TGI Friday's owner delays new restaurant openings until 2025

The parent company of TGI Friday's has said it is delaying new restaurant openings until 2025 as part of a cost reduction programme.

Hostmore, which also oversees the 63rd + 1st and Fridays and Go brands, said it would save around £15m by deferring any further openings.

In April, the company launched a major programme to cut costs by £5.9m but said this would increase to £8.2m after it found new areas to make extra savings.

Menu prices were raised during the first half of the year and TGI Fridays also faced criticism after it scrapped the provision of free meals for staff working shifts of 10 hours or longer. Hostmore said team members would still receive subsidised discounts on food as well as other benefits.

The group closed the loss-making TGI Fridays restaurant at Manchester Piccadilly in May and the 53rd+1st site in Edinburgh, which it said removed a combined loss of £500,000 from its balance sheet.

Hostmore said it continued to evaluate exiting other loss-making sites and had taken steps to improve performance of 20 struggling restaurants.

Like-for-like revenue at the group for the 26 weeks ended 2 July was £93.6m, just 2% down on 2022 levels, while underlying earnings dropped from £17.8m in 2022 to £6.6m.

However, Hostmore said its like-for-like revenue between July and 24 September was 2% up.

The company has started a refinancing process with existing and potential new lenders, which is expected to conclude by the end of Q1 2024.

"The initiatives taken in the first half of 2023 have built a leaner and more focused organisation," said Hostmore chief execeutive Julie McEwan.

"As we move through the second half of our financial year, it is encouraging to see the effects of our strategic and operational actions coming through in our results.

"Notwithstanding the challenges facing the sector, the early success of our turnaround programme enables us to look to the future with confidence."