Pizza Express feels the retail pressure as earnings slide
PIZZA EXPRESS has blamed business rates, rents and rising food prices for a fall in earnings last year, saying it remains “cautious” about its prospects in the near term.
The restaurant group’s operating profit dropped 8.9 per cent in the year to December 31, falling to £94.6m. Sales inched up 0.4 per cent on a like-for-like basis in the UK and Ireland, and jumped 8.2 per cent in the company’s international division.
Pizza Express, which was bought for £900m by Chinese firm Hony Capital in 2014, has been buffeted by the same pressures affecting retailers and other casual dining groups such as Jamie’s Italian.
Jinlong Wang, group chairman and chief executive of Pizza Express, said: “The growth in international has been offset by the widely publicised sector cost headwinds in the UK, including higher food prices and wage increases as well as the rise in business rates and commercial rents.”
Mr Wang insisted that, despite the pressures, the UK’s restaurant sector would continue to grow because consumers are becoming more interested in food, and want to spend their disposable incomes on eating out.
Other large restaurant groups have been forced to seek agreement from landlords to close stores and cut rents as part of a restructuring plan known as a Company Voluntary Agreement.
In February, Jamie’s Italian confirmed it was closing 12 restaurants in a CVA. It was followed about a month later by Prezzo, which announced plans to shut 94 outlets.