Pizza chain Papa Johns has said it will close nearly a tenth of its UK restaurants - all of which it says are "underperforming".

The closures follow a review of the business which identified sites that were "no longer financially viable".

The chain, which has 450 restaurants plus others in service stations and holiday parks, will close 43 sites but has not said how many jobs will be hit.

Its announcement followed reports that said Revolution could shut about 20 bars, or a roughly a quarter of its outlets.

Store closures rise but food chains help fill gap

Announcing the Papa Johns site closures, UK managing director Chris Phylactou said: "Our priority is our team members, who will be fully supported throughout this process.

"Our goal is to work with impacted team members and attempt to find redeployment opportunities where available."

The closures are all in England and extend from Harrogate, North Yorkshire to St Helens, Merseyside, Billericay, Essex and Eastbourne, East Sussex.

All of them were "underperforming locations that are no longer financially viable", the company said.

While other sectors of the hospitality industry have faced serious problems in recent years, takeaway outlets in general are booming, according to consultancy PwC.

It said last year, a net 151 chain takeaway shops opened.

"It's a good sector to be in, albeit that there's a lot more competition as others open," said PwC senior retail adviser Kien Tan.

"There's increasing consumer demand for takeaway and for takeaway outlets. If you're trading down from eating out or going out it's more affordable than going out for the evening."

Papa Johns had previously said it planned "strategic closures" in order to free up money for investment and improving profitability at its remaining UK sites.

It plans to expand further into non-traditional sites like holiday parks and the chain said it would "announce other large retail partners in the coming months".

US-owned Papa Johns said the UK was its second biggest market and it was "committed to driving growth in the UK and improving results over the long term".

Revolution Bars, which also owns Revolucion de Cuba, said that following a period of "external challenges" which had hit trading it was "actively exploring all the strategic options available to it to improve the future prospects of the group".

This could include restructuring parts of the group or a sale of "all or part of" the group, it said.

Revolution also said it was talking to "key shareholders" and other investors about raising extra funds.

When the company reported on trading in January, it said that the Revolution brand was underperforming because the cost of living crisis had hit younger people harder.

Earlier this month, figures showed there was a rise in new retail outlets opened last year, dominated by coffee drive-throughs, bubble tea shops and fast food restaurants, mostly located outside city centres.

But according to PwC, which analysed data compiled by the Local Data Company, the openings were not enough to outweigh the places where chains, such as Wilko, shut up shop, and there was a net decrease of 5,000 stores across the UK.

So far this year, the Body Shop and night club chain Pryzm have already run into difficulties, announcing the closure of sites.

Source:
courtesy of BBC NEWS

by Karen Hoggan

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