Loungers’ performance has been consistent across its brands and locations, with no discernible change in customer habits despite the cost of living crisis, CEO Nick Collins tells MCA.
In a trading update, the all-day bar and restaurant group reported three-year like-for-like sales growth of 17% in the 24 weeks to 2 October.
“We’re delighted with how the business has traded in H1,” Collins says. “Both busineses have traded really well and performance is consistent across different geographies and types of locations.
“We haven’t seen any shift in the way the consumer is behaving. There’s no evidence of any kind of recessionary trading.”
Collins attributes outperformance to a keen price point and value for money proposition, as well as the quality of the offer. While margins have taken a hit due to inflationary pressures, price increases have been relatively modest.
“When we think about how we balance our conversion and margins, we always want to protect the customer,” he adds.
The business is on track to open 30 sites this financial year and plans to open between 32-34 in the next financial year.
There will be a “slight bias” towards the North when it comes to expansion, according to Collins.
“There’s so much potential for both brands,” he says. “We’re just building our presence [in the North]…but we want a balance of locations across the UK rather than a bias on one area.”
Collins has previously told MCA that he sees the potential for 400 Lounges and 100 Cosy Club sites across the UK.
“In our view, that number is really conservative.”
While Loungers has exposure to Greater London, it is unlikely to venture too far into the capital.
“Zones 1 and 2 are unlikely. We think we can have better returns outside those areas,” Collins adds.
The business also plans to open the first location for Brightside, its new roadside dining concept, towards the end of the financial year, followed by the second one soon after.
Collins further reports strong Christmas bookings, stating the group is optimistic for a strong festive trading period.
“When we did our final results in July, everyone was talking about whether the recession will kick in at the end of the summer,” he says. “There’s been no deterioration in volumes or spend.
“We have no idea what’s going to happen after Christmas, but we take confidence in the strength of our performance over the last six months – indeed the last 18 months.”
