Chez Gérard cutting costs to customers

Groupe Chez Gérard is cutting the cost of dining at its restaurants as it tries to recover from the 81% fall in pre-tax profits it suffered in the second half of last year.

Executive chairman Neville Abraham said last week that the detailed review of the group's restaurants he announced in March remained a "work in progress". He added: "We have analysed the customer experience from start to finish in every single restaurant."

Actions taken so far included changing prices and items on the menus and wine list. "We're reducing prices at the entry point," Abraham said. "We're not taking a dish and slashing the price. I'm saying I want a starter at £3.50 - what can I provide that would be exciting and pleasing to the customer at £3.50? Therefore we will be a lot more competitive."

Wines by the glass will now be sold in 125ml and 175ml sizes, rather than 175ml and 250ml. "That means our entry point is £1.80 per glass rather than £2.50," Abraham said.

He claimed that the initial reaction from customers was good. "Average spend is not going down," he said. "All that has happened is people are getting more for their money."

Other issues being addressed as a result of the review included service, cleanliness, maintenance - even the quality of the coffee.

Chez Gérard said that sales were up by 5% to £15.3m in the 21 weeks to 26 May, compared with the same period last year.

Operating profit was up by 13% to £4.4m, and pre-tax profit up to £410,000, against just £15,000 last year. Bank debt had been cut by 23% to £8m and central costs by 32% to £2.3m.

Abraham added: "We will know we are winning when the number of customers we serve begins to start rising." But he said that the picture at the moment remained "patchy".

by David Shrimpton