Fulham Shore is scaling back its openings targets next year as it anticipates a dip in trade in last quarter of the financial year.
The Franco Manca operator said it would open a revised 5-10 sites next year, as consumer confidence is rocked by unstable political and economic circumstances, and trade is impacted by train and tube disruption.
The group said it continues to secure desirable sites at favourable rents, supported by high vacancy rates and lower rents than at the peak levels seen in 2019.
It is in various stages of negotiations for eight proposed new restaurant leases due to open in the next financial year.
Group turnover during the first two months of the second half of the financial year was well ahead of the comparable periods in 2019 and 2021, by 46% and 12% respectively.
However costs continue to rise against the backdrop of subdued early and mid-week trading.
“During the second half of the financial year so far our restaurants and our customers have been buffeted by unstable political and economic circumstances which in turn have impacted consumer confidence,” David Page wrote in his chairman’s statement.
“This is in addition to the restrictions caused by intermittent train and tube disruption. As a result, office occupancy in our urban locations has again fallen back to well below 2019 levels.”
Fulham Share said office occupancy figures have stagnated, meaning its weekday trade its office centric locations has been particularly negatively impacted – and exacerbated by a number of mid-week tube or rail strikes.
Continued transport disruption on the run-up to Christmas will “inevitably continue to cause more interruptions to our normal trading patterns”, Page said.
“We prudently assume that these transportation strikes are likely to be equally as disruptive in the coming months. In addition, whilst we hope to see some recovery, we must assume that the cost of living impacts on consumers will continue to influence particularly early and mid-week trading and office centric locations.”
As a result, the group is conducting a number of initiatives to boost trade early in the week and at lunchtime with early signs of improving sales.
But due to these challenges, the company expects that trade in the final quarter of the current financial year is likely to be behind any of the group’s first three quarters.
“Although, the group expects to deliver its 18th new opening in spring 2023, given the pressures outlined above, the board believes that it would be imprudent to aim to maintain this opening frequency in the next financial year.
“Until the economic situation for our customers and the country improves and stability returns, the group will look to target between 5 to 10 new openings for the next financial year and will continue to fund the opening programme largely out of operating cash flow.”
