Yahoo Finance Pub and restaurant business ‘getting worse by the day’
One of Britain’s biggest pub and restaurant owners has warned that sales are “getting worse by the day” as several of its peers said they were taking a serious hit from coronavirus.
The Restaurant Group (TRG), which owns Wagamama and Frankie & Benny’s, said like-for-like sales had fallen 12.5% in the last two weeks.
Sites remain open, although other restaurants and cafes, including McDonalds and Starbucks, have said they will close seating areas.
It came alongside warnings from Marston’s, which runs 1,400 pubs across the country, and Mitchells & Butlers, the owner of Toby Carvery and All Bar One.
TRG said in a statement to investors: “In particular, our concessions business has been significantly impacted, with like-for-like sales down 21.7% and getting worse by the day given international travel bans.”
It now expects like-for-like sales to drop by 45% in the first half of 2020 and is building a 68% sales drop and a 10-week shutdown into its forecasts for the leisure, pubs and Wagamama business.
Marston’s warned that while it was not yet feeling the brunt of the coronavirus outbreak, Government advice to avoid eating or drinking out was bound to “significantly lower sales in the coming weeks”.
Shareholders are now likely to miss out on the interim dividend, which was due to be recommended in May, which will save Marston’s £20 million.
Mitchells & Butlers said that “recent trading has been severely impacted” by the outbreak.
It also warned that Government advice to stay away from public eateries “is now expected to lead to a further significant downturn in sales”.
However, the pubs and restaurants groups welcomed Chancellor Rishi Sunak’s proposals on Tuesday afternoon to slash business rates and give loans to firms that need firming up.
Marston’s said they represented “good progress towards the very significant commitment which the hospitality sector requires from the Government”.
Mitchells & Butlers said it was “encouraged”, and The Restaurant Group has already built the rates relief into its forecasts for the next year.
Restaurant and bar group Loungers said it saw sales rise in the two weeks to March 15, but has seen a “fall-off in sales” after the Government told potential customers to stay at home.
It said it expects “significantly lower sales” in coming weeks and foresees the “partial or complete temporary closure” of its sites as a potential scenario.
Elsewhere, Revolution Bars said it expects to see a “material deterioration” in trading for the current year after the outbreak drove a decline in sales in recent days.
Shares in the business tumbled almost a third after it said it expects the current trading environment to be very challenging for the foreseeable future.
Meanwhile, cafe chain Starbucks said it is “closing select stores” in the UK in locations where people tend to gather in large groups, such as cinemas.
It added that it will temporarily move the rest of its sites to a “to go” only model, starting from Thursday.
