The Voice of Spalding and South Holland
The future of Spalding’s Frankie and Benny’s is under threat after company owners announced plans to close or sell many of their restaurants.
The Restaurant Group (TRG) announced in a statement that 33 of their sites across the country would be effected after a ‘challenging trading period.’
And, although the exact locations of the sites have yet to be revealed, TRG have revealed they will focus the vast majority of the upcoming restaurant closures outside of London.
They also confirmed that any staff affected by the closures could be deployed in their other outlets.
TRG, whose Spalding restaurant is based at the Springfields outlet, outlined a number of reasons in their statement for the potential closures.
It said: “We have lost ‘value-conscious’ customers at our restaurants due to a result of significant price increases and the removal of popular value offers.
“In 2015, more ‘authentic’ menus were introduced without sufficient testing of the concept.
“This led to the removal of many popular dishes from the menus and led to a further decline in customers.
“We are now in the process of undertaking an extensive review of the company’s operating strategy.
“We intend to exit 33 under-performing sites immediately as we do not believe that these sites are capable of generating adequate returns.
“The board recognises that we are facing increasing head winds on wages, food and drink input costs, fuel inflation and a growing ‘fixed’ cost base with rent, rates and service charges under pressure.
“We will continue to be vigilant on cost and to drive efficiencies. This will be an area of focus for the new executive team.”
Debbie Hewitt, chairman of The Restaurant Group, felt the company has had to move quickly to review their operating strategy.
She said: “This has been a challenging trading period for our leisure brands, albeit with a good performance from our pubs and concessions businesses.
“The board has moved quickly to undertake a review of the operating strategy and we now have clarity on the issues facing our leisure brands, particularly Frankie & Benny’s.
“The brand remains relevant and popular and we are confident that improved performance will be achieved by being more customer-focussed and data-driven and through better operational execution.
“A new executive team is in place to lead the implementation of this first phase of the review and to apply the learnings to our other brands.
“The company is profitable, highly cash generative and has a strong balance sheet.
“Given our confidence in the current trading forecast, we are declaring an interim dividend of 6.8p per share which is unchanged from last year.”
