PizzaExpress insists the longer term growth fundamentals of the UK restaurant market remain “compelling” despite conceding that current conditions have put a dent in its earnings.
The high street casual dining chain this morning described its performance in the UK and Ireland as “resilient” as it revealed that like-for-like sales in 2017 grew just 0.4% against “challenging conditions”.
Group turnover increased 6.3% to £534.2m on the pro-forma prior year period and 1.4% on a like-for-like basis. International sales were up 8% on a like-for-like basis, while it opened a record 27 stores in equity markets and a further seven in franchise territories.
In the UK it opened 13 new restaurants last year and refurbished a further 25.
Bosses at the chain said growth in its international markets was offset by industry-wide cost pressures in the UK, leading to a 9% decrease in EBITDA to £94.6m.
Jinlong Wang, group chairman and CEO of PizzaExpress, commented: “We are delighted that this year saw UK & Ireland like-for-like sales return to growth, while our International business delivered an exceptional performance with like-for-like sales increasing by 8.2%. As expected, the growth in International has been offset by the widely publicised sector cost headwinds in the UK, including higher food prices and wage increases as well as the rise in business rates and commercial rents.”
PizzaExpress launched a partnership with Welcome Break last year to open sites at service stations, while its modernisation programme has seen its High Holborn restaurant converted to a new-look ‘PizzaExpress Live’ site, with more to follow.
Despite considerable recent negative sentiment surrounding the restaurant industry in the UK, Mr Wang said it is his belief that the growth fundamentals of the sector “remain sound”.
“With consumers increasingly seeking to spend their money on experiences and an ever-growing popular interest in food, the casual dining market is well placed to continue to benefit from these trends in the long term, although we remain cautious about prospects in the nearer term.
“In challenging conditions, the strongest brands, like PizzaExpress, will prove resilient. But we don’t take this for granted – more than ever we are focused on supporting and developing our teams and we are continually seeking to better understand and meet our customers’ needs, all in service of enhancing their experience in our restaurants. And we do this wherever we operate, whether this is in the UK or overseas, where there remains significant potential to grow PizzaExpress, especially in China where there is a growing middle class and demand for Western brands like ours.”
PizzaExpress now has over 600 restaurants globally and sells over 35 million pizzas in UK supermarkets every year.