Chained restaurants grew through last recession

Sales at chained full-service restaurants grew each year during the last recession (whilst independents took 3 years to return to 2007 sales levels) and have significantly outperformed independents since then

Sales per chained site recorded new high in 2019

Sales per chained site grew every year until 2016 and, following site closures during 2017-2019 due to overcapacity, have again returned to growth in 2019. Additionally, chained sites earn double that of an independent site

International re-openings at 80% of 2019 levels

Within two weeks of reopening, restaurant sales returned to 80% of 2019 levels in both Germany and Australia. Ireland reached 80% of 2019 levels within a few days of re-opening, whilst the UK has reached 70% of 2019 levels since re-opening on 4th July

Recoveries have continued in the UK, Germany and Ireland, with all industries now consistently out-performing 2019 levels. Australia’s recovery, however, has been affected by re-imposed lockdown measures

The Restaurant Group forecast to somewhat recover by FY21

Updated broker consensus predicts a 38% reduction in forecast FY21 revenue against previous estimates. Decrease tracks with corporate broker Goodbody & Company’s assumption that 38% of The Restaurant Group’s sites will remain closed post Covid-19. Valuation has declined dramatically over the last four months

Cost analysis within the sector

Site costs contribute c.80% of sales and central costs c. 8% (average of £100,000 per site across sample restaurant group). Labour constitutes the largest site expense (average of c.31% sales), closely followed by property and other (c.27%) and food & drink (24%)