Restaurant Group posts fall in sales after '˜extreme' weather and World Cup

Like-for-like sales were down 3.7% in the six months to July 1, with total revenue falling 2.1% to £326.1 million.

The firm - which also owns Garfunkel’s, Joe’s Kitchen and Chiquito - saw adjusted pre-tax profit slide from £25.5 million to £20.1 million, while on a statutory basis it fell from £12.6 million to £11.7 million. The Restaurant Group said the decline in sales reflected investment in price cuts, as well as adverse weather and the World Cup, in which England performed better than expected by reaching the semi-finals.

The group warned earlier this year that sales had been chilled by the wintry weather in the first quarter, and the heatwave also affected sales. The company also booked an £8.4 million exceptional charge linked to onerous lease provisions. However, the firm said that recent trading has been “encouraging”, with like-for-like sales up 2.4% for the six-week period since the end of the World Cup.

Chief executive Andy McCue is overseeing a turnaround at the Restaurant Group, which has seen a revamp of pricing, food quality and marketing, as well as restaurant closures.

Mr McCue commented: “Over the last six months we have delivered against our strategy, creating a more competitive and balanced business, more closely aligned to the growth segments of our market.

“The turnaround of our leisure division continues to plan and shows further progress.

“This was despite the headwinds facing the sector as a whole and the adverse effects of extreme weather and the World Cup. Meanwhile our pubs and concessions businesses have traded strongly, with both businesses expected to deliver significant total sales growth this year.

“Our recent acquisition of food and Fuel Ltd will further accelerate our growth at the premium end of the pub market.

“We remain focused on developing our offering to meet consumers’ evolving demands and behaviours.

“Over the last six months we have rolled out delivery and ‘Click-and-Collect’ across most of our leisure estate and successfully trialled two delivery-only brands, ‘Burger Burger’ and ‘Kick-Ass Burrito’, both of which have been well received.

“Following a positive like-for-like sales performance in recent weeks, we remain on track to deliver an adjusted PBT outcome broadly in line with current market expectations for the full year.”

The results come at an increasingly challenging time for the eating-out sector as it continues to suffer from a slowdown in consumer spending.

Soaring costs linked to the Brexit-hit pound, the resultant collapse in consumer confidence and rising business rates have combined to hammer the sector, with more pain forecast.