A little more than precarious

There’s ketchup in the streets as the UK’S wildly overtraded casual dining sector charges flat-out into the closing stages of a particularly gory zombie apocalypse script.

Famous Brands joined the party as recently as September 2016 when it decided to treat itself to a burger and ended up paying £120m for Gourmet Burger Kitchen (GBK), in what has turned out to be one of the less auspicious pieces of timing in the company’s long and distinguished history.

GBK dishes up a tidy product at a decent price, but so does everybody else, and the high streets of the nation of shopkeepers are positively groaning with options for the hungry consumer. Add to the mix a toxic cocktail of skyhigh rents, sharply increasing business rates, rising food prices and increased staff costs before you even start to consider the impact of Brexit on these establishments’ largely young, European workers, and it’s no surprise that the financial situation is starting to look a little more than precarious.

In the burger sector alone you have Byron closing 20 of its 67 sites and the Handmade Burger Co closing nine out of 20, while Jamie’s Italian and Prezzo have both entered into rescue deals with their creditors that will involve around a third of their outlets closing.

GBK’S company voluntary arrangement is believed to involve the closure of around 17 of its 80 stores, and the restructuring of the remaining property portfolio at more realistic levels in order to give the chain a chance of survival. It’s not the most popular procedure, but it may well be the only hope.