Doubts for the future of town fast food chain
RESTAURANT GROUP TO CLOSE OUTLETS AFTER STRUGGLING TIMES
THE future of Gourmet Burger Kitchen in Beverley has been thrown into doubt as the food chain announces it is to close one in five of its restaurants.
The group, which has a restaurant in the Flemingate Shopping Centre, has lined up a Company Voluntary Arrangement (CVA), as it prepares to close 17 underperforming stores.
Around 250 jobs are expected to be affected by the closures, but details of which stores will disappear have yet to be revealed.
Derrian Nadauld, managing director at Gourmet Burger Kitchen, said: “Given the challenging UK casual dining environment and over-rented UK restaurant estate, we are having to take tough, but necessary, actions to reduce our fixed cost base and restore long-term profitability.”
Gourmet Burger Kitchen was bought by South African-based Famous Brands in 2016 for £120m.
The company said earlier this month that it would take a pre-tax impairment charge of £47.2m due to the brand’s sustained under-performance.
Famous Brands has previously unveiled stinging losses at the burger chain.
Creditors will now vote on the proposed closures at a meeting on November 9. All restaurants will continue trading in the meantime.
Store closures at Gourmet Burger Kitchen would represent the latest in a long line of casual dining firms to shut restaurants this year.
Gaucho, Hummus Bros, Prezzo, Byron and Jamie’s Italian have all fallen on hard times as costs have rocketed off the back of the Brexit-hit pound, while consumer confidence has nosedived as the economy falters.
Alex Probyn, president of UK expert services at real estate adviser Altus Group, said: “There has been huge growth in the casual dining market, with restaurant numbers up 15per cent overall since 2010.
“The race for space has pushed up rents impacting on rateable values. Extra tax for business rates coupled with rising food prices and staff costs through increases in both the national and minimum wages are creating a potentially lethal cocktail as margins are squeezed.”
Gourmet Burger Kitchen operates more than 80 stores and employs 2,000 people.
At the time of its takeover in 2016, Famous Brands said that fears of a Brexit effect on the eating-out market “appear negligible”, adding that it would look to export the Gourmet Burger Kitchen brand to South Africa.