(qlmbusinessnews.com via theguardian.com – – Fri , 10th July 2020) London, Uk – –
Owner of chains including Frankie & Benny’s hopes to open most by end of September
The hospitality chain the Restaurant Group (TRG) has said that one in 10 of its restaurants and pubs will not reopen this year, with the sector struggling to recover after the coronavirus lockdown.
The owner of chains including Wagamama, Frankie & Benny’s, and Garfunkel’s has reduced its overall business to about 400 locations, down from more than 600 at the start of 2020.
The group said it had secured additional funds and would prolong executive pay cuts to weather the crisis. TRG said it had taken £50m from the government’s coronavirus large business interruption loan scheme, allowing it to extend its credit facilities. Directors will take a 33% pay rise this month from their reduced lockdown levels, but still receive 20% below their normal basic salary while some of TRG’s 15,000 staff remain furloughed.
It said one in four restaurants would reopen by the end of the month, after the UK government revised its lockdown rules to open up dining from last weekend. About 60% would be open by the end of August, with most of the remainder reopened by the end of September, TRG said.
However, it said the last 10% were not expected to reopen in 2020 at all because of “considerably weak” footfall – particularly in its airport locations.
The pandemic has hastened plans by TRG to reduce its restaurant portfolio, with the casual dining sector already feeling the chill winds across empty tables in recent years. While Wagamama, which TRG bought in 2018 for £559m and has been operating for delivery during the lockdown, appears to be relatively secure, other brands in the group have been harder hit.
In March, as virtually all restaurants were closed because of the Covid-19 outbreak, TRG issued a profit warning and said that 61 – more than three in four – branches of its Tex-Mex Chiquito restaurants would stay closed, along with its 11 Food & Fuel pubs in London, with the loss of 1,500 jobs.
Last month it announced 3,000 more jobs would go with another 120 permanent restaurant closures, primarily hitting its Frankie & Benny’s Italian-American outlets.
TRG had signalled last September it would be trimming its leisure division by closing some Frankie & Benny’s, Garfunkel’s and Chiquito branches over a six-year period. However, it told managers this year that the branches were no longer viable, once coronavirus had joined the headwinds of rising costs and changing consumer habits fuelled by companies such as Deliveroo.Advertisement
Last week TRG’s rival Casual Dining Group, which owns Café Rouge and Las Iguanas, went into administration, closing 91 restaurants and making 1,900 staff redundant.
The chancellor, Rishi Sunak, this week launched a meal-deal voucher scheme to whet public appetite to return to restaurants, with up to £10 per head off for diners from Monday to Wednesday during August.
By Gwyn Topham