The Restaurant Group (formerly known as City Centre Restaurants) is one of the UK’s largest and most respected independent restaurant chains. The group claims a leading position in the leisure park and concessions sector and serves around 20 million meals a year.
After rationalising and refocusing its line-up, the group operated five key brands (Frankie and Benny’s, Chiquito, Garfunkel’s, Caffé Uno and Est Est Est) in leisure parks, high streets and concessions until 2005.
However, in 2005 it sold the under-performing Est Est Est to the Living Ventures group, in which it acquired a 40% stake. It went on to buy the Blubeckers and Edwinns restaurant chains, which operate in semi-rural areas within the M25. In November it sold Caffé Uno to Paramount Restaurants to complete its exit from the highly-competitive high street.
The group’s Concession Connection operates in airports and railway stations. It includes three franchised brands (an Eat sandwich bar and two O’Neills pubs) along with a number of concepts (the Bite sandwich bar, Pip juice bar and Est Presso coffee bar) which it developed for the British Airports Authority.
Turnover: £287.3m (2005: £255.4m)
Pre-tax profit: £29.5m (2005: £24.4m)
Turnover: £130.8m (2004: £118m)
Pre-tax profit: £11.6m (2004: £9.6m)
Financial year end: 1 January 2006
Half year end: 30 June 2005
Total number of branded restaurants: 237
The Restaurant Group divides its operations into leisure parks and concessions. Below are figures for the 12 months to 1 January 2006.
Number of restaurants: 194
Total turnover: £189m (2005: £151m)
Total profit: £40m (2005: £31m)
Frankie & Benny's: 114 restaurants (including three in Spain)
Chiquito: 34 restaurants
Blubeckers: 17 restaurants
Garfunkel's: 29 restaurants
Number of restaurants: 43, mostly in airports
Turnover: £59.8m (2005: £48.9m)
Profit: £8.9m (2005: £7m)
"We ended 2005 in a form rather different from that in which we started the year. Activity on the corporate front has resulted in our business having a focus geared largely towards out of town leisure and concession locations. Furthermore, our remaining high street restaurants are located mainly in sites which benefit from high footfalls of tourists, shoppers and 8 of 30 customers pursuing leisure-related activities such as the theatre. We believe that this more focused composition enables the Group to deliver higher quality profits and cashflows.
I am pleased to report that 2006 has also started well with like-for-like sales for the first nine weeks 4% ahead. We plan to open 25-30 new restaurants this year, we will continue to focus on ways to further improve profitability and we will continue to invest in our people and systems."
Source: preliminary results statement, March 2006
TRG has experimented with a wide diversity of restaurant concepts since the 1980s. Brands that have entered and left its portfolio since 1995 include the more familiar Deep Pan Pizza, Nachos, OK Diner and Wok Wok chains, along with such names as Fraternity House, Filling Station, Adams Ribs, Jaxx, Zack, Jimmy Max, Rick Shaw’s, Johnny Rockets and Big Uns.
But by 2001, when chairman Alan Jackson came on board, the group was unfocused and in poor financial shape. It quickly restored its fortunes by concentrating on fewer brands and switching focus from the competitive high street to out-of-town leisure parks, cinema multiplexes and transport concessions. It then went on to improve the performance of its high street restaurants, with the exception of Est Est Est, and returned to the acquisition trail.
Thwarted in a friendly move to buy the Ask pizza chain, TRG went on to buy a stake in Living Ventures (which Jackson also chairs) in 2004 followed by Blubeckers in 2005. Living Ventures bought TRG's flagging Est Est Est high-street chain as part of the deal and TRG completed its exit from the high street in 2005 with the sale of the Caffe Uno brand.
TRG planned to double the Blubeckers chain to 24 outlets by the end of 2005.
TRG was the only restaurant group to appear in the top 10 table for pubs and restaurants in the peer-reviewed Britain's Most Admired Companies listings in 2004. It was voted seventh in the sector table, and 107th in the pan-industry top 220.