MW Eat has ‘borrowed heavily’ to fill cash flow gap

MW-Eat has lost more cash in the last year than it has made in the last five, chairman Ranjit Mathrani has told BigHospitality.

The chairman of the Chutney Mary and Masala Zone owner said it has had to borrow heavily to fill the cash flow gap, but that staffing was its biggest problem.

He said trading was at around 70% of pre-pandemic levels, and that its reliance on tourism and business lunches was taking some time to come back.

He said: “Trade is roughly in line with our predictions. In fact, I predicted that by around now we’d be at 70% of pre-pandemic levels, and that’s roughly where we are. Lunch business has suffered the most.

“Existing operators in high-rent areas of central London are now among the worst off.

“I find it odd that the UK is treated as one entity by trackers and other metrics. It’s a very mixed picture at the moment. I also believe that the media’s focus on new openings gives an unintentionally misleading impression of the current health of the industry.”

On MW-Eat’s current financial position, he said: “We are still in negotiations with some of our landlords. We haven’t paid rent in eighteen months at some of our sites. Even with some rents deferred, we’ve had to borrow heavily to fill the cash flow gap.

“Previously the business had no debt, so it’s a frustrating situation. But our biggest problem at the moment is staff. We cannot meet even the reduced demand due to staffing shortages. In an attempt to combat this, we’ve had to increase salaries at a point in time where we’re barely breaking even at some of our sites.”

Despite the challenges, Mathrani hopes to return to expansion at some point.

He added: “We’re predicting that the landscape will soon be roughly the same as it was pre-pandemic. Our big gap at the moment is Shoreditch so we’re looking there and also within areas that are slightly to the east. We will be wary about areas that rely on office workers, as nobody really knows what’s going to happen with hybrid working.”