A FAMILY favourite restaurant chain has delayed its plans to open new restaurants following two closures.
Hostmore, the owner of restaurant chain TGI Fridays and 63rd+1st has said that it will no longer open any new restaurants until at least 2025, after confirming a drop in earnings.
PA:Press AssociationTGI Fridays won’t be opening any new restaurants until at least 2025[/caption]
The delay in opening restaurants in new locations is expected to result in savings of around £15 million.
It comes after it shut a loss-making TGI Fridays site at Manchester Piccadilly in May.
Followed by a loss-making restaurant in Edinburgh under the 63rd+1st brand.
But Hostmore hasn’t ruled out closing more restaurants that are losing money in the future.
However, the group said that it is taking steps to improve the performance of 20 struggling sites.
In May, it was revealed that a small number of head office and supply chain workers would be affected by the cost-saving initiatives.
Hostmore reported a drop in earnings to £6.6 million over the half-year to July, more than half the £17.8 million reported at the same time last year.
It also saw adjusted like-for-like revenues dip by about 2%, but said people were spending more on average per visit and that sales of cocktails jumped over the period.
Warmer weather in June resulted in fewer visitors to its restaurants due to it having limited outdoor space and because families, which is its core demographic, were spending time outdoors and entertaining at home, the company said.
The casual dining sector has also been impacted by the rising cost of living, with some people having fewer meals out in effort to cut back spending.
Hostmore said that it upped the prices of its food and drink during the period which helped offset inflationary pressures.
But cost inflation has begun to stabilise and the group said its financial outlook was significantly stronger.
Julie McEwan, Hostmor’s chief executive, said: “The initiatives taken in the first half of 2023 have built a leaner and more focused organisation.
“Notwithstanding the challenges facing the sector, the early success of our turnaround programme enables us to look to the future with confidence.”
Restaurant chains continue to feel the pinch
The hospitality sector as a whole has been struggling to bounce back after the pandemic, only to be hit with soaring energy bills and inflation.
Some well-known retailers have shut a handful of branches, while others have disappeared from the high street for good.
In January, Byron Burger fell into administration with owners saying it would result in the loss of over 200 jobs.
Italian dining chain Prezzo revealed plans to shut 46 restaurants back in April as a result of soaring energy and food costs, putting 810 jobs at risk.
TRG, which owned Frankie & Benny’s, Chiquito and Wagamama, revealed that it would shut down around 40 sites by April 2024.
Plans will see its entire leisure estate reduce from 116 sites to between 75 to 85.
First announcing the closures back in March TRG reported widening losses last year and said some of its restaurant chains had been directly impacted by the cost of living crisis.
So far dozens closures have taken place, including Frankie & Bennys, Chiquito and Firejacks sites.
At the beginning of the month, TRG completed a deal to sell both Frankie & Bennys and Chiquito to Cafe Rouge owner The Big Table group.