Wagamama and Frankie & Benny’s owner TRG sees central London pub and restaurant sales collapse
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The Restaurant Group (TRG), the FTSE-listed hospitality company which owns the Wagamama and Frankie & Benny’s chains along with other pubs and eateries, has said its like-for-like sales collapsed in the capital over summer as workers and tourists avoided central London.
Like-for-like sales for the 11 weeks to 20 September at Wagamama sites in central London declined 24 per cent compared to the same period last year.
Its central London pub businesses had a 38 per cent decline in sales over the same period, which included the government’s Eat Out to Help Out scheme.
Its leisure sales in central London – which make up a tiny part of its estate – sank 68 per cent.
The company’s concessions business, which runs a group of restaurant brands at UK airports, fell 68 per cent, but it only has 16 sites open.
Outside of the capital, TRG sites are trading ahead of the market average, it said.
And that’s the metric which cheered investors, sending TRG shares up eight per cent at the open.
The update to post-lockdown trading came with The Restaurant Group’s interim results, where the hospitality company slumped to a £234.7m half-year loss.
The loss for the six months to 28 June was nearly triple the £78m loss reported a year earlier.
It booked a £132.4m charge for restructuring costs, having shut nearly 250 of its 653 sites and concessions, including putting Mexican chain Chiquitos into administration.
Coronavirus and the subsequent lockdowns were to blame, the Wagamama owner said, as prior to the lockdown, trading in January and February was “very encouraging” with the business delivering like-for-like sales growth of 4.5 per cent.
As a result, thousands of staff were put on furlough or axed.
The casual dining sector has been rocked by the coronavirus pandemic, after already struggling chains were forced to close all sites for several months.
Low footfall after lockdown restrictions were eased has continued to impact restaurant businesses, particularly in city centres.
Last month Cote Restaurants was bought out of administration by investment firm Partners Group, with at least three sites set to close. Pizza Express is planning to close 75 restaurants, while rival chain Pizza Hut is shutting 29 sites.
Meanwhile the owner of Bella Italia and Cafe Rouge announced 1,900 job losses in July as it collapsed into administration.
The Restaurant Group said today that it now has around 90 per cent of sites open.
Chief executive, Andy Hornby, who took a 40 per cent cut to his salary, said the period had been “extraordinary and difficult”.
“Since reopening, I am genuinely pleased with the strength of our trading performance and would like to sincerely thank each and every one of our colleagues for their extraordinary efforts.
“Whilst the sector outlook is uncertain, and we are mindful of recent restrictions across the UK, we are confident that the actions we have taken provide us with strong foundations to emerge as one of the long-term winners,” he added.