Coppa Club owner: 'A squeeze on margins of this scale is unprecedented'
The restaurant group behind Coppa Club, Tavolino and Noci has warned its profit margins will be lower than expected this year following "unprecedented" cost pressures.
Various Eateries said double-digit food price inflation, "elevated" energy costs, an "extremely difficult" labour market and train strikes had dented its bottom line.
The group, which operates 17 UK hotels and restaurants, said sales this year would still meet expectations but profit margins would be "significantly lower" than expected.
Chairman Andy Bassadone said: "A squeeze on margins of this scale is unprecedented in my thirty-five years' experience in the hospitality industry.
"Even though we were anticipating a significant downturn, the actual rise in input costs has been much higher and far more sustained than the industry anticipated."
The company said it believed it was "better for its long-term strategy" not to pass on the full impact of price increases to customers.
A third Noci site is set to open in London's Old Street and Coppa Club launches are planned in Cardiff and Farnham within the next two years.
During the six months to 2 April revenue rose 16% year-on-year to £20.6m with sales in central London sites up 10% amid the return of tourists and office workers.
However, gross profit fell from £1.5m to £600,000 and losses after tax rose from £2.6m to £4.3m amid rising cost pressures.
Yishay Malkov, chief executive of Various Eateries, said: "Looking ahead, while it's difficult to say with any certainty when the pressures we, and others in our industry are under will subside, we will continue to monitor and respond to further changes in the landscape as necessary."
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