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Morning Briefing for pub, restaurant and food wervice operators

Mon 24th Apr 2023 - Prezzo to close 46 sites as part of broader strategic review
Prezzo to close 46 sites as part of broader strategic review: Prezzo, the Cain International-backed Italian dining group, has said it will close 46 lossmaking sites, putting around 810 workers at risk of redundancy. The brand said the closures come after its utility costs rocketed by more than double. The company said cuts, which are part of a broader strategic review, will affect sites where “the post- covid recovery has proved harder than we had hoped”. The closures will leave the business with 97 restaurants and about 2,000 staff. The business said the closures will impact some high street sites as its portfolio shifts more towards those “in better locations to cater to changing consumer habits” such as shopping centres, retail parks and tourist destinations. Prezzo said it will work to redeploy “as many staff internally as possible and will support others in new opportunities”. The group, which Cain bought out of administration for around £5m at the end of 2020, when it had 180 sites, said costs had leapt over the past year, with its utility bills more than doubling and double-digit wage inflation. It said it had also been impacted by soaring food inflation, which hit a 45year high last month, with Prezzo witnessing a 40% increase in the cost of spaghetti, 28% rise for pizza sauce and 15% increase in the cost of its dough balls. It said it plans to invest in continued menu development and high quality ingredients, while working hard to balance the cost-of- living crisis and increasing food costs. Dean Challenger, chief executive of Prezzo, said: “The last three years have been some of the hardest times I have ever seen for the high street and I'm extremely proud of the way our colleagues have retained Prezzo's position as an appealing, trusted, great value food and drink experience. But the reality is that the cost-of-living crisis, the changing face of the high street and soaring inflation has made it impossible to keep all our restaurants operating profitably. That is why we have made the difficult decision to close 46 sites where the post- covid recovery has proved harder than we had hoped. We will work to find suitable alternative roles in other Prezzo restaurants for all those hardworking colleagues impacted by the announcement and support those who cannot be accommodated in finding new opportunities. We believe the tough decisions we are making today will ensure Prezzo can continue serving communities with high-quality, accessible Italian-inspired meals for many more years to come.” The latest closures come two years after the group previously shut 22 restaurants and cut 216 jobs. Last month, Prezzo told Propel it continues “to monitor our estate in response to market conditions”, after recently closing four sites. Earlier this month, Prezzo said it had returned to profitability following a strong second half performance ahead of pre- pandemic levels. In its first results as Prezzo Trading, the company reported revenue of £94.9m for the year ending 2 January 2022. Overall adjusted Ebitda for the financial period was £4.2m, and total statutory loss was £22.4m. The full list of closures is sites in: Billericay, Bolton, Borehamwood, Boston, Bracknell, Brentwood, Buckhurst Hill, Buckingham, Chichester, Chingford, Colchester, Corby, Didcot, Eastbourne, Egham, Eltham, Ely, Epsom, Fleet, Glasgow – St Vincent Place, Hailsham, Harpenden, Livingston, Lyndhurst, Maidstone, Mere Green, Mill Hill, Oxford, Plymouth, Redditch, Redhill, Rugby, Shepperton, Shirley, Sidcup, St Neots, Stowmarket, Tenterden, Tunbridge Wells, Weybridge, Whitstable, Wickford, Wimborne, Winchester and Woodford Green.


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