ Bell, said The Restaurant Group is under pressure from larger investors to sell some of their brands.
Spinning off or selling Frankie and Benny’s and Chiquito could help the broader business, he added, allowing it to focus on Wagamama “which is clearly a restaurant brand with real appeal.”
“Rename the company Wagamama, clean out the rest, and you’d have a streamlined and focused operation that might be more attractive to investors,” he said.
Add Comment