Wildwood restaurant owner Tasty comments on ‘disappointing’ festive sales
- However, the group was boosted by a £2.5 million insurance payout
The owner of restaurants in Wildwood said sales were ‘disappointing’ in the run-up to Christmas after the restaurant underwent a restructuring in the hope of reviving its fortunes.
Hospitality group Lekker, which also owns dim sum chain Dim T, said it continues to maintain a “cautious view” as the casual dining sector faces “several adverse factors”.
These include food cost inflation and declining consumer confidence and discretionary spending, as well as changes to national insurance and living wages unveiled in the government’s October budget.
Taste closed 14 locations and laid off about 160 people during the first six months of 2024 as part of a restructuring aimed at reviving profitability.
As a result, sales fell 12 percent to £19.1 million, although it recovered to a pre-tax profit of £13.4 million after a loss of £6.2 million in the same period last year.
With the restructuring plan, Lekker hopes to save around £600,000 a year at its head office and improve underlying pre-nasties profits by £2.1 million until 2025.
Festive trading: Wildwood restaurant chain owner Lekker reported sales in the weeks leading up to Christmas were ‘disappointing’
In addition, the group expects to generate £33.4 million in revenue, generate £1.3 million in cash and return to a profit of £1.2 million this financial year.
Tasty too it had received a settlement from its insurer worth £2.5 million, or about £1.5 million after creditor and legal costs.
The settlement related to a claim for losses arising from a breach of an insurance contract in 2020, when hospitality operators faced severe trading restrictions due to the Covid-19 pandemic.
Many insurers refused to pay out for business interruption losses caused by the pandemic until a 2023 Supreme Court ruling ruled in favor of some companies, including Pizza Express, on the issue.
Budgetary measures affect the catering industry
In the Budget, Chancellor Rachel Reeves announced that National Insurance rates for employers would rise from April from the current levy of 13.8 per cent on wages above £9,100 to 15 per cent on salaries above £5,000.
The National Living Wage will also rise by 77p to £12.21 per hour, while the business rates relief for hospitality will be reduced from 75 per cent to 40 per cent, up to a cap of £110,000 per business.
Some major hospitality companies such as Whitbread and JD Wetherspoon have warned that these measures will increase their annual costs by tens of millions of pounds.
Other companies have said they will have to raise prices, cut jobs, scale back investments or close locations.
DIY INVESTMENT PLATFORMS
A. J. Bell
A. J. Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
interactive investor
interactive investor
Invest for a fixed amount from € 4.99 per month
Sax
Sax
Get £200 back in trading fees
Trade 212
Trade 212
Free trading and no account fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence.