Hugh Osmond, the sector investor and backer of Strada and Coppa Club, has said that combination of issues including increases in minimum wages, rates and food costs, will make many mid-market units unviable.

Osmond told MCA: “The market has certainly softened. Rent reviews in London and the South East are still ridiculous though and, combined with further increases in minimum wage, rates and food costs, will make many mid-market units unviable. I am not sure this has dawned on many operators or landlords yet, but it will

“If minimum wage goes towards £10 per hour, fixed cost approaching 20% of sales will push many of the ordinary 2,500sq ft, 80-90 cover restaurants into losses, even before depreciation and the property owners are going to be left holding the baby.”

Last week, MCA revealed that the company is to trial a new concept called 31 Below on its former Strada site in Marylebone.

Osmond told MCA that 31 Below, which is set to open before Christmas, would share a few features with the company’s Coppa Club concept and that if successful could be rolled out into some of the group’s smaller Strada sites.

Osmond said: “We also have plans for at least two more Coppa Clubs in the spring/early summer and more later in the year. The larger sites are doing particularly well with huge like-for-like sales increases in their second year’s trading.”

Earlier this year, MCA revealed that Sun had placed a package of 16 Strada sites on the market.

The group, which acquired the then 43-strong Strada business for £37m in 2014, appointed Colliers to sell the sites that include restaurants in Blackheath, Cobham and Highgate.

Osmond said: “Most of the sites we are trying to sell are either sold or in negotiation, although the market has certainly softened.”

The sale of the sites would leave Sun with 17 Strada sites, including flagship locations at More London, St Katharine Docks and Royal Festival Hall.