Tortilla plots IPO as it looks to win wrap battle

It might not seem like the most opportune moment to list a restaurant chain on the stock market given a mounting cost of living crisis, staffing shortages and as we head into an uncertain winter.

So, it is a show of confidence from Mexican fast food concept Tortilla to press ahead with its IPO plans regardless.

“It has heavyweight backing in former Wagamama CEO Emma Woods who has joined as chair. Emulating what Wagamama has achieved in Asian dining with its Tex-Mex offering would be a laudable ambition for Tortilla,” says AJ Bell’s Russ Mould.

“As a relatively new brand, the company was agile enough to respond to the challenges posed by Covid-19. Shifting its focus to delivery and operating across smaller sites and using so-called cloud kitchens which only produce food to send to people’s homes.

“The good news for Tortilla is that thanks to the pandemic there are plenty of vacant units around with affordable rents which it can use to expand.

“However, selling burritos and fajitas is hardly a ground-breaking concept and there are plenty of lookalikes in the UK. Tortilla will have to work hard to win that wrap battle.

“Also, Tex-Mex street food seemed to fit neatly with an on-the-go consumer making their way to or from work and with footfall in city centres still below pre-pandemic levels this could be a continuing headwind for Tortilla.

“It must also deal with the challenges facing the whole hospitality sector, like the difficulty in attracting staff, supply chain issues and growing pressures on consumer spending.”