The owner of Franco Manca and The Real Greek has reported shrinking profits and noted a drop in visits to its city centre restaurants amid rail strikes and waning consumer confidence.
Fulham Shore, which operates the chain of restaurants, said its pre-tax profits fell to £860,000 in the six months to September 25, down from £3.1m in the same period last year.
Operating profits also nearly halved from £4.5m last year to £2.4m this year, which it said reflects one-off spending on new restaurant openings this year.
It opened 11 Franco Manca pizzerias and two The Real Greek restaurants over the period, costing the owner £1.2m in pre-opening costs.
However, the company reported stronger sales, with group revenues shooting up by more than a quarter, from £39.5m last year to £49.9m this year.
It was also a sizeable 38% jump from the group revenues reported in the same period in 2019, prior to the pandemic which forced the hospitality sector to shut up shop.
But the group said it has noted “subdued” early and midweek trading as its customers face rising living costs which have impacted spending confidence.
Coupled with intermittent train and Tube disruption, its restaurants located near offices have taken a hit in recent weeks, particularly on Monday and Friday when workers tend to stay at home rather than commute.
Fulham Shore cautioned that cost-of-living impacts on consumers will continue to influence sales and that train strikes will be equally as disruptive in the coming months.
It said it is reviewing its menu pricing more regularly to cope with rising costs, particularly energy, but still aims to be better value than rival chains.
It is now trying to boost trading at both restaurants early in the week and at lunchtime which is showing early signs of improving sales, it said.
Getting good value for money is also an important driving factor for consumers which Fulham Shore said means its restaurants continue to be popular with the public.
David Page, the executive chairman of Fulham Shore, said: “The group traded in line with management expectations during the period despite challenging trading circumstances.
“This creditable performance was underpinned by continued strong revenue growth at both Franco Manca and The Real Greek reflecting both businesses’ high-quality food and excellent value-for-money propositions.
“Notwithstanding this momentum, the board remains mindful that we continue to operate against an unstable political and economic backdrop, which in turn has impacted consumer confidence and driven up our costs as well as facing significant challenges from the ongoing transportation disruption.”
The group has Franco Manca restaurants in Edinburgh and Glasgow, as well as a The Real Greek site in St James Quarter, Edinburgh.
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