What happened?
The Restaurant Group (TRG) who owns Frankie & Benny’s and Chiquito restaurants has announced huge shifts in its profits with a pre-tax loss of £39.5m compared to £86.8m in the last year. This is mainly due to restructuring with costs of £117m.
TRG has also said there will be a shake-up within the business as changes of menu’s and raised prices turned customers away.
TRG warned there may well be job cuts and hundreds of staff have already been axed with recent closures.
It said in its result statement: “We have undergone a detailed review of the cost base and have identified opportunities to reduce costs by approximately £10m on an annual run-rate basis, delivered in 2019.
“Implementation has begun and the savings we capture in 2017 and 2018 will be re-invested in price, product and marketing to grow the business.
“The one-off cost to achieve these efficiencies is expected to be (around) £6m.
“These efficiencies will include streamlining our processes, reducing overheads, extracting further purchasing benefits from our scale and reducing the number of people we employ.
“This will involve some difficult decisions but we are confident our colleagues will embrace being part of a more efficient organisation.”
TRG further warned the Brexit vote has resulted in costs outside of their control such as the National Living Wage and Minimum wage increases, business rates, energy increases with taxes and the devalued pound increasing purchasing costs.
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