Restaurant discounts are hurting net margins, warns Clapham House

Restaurant group Clapham House said the UK eating out sector continued to see widespread discounting and promotional activity hitting net margins.

In a trading update, the owner and operator of Gourmet Burger Kitchen (GBK), the Real Greek and Tootsies restaurant chains said while revenue was up for the first six months of its financial year, trading conditions remain tough.

Revenue across the group is expected to be around 2% higher in the first half of the financial year to March 2010, despite the continued difficult trading conditions experienced by its Tootsies restaurant chain.

Clapham House opened the 50th GBK outlet in London’s Clink Street this week but said it remains cautious about future openings.

Chairman David Page said: “Given the economic outlook, we continue to be cautious in terms of future openings although we are looking to identify similarly strong locations on attractive terms.”

He added: “Our franchise partners have opened two new GBK restaurants in the Middle East in the first half, taking the total number of GBK restaurants overseas to 13.

“In addition, in July we signed a new franchise partner for the development of GBK in Greece, where the first restaurant is expected to open before the end of the year.”  

 
Clapham House Group remains positive despite profit fall >>

Clapham House Group in talks to sell Tootsies >>

Casual dining chain Clapham House doubles pre-tax profits >>

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By Kerstin Kühn

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