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Cost hike leads to deeper losses at Cafe Rouge and Bella Italia owner

Higher property costs and harsh trading conditions have led to pre-tax losses deepening at the owner of Cafe Rouge and Bella Italia.
Rising rents and business rates pushed up property costs at Casual Dining Group at a time which the company described as “challenging” as lower consumer confidence levels hit spending.
The company, which also owns the Las Iguanas chain, suffered a pre-tax loss of ?60m in the year to May 28 2017, up nearly a fifth from ?52m the prior year. This was in spite of total sales rising 10pc to ?329m and being up 2.2pc on a like-for-like basis against flat figures for the wider industry.
Changes to suppliers have already been made to save costs and the company said it had worked on improving staff rotas to make sure the number of people working on shift rose and fell in line with the flow of customers.
The results come amid a bleak time for the restaurant sector, which has seen several chains forced to launch rescue plans to stay afloat. Burger chain Byron, Jamie’s Italian and Prezzo have each launched company voluntary agreements, a form of administration which has led to closures and reduced rents in some locations.
Cost hike leads to deeper losses at Cafe Rouge and Bella Italia owner

Burger chain Byron has had to close some sites and pay reduced rent on others in a bid to keep trading
Casual Dining Group chief executive Steve Richards said his expansion efforts would now focus on concession sites at airports and also through franchising deals with restaurant operators in overseas territories such as the Middle East, Ireland and South Africa.
He claimed brands relying solely on high street footfall were the ones “falling over” after being hit by the flurry of rising costs, which also include food price inflation caused primarily by the fall in the pound.
From April it will expand a delivery trial it has been running to 200 of its sites, using Deliveroo, Just Eat and Uber Eats, depending on the location.
Mr Richards said it had created a brand called Stack & Grill, which will solely serve food for delivery and be cooked by staff in kitchens in its Cafe Rouge estate.
casual dining restaurants crisis business
Elsewhere, the restaurant group is planning another invasion of consumers’ homes with the launch of a range of Bella Italia pizzas, pastas and sauces in a major supermarket in September.
Casual Dining is one of the UK's largest restaurant groups, employing more than 10,000 people across 300 locations.
Mr Richards was one of several hospitality industry bosses to sign an open letter to Chancellor Philip Hammond ahead of Tuesday’s Spring Statement warning a “root and branch” review of the business rates was needed “to avoid damaging closures and job losses”.
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