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Restaurant Group set to trial delivery-only brand as it returns to profit

A new delivery-only brand is set to be trialled by Frankie & Benny’s owner Restaurant Group after the company returned to profitability in spite of weak sales.
Chief executive Andy McCue is preparing to roll out a gourmet burger concept with a menu that will only be available via delivery. The food will be cooked by kitchens at sites the company already owns and will be available in a handful of locations at first before being expanded if the trial is successful.
The company, which also owns Mexican eatery Chiquito and Garfunkel’s, is trying to grab a larger share of the delivered-food market given tough trading conditions in the restaurant sector. It now has 130 sites served by Deliveroo, up from 37 at the start of 2017, and is running trials with Uber Eats and Just Eat.
The move comes as the company returned to profitability in 2017 despite a 4.4pc fall in sales to ?679m. Pre-tax profits hit ?43.5m compared to a ?49.3m loss the prior year. Earnings were helped by the fact large one-off costs linked to onerous leases and impairments in 2016 were not repeated.
Restaurant Group share price
Investors reacted positively to the results, sending the shares up more than 13pc to 269p and helping to reverse the decline in the company’s share price, which had fallen more than a quarter in the past year.
Mr McCue said he had expected his company’s sales to have been under pressure in 2017 due to the decision to cut menu prices at Frankie & Benny’s, its largest brand at 259 sites.
He added the company had also invested in a mobile app which would allow customers to order and pay on their devices, helping “remove customer pain points” and improve service.
“Customers want to order quickly and pay quickly too because people have less time and want to look for the convenient option,” he said. “We have to make the experience in our restaurants as slick as possible.”
Restaurant Group set to trial delivery-only brand as it returns to profit

The restaurant sector is facing difficult conditions because of rising costs, prompting several chains including Jamie's Italian to launch rescue plans

Credit:
Chris J Ratcliffe/Getty Images Europe
Elsewhere, Mr McCue said he wanted to ramp up the company’s pubs business as well as its concessions division, which includes sites at airports.
An increasing number of brands are turning to transport hubs in a bid to protect themselves from the tough conditions on the high street which have led to several chains launching rescue plans in order to keep trading. Jamie’s Italian, which had to close 12 high street sites, is looking at airports as a potential avenue for new openings.
Restaurant Group will open about 10 concession sites this year and between five and 10 pubs at a cost of between ?24m and ?30m. It plans to open more in 2019.
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