This week saw shares at The Restaurant Group fall 7% on the back of a note from UBS, which said Frankie & Benny’s new menu was still 22% more expensive than branded pub chains despite cutting prices.

MCA’s director of insight, Steve Gotham, says the data from MCA’s authoritative Menu Tracker reveals a strong case that the extent of analysts’ criticism of TRG has been excessive and unfair:

This week saw shares at the Restaurant Group fall 7% on the back of a note from UBS, which said Frankie & Benny’s new menu was still 22% more expensive than branded pub chains despite cutting prices.

MCA’s director of insight, Steve Gotham, says the data from MCA’s authoritative Menu Tracker reveals a strong case that the extent of analysts’ criticism of TRG has been excessive and unfair:

While it might be claimed that in recent years a greater variety of operators have followed Frankie & Benny’s lead in targeting leisure and retail parks, including several pub restaurants, it is still the case that the more valid comparative peer group for Frankie’s is other Italian-oriented chains rather than branded pubs.

The leading branded pub operator, by some margin, is JD Wetherspoon, but this is heavily skewed towards high street locations that do not directly compete with Frankie & Benny’s – either location-wise or in terms of customer profile. JDW and other high street pub brands do not directly target families as their core customer audience. Moreover, branded pubs typically compete on a price-led value ticket, whereas quality-led credentials are much more to the fore at chain restaurants and a price premium is both justified and to be expected. Therefore, the key competitive set for Frankie & Benny’s includes the likes of Bella Italia, PizzaExpress and Prezzo.

It is interesting to take a look at the very latest research from our Menu Tracker, based on current prices within the London region. Albeit on a basket of just seven lines (and excluding any promotional discounts), this shows Frankie & Benny’s is alone in bringing prices down. It also reveals how, as a result, it now emerges as the least expensive operator within this peer group.

This is a more meaningful comparison – and what is more, this is being picked up upon by customers – as our Eating Out Panel KPI ratings show positive gains in Q1 2017 vs a year ago for Frankie & Benny’s regarding its perceived value for money and availability of low prices. The business is also being rated more highly in terms of family friendliness – unlike key rivals.

This morning’s update from TRG shows the company still has a long way to go in its turnaround strategy for the leisure business but the management has recognised the need to improve Frankie & Benny’s price competitiveness and reinvigorate the brand’s appeal to families. Our data shows that it has responded and customers have noticed improvements.

“The emerging and frustrating reality for the management, however, is that the timescale within which this investment yields an improving profit outcome is likely to be delayed by the combination of increasing cost pressures and a tightening consumer economy.

For more information about the Menu Tracker and other MCA insight pieces, please contact sophie.barber@mca-insight.com

 

BrandSeasonCalamariBruschettaMargherita PizzaLasagneIce Cream CheesecakeTotalTotal % ChangeRanking

PizzaExpress

SS 2016

£6.40

£5.55

£9.10

£11.50

£4.00

£5.85

£42.40

 

1

 

SS 2017

£6.75

£5.80

£9.30

£12.15

£4.00

£6.25

£44.25

4.4%

1

Zizzi

SS 2016

£6.35

£5.35

£7.95

£10.50

£4.65

£5.95

£40.75

 

2

 

SS 2017

£6.75

£5.85

£8.45

£11.25

£4.95

£5.95

£43.20

6.0%

2

ASK Italian

SS 2016

£5.95

£5.25

£7.95

£10.85

£4.25

£5.95

£40.20

 

4

 

SS 2017

£6.95

£5.50

£8.25

£10.95

£4.50

£5.95

£42.10

4.7%

3

Bella Italia

SS 2016

£6.45

£5.25

£7.95

£10.25

£2.45

£5.95

£38.30

 

6

 

SS 2017

£6.99

£5.49

£8.99

£11.99

£2.49

£5.99

£41.94

9.5%

4

Prezzo

SS 2016

£6.29

£5.29

£7.99

£10.29

£4.39

£4.49

£38.74

 

5

 

SS 2017

£6.60

£4.90

£8.30

£10.90

£4.00

£5.99

£40.69

5.0%

5

Frankie & Benny’s

SS 2016

£6.45

£4.95

£8.95

£9.95

£4.45

£5.95

£40.70

 

3

 

SS 2017

£6.45

£4.15

£8.25

£9.75

£4.75

£5.95

£39.30

-3.4%

6

*SS refers to Spring-Summer