The Restaurant Group (TRG) chief executive Andy Hornby has said chain restaurants will never fully recover to their ubiquity pre-pandemic.
In an interview with The Telegraph, Hornby insisted mid-market restaurants will remain on high streets despite fears caused by the cost of living crisis – but that the casual dining industry will never be “quite as big as it was.”
He argued that “good performing, well-run food and drink operators do have a good future in this country.”
While Wagamama is holding up well, Frankie & Benny’s has suffered disproportionately because its typical customers are families hit hard by the cost of living crisis, according to Hornby.
He further told The Telegraph TRG’s pub business is trading particularly well, despite recent speculation the group may be weighing a potential sale of part of its estate, such as its Brunning & Price pubs in the Northwest.
The group has confirmed it will offload 35 sites from its Leisure division, including Frankie & Benny’s and Chiquito.
“What has actually happened is demand has held up better than people thought, but the cost inflation pressures have hurt people’s margins. It’s all cash flow issues, and those for many operators won’t go away.”
“I have got huge sympathy for a lot of very hard-working people who set up businesses [based on] one set of operating margins, and the inflationary pressures that have come through is just so different than what it was.”
“People have cut back on their spend, but not as far as you might [expect].”
“If you’re in a Wagamama and there’s six of you together, you might now choose to only share two or three starters. If you are in our pubs business, which is trading particularly well, you may have one less extra drink, or you might share a sweet dessert. It’s very subtle.”
Hornby also reported signs that customer confidence is beginning to improve as inflation pulls back.
His comments come as TRG outlined a strategic plan last week, focusing on expanding Wagamama.
