The Restaurant Group sees sharp drop in sales
The Restaurant Group (TRG) has acknowledged that it needs to make "substantial price and proposition changes" as it saw a 5.9% drop in Q4 like-for-like sales.
The company, which operates brands including Frankie & Benny's, Chiquito and Garfunkel's, was providing an update on its results for the 53 weeks ended 1 January 2017.
Total turnover for the period was up 3.7% against the prior year, to £710.7m, although like-for-like sales were down 3.9%. It closed 37 sites and opened 24 over the period.
It blamed "underperformance across our leisure brands" for the sharp dip in Q4 like-for-likes.
Describing recent trade as "challenging", TRG said that it realised it needed to make substantial price and proposition changes, having already started price and menu trials across Frankie & Benny's.
Among the measures it will take in its programme of transformation are a proposition improvement to make sure the business is competitive on value, improved operating processes to deliver attentive and engaging service, and a leaner, faster and more focused business.
"We expect the trading performance of the business in the first half of 2017 to remain difficult, but anticipate momentum improving towards the end of this transitional year as our initiatives start to take effect" the company said in a statement.
It also warned that it would face external cost pressures from increases in the National Living Wage, the National Minimum Wage, the Apprenticeship Levy, the revaluation of business rates, higher energy taxes and increased purchasing costs due to the combined effects of a devalued pound, and commodity inflation.
Chief executive Andy McCue, who replaced Danny Breithaupt last year, said: "Since joining the group in September, I have been impressed by my colleagues' passion for our brands, and commitment to our customers through what has been a very difficult trading period. I'd like to thank them all for their positive contribution, and for their continuing support, as we make the necessary changes to offer better value and satisfaction to our customers."
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