Franco Manca and The Real Greek owner Fulham Shore shares drop 22 per cent on gloomy trading update

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Franco Manca is Fulham Shore's flagship brand (Source: Ewan Munro)

Shares in Franco Manca owner Fulham Shore plummeted more than 22 per cent this morning after the group said it had seen a slowdown in trade and increased costs.

The company, which also owns The Real Greek, released an update ahead of its AGM today which said it had seen "a slowdown in trade, primarily from our restaurants in London suburbs" during July and August.

"We believe this is a sector-wide trading pattern and not unique to our brands," the company said.

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The group also noted the impact that rising costs was having on its increased operations, especially in The Real Greek. In the 2018 financial year to date, the group has opened seven Franco Mancas in the UK, one in Italy and three The Real Greek restaurants, taking its portfolio to 56 sites.

However, Fulham Shore said that it had managed to hit its targets for the first quarter and was on track to open 15 new restaurants by the end of the year.

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The company also noted the availability of further properties due to pressure on other restaurant operators, and said it was considering adding more sites to the pipeline.

Alongside Franco Manca and The Real Greek, Fulham Shore also owns The Bukowski Grill in Soho. It was announced today that this single site and the franchise would be sold, though no further details were released.

Downbeat on dining

Fulham Shore is the latest in a string of casual dining firms to point to a tougher trading environment this year, following Wildwood owner Tasty Plc, Chiquito owner the Restaurant Group and Comptoir Libanais.

Cost pressures from the National Living Wage and higher import prices appear to be squeezing the sector, casting doubt over thriving foodie scenes such as London's.

“Whether Fulham Shore’s problems are company-specific or indicative of a wider problem in the restaurant industry (and for that matter any business dependent on discretionary consumer spending, be it retail, travel or media) remains to be seen," commented Russ Mould, investment director at AJ Bell.

"But it has to be a concern that the group is the fourth casual dining specialist to warn this year, suggesting that consumer sentiment may not be as strong as bulls of the UK economy would like to think."

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