Concession recovery offsetting food and drink inflation for the Restaurant Group
The Restaurant Group has said the accelerated recovery of its concessions business is offsetting the impact of food and drink inflation.
In a trading update today for the group's trading performance for the 19 weeks ending 15 May 2022, the group said it expected levels of food and drink inflation to be 9%-10% this financial year, against previous guidance of at least 5% outlined in the group's full-year results in March.
"TRG will continue to work with our supply chain partners to mitigate some of this increased impact, but this remains a volatile inflationary market," the report said.
Like-for-like concessions sales were running at a decline of 11% in the last six weeks, however management said it expected to have the entire 41-strong estate trading by July and for total sales from this business to be at least £100m for the year.
The Restaurant Group said it was making good progress on its new site pipeline for its Wagamama and pubs segments, with at least eight Wagamama restaurants and three delivery kitchens, as well as three new pubs, expected to open this year.
"The continued strength of trading of these businesses has reinforced our belief in their long-term roll-out potential," the update said.
The Restaurant Group also reported cash headroom in excess of £220m and around a £6m reduction in net debt since the year-end.
The Restaurant Group operates approximately 400 restaurants and pub restaurants throughout the UK under brands including Wagamama, Frankie & Benny's and Brunning & Price. It also operates a multi-brand concessions business which trades principally in UK airports. In addition, the Wagamama business has a 20% stake in a joint venture operating five Wagamama restaurants in the US and more than 50 franchise restaurants.
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