The owner of restaurant chain Wagamama today warned the coronavirus crisis will almost halve its sales over the first six months of 2020.
Restaurant Group told investors to prepare for a 45 per cent plummet in sales for the first half of the year due to UK measures to contain Covid-19.
The government has warned people to avoid pubs and restaurants in an attempt to stop coronavirus spreading as UK infections rose to 1,960.
Restaurant Group revealed like-for-like sales over the past two weeks have fallen 12.5 per cent due to coronavirus.
It warned its airport concession stands have suffered the brunt of the coronavirus fallout, amid worldwide travel bans.
As a result, the group plans to reduce capital expenditure by at least £45m, from £75m.
“In the last two weeks we have seen an increasing and material impact of Covid-19 across our businesses,” Restaurant Group said.
“In particular, our concessions business has been significantly impacted with like-for-like sales down 21.7 per cent and getting worse by the day given International travel bans.”
Restaurant Group’s shares rose 4.8 per cent in early trading as investors had expected a sharper drop in sales.
“Investors seem to be confused as to whether having new sales guidance is good news as it provides some sort of clarity, or whether it simply makes the company’s debt-related problems even worse,” AJ Bell investment director Russ Mould said.
“The leisure company was in turnaround mode until the pandemic struck. Having lost its focus a few years ago with poor service standards, just at the time competition was intensifying, Restaurant Group has been trying to bounce back by slimming down its core estate which includes Frankie & Benny’s and Chiquitos.”
Chancellor Rishi Sunak announced a £330bn package of government-backed loans for struggling businesses yesterday.
He also said no retail, hospitality or leisure business would pay business rates for 12 months. And he pledged to make £20bn worth of grants available for these sectors.