Frankie & Benny's owner braces for another fall in sales
PUBLISHED: 06:00 26 August 2018 | UPDATED: 07:19 26 August 2018
Frankie & Benny’s owner The Restaurant Group is set to report another fall in sales next week after the firm was hit by this year’s extreme weather, both hot and cold.
Analysts at City broker Numis forecast that the company – which also owns Garfunkel’s, Joe’s Kitchen and Chiquito – will post a 4% decline in like-for-like sales in the first half.
It has also pencilled in a fall in adjusted earnings for the period, from £26.5 million to £20.5 million.
Tim Barrett, of Numis, said: “Analysis of The Restaurant Group’s volume recovery will be complicated by market softness associated with recent external factors.
“The World Cup and recent heatwave have been unhelpful for the restaurant market.”
The group warned earlier this year that sales had been chilled by the wintry weather in the first quarter as the casual dining sector also continues to suffer from a slowdown in consumer spending.
The results come at an increasingly challenging time for the eating-out sector.
Burger chain Byron, Jamie’s Italian and Prezzo have all undertaken company voluntary arrangements this year, which saw hundreds of jobs lost and restaurants closed down.
Soaring costs linked to the Brexit-hit pound, the resultant collapse in consumer confidence and rising business rates have combined to hammer the sector, with more pain forecast.
Chief executive Andy McCue is overseeing a turnaround at The Restaurant Group, which has seen a revamp of pricing, food quality and marketing, as well as restaurant closures.
Graham Spooner, investment research analyst at The Share Centre, said: “Management have focused on the competitiveness of its brands, an improved customer experience, growing the pubs and concessions business, cutting costs and creating a leaner and more focused organisation.
“Investors will be focusing on costs and the effect of the World Cup and extreme weather.”
The company has closed 26 out of a planned 41 outlets so far this year and Mr Barrett said he is comfortable with the pace of change.
He added: “We remain comfortable that management has taken the right steps to reposition the business, particularly committing capital to the higher growth concession and pub restaurants markets.”