Written by: Keith Tully
Reviewed: Tuesday 6th September, 2016
The Restaurant Group, which owns hundreds of branded eateries around the UK, is to close or sell 33 of its outlets after a review of its nationwide operating strategy.
Brands owned by the group include Frankie & Benny’s, Chiquito and Coast to Coast but profits across the organisation have been sliding in recent quarters.
Details on precisely which outlets are earmarked for sale or closure have not yet been revealed but the Restaurant Group has said that it will budget for a £59.1 million exceptional charge in relation to those disposals and 29 site asset value impairments.
In its official financial report for the half year to July 3rd 2016, the group’s own review suggests that the performance of its Frankie & Benny’s restaurant chain has become a problem.
“Frankie & Benny’s performance has suffered due to insufficient focus on value, unsuccessful menu development and poor operational execution,” it said.
“The board has moved quickly to undertake a review of the operating strategy and we now have clarity on the issues facing our leisure brands, particularly Frankie & Benny’s,” said Debbie Hewitt, the Restaurant Group’s chairman in a statement.
“The brand remains relevant and popular and we are confident that improved performance will be achieved by being more customer-focussed and data-driven, and through better operational execution,” she said.
Revenues across the Restaurant Group’s portfolio of 500 eateries increased by 3.4 per cent during the first 6 months of 2016 as compared with the same period in 2015.
However, operating profits and like-for-like sales across the group both fell notably on that same comparative basis.
It’s been announced that a new executive team has been put in place to implement the strategy aimed at improving the group’s performance and overseeing the changes geared towards boosting Frankie & Benny’s popularity around the country.
“Action has been taken to ensure that the company has an executive leadership team in place with the right skill-set to drive the business forward,” the group’s chairman said.
Decisions made in relation to the planned closures or sales of underperforming outlets are to be actioned immediately on the basis of the board’s belief that the relevant restaurants are not “capable of generating adequate returns”.