Revenues fall at Restaurant Group as new boss plots transition

RESTAURANT Group has reported another period of declining sales as the company pushes ahead with plans to revitalise the business.

The parent company of high streets brands such as Frankie & Benny’s and Chiquito said sales in the 20 weeks to May 21 had fallen 1.8pc on a like-forlike basis, despite good weather driving more people to its pubs.

New chief executive Andy Mccue, who joined Restaurant Group from bookmaker Paddy Power in September, has made price cuts and simplified menus as he seeks to lure customers back to the struggling chains.

Despite the dropping sales, the business said it was on track to deliver profits for the full year in line with expectations. Its shares rose 10.5pc to 350.6p yesterday, making it the top gainer in the mid-cap FTSE 250 index.

The news will come as a relief to investors in the company, which is beginning to show signs of recovery after swinging to a loss last year. Sales were expected to be as much as 5pc lower this year. The company’s chairman Debbie Hewitt told investors at the company’s annual meeting yesterday that a series of “own goals”, including removing popular dishes from menus, was responsible for the company’s poor performance in recent years.

Mr Mccue’s strategy has focused on closing underperforming stores and increasing the company’s presence in UK airports since the beginning of the year. Its airport concessions benefited from an increase in passenger numbers, it said yesterday, although this is expected to “moderate” throughout the rest of the year. Its core leisure business has also benefited from more people going to cinemas.

It said it would continue to “address the competitiveness” of the business, but added: “The implementation of our strategy is progressing well as we make the required investments in price, marketing and our offer.”

Mike van Dulken, of Accendo Markets, said the trading update would “put investors at ease regarding full year profits, management being able to reiterate guidance despite 2017 being a transitional year requiring investment and with a new chief at the helm”.