Zizzi owner reports growth in sales, profits remain flat

Azzurri Group has posted an 8.5% increase in sales in the year to July.

The owner of the Zizzi and ASK restaurants revealed a growth in sales but profits remain flat as the group accounts for higher costs.

Sales grew by 8.5% to £279.8 million following the opening of new restaurants and earnings were £37 million.

The chief executive of Azzurri Group, Steve Holmes, said the year had been “very challenging from a cost perspective”.

“Today the consumer is looking for great value. So we’ve been very cautious about putting prices up and worked hard to offset a lot of those costs,” he said.

Azzurri Group has opened 15 new restaurants over the past year.

Whilst sales are on the up, increasing costs come in the form of food inflation, rising rents, increasing competition, rising minimum wage and business rates.

Commenting on the market, Holmes said: “My view is that the market fundamentals are quite strong, millennials are eating out a bit more, especially at places that provide experiences.”

“There are winners and losers. The winners are the ones that are providing interesting, relevant and different propositions.”

The tough retail market has led to the closure of many casual dining restaurants including Byron Burger and Jamie Oliver’s restaurants.

Peter Harden, the editor of Harden’s London Restaurants, said that UK restaurants are struggling amid the current competition.

“It used to be the case that good restaurants as a rule did not close. But last year has seen losses at the top end such as Marianne, landmarks such as The Gay Hussar and highly rated start-ups like Killer Tomato which should have been a success story but which came and went almost as quickly as it began,” he said.

“In 2003, the previous peak for closures, it was different: the hit to the market came from a slump in demand due to the second Gulf War, Sars and the lowest hotel occupancy rates of recent decades.”

“This time the problem is purely and simply a case of over-supply: too many restaurants chasing a level of demand that although it continues to rise is doing so only slowly.”

 

 

 

Previous articleDignity shares fall as price war hits profits
Next articleOil prices up after Saudi Arabia pledges to limit production
Avatar photo
Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.