TRG: recession has cathartic effect
The recession will have a "cathartic" effect on the eating out sector, The Restaurant Group (TRG) has claimed as it reported a "resilient" 2009.
Overall TRG, which has 367 sites plus 50 concession sites mainly at airports, saw revenues rise 5% to £436m with adjusted profit up 2% to £50m.
Adjusted Earnings Before Interest Tax Depreciation and Amoritisation rose 3% to £80m and net debt reduced by £12.2m to £66.7m.
TRG, which operates the Brunning & Price pub estate, served up 35m meals across its estate over the year. It also reported that like-for-like sales for the nine weeks to February were 1% up on last year with revenues up 6%.
Chief executive Andrew Page said he felt the recession would have a "cathartic" effect on the eating out sector.
"The reasons for this are two-fold — firstly, some operators will withdraw or significantly downscale their plans and secondly, it is likely, for some time, to deter new entrants.
"Combined, these factors should act as a brake on restaurant supply and the positive impact of this is likely to be felt for some time."
Page said TRG had steered clear of the deep discounting offers, which have become commonplace over the past year.
"Buy one get one free promotions have become commonplace and continue to be used frequently," he said.
"However, TRG has taken a different approach — eschewing deep discounting, our focus has been directed very much towards our customers, concentrating on value, range of choice across price points, service and standards."
Pub performance
TRG's Leisure division, which includes Frankie & Benny's, Chiquito, Garfunkel's and Pub restaurants performed solidly delivering a 7.5% growth in revenues and a modest improvement in profit.
Its pub restaurants had a "good year" particularly those based in the North West of England but trading at sites in the South East was more variable.
TRG said its programme to convert all its 42 pub restaurants to the Brunning & Price style of operation will continue in the coming year. "The results of these changes have been very encouraging with significant improvements in trading being secured," it said.
"By the end of 2010 we will have substantially concluded this programme and we are also looking forward to adding some additional Pub restaurants during the year.
"Currently, we expect to open between two and three new pub restaurants in 2010 and, as we have previously indicated, we believe that further opportunities to accelerate the growth of our Pub restaurant business will arise in the future."
