The Restaurant Group reports 24% increase in profits

The Restaurant Group said interest rate cuts have improved business recently. The owner of the Frankie & Benny’s, Garfunkel’s and Chiquito family was affected by reduced consumer spending at the end of last year.

The credit squeeze and increased mortgage repayments meant consumer confidence had collapsed but 2 interest rate cuts in December and February helped to restore this.

Andrew Page, Restaurant Group’s chief executive, said it resulted in ‘a very clear tail-off’ in the final quarter when like-for-like sales growth dropped to just 1% from 7% for the previous 9 months.

However, the group has now experienced a 4% rise in like-for-like sales at its 330 restaurants since the start of the year.

Mr Page added that it is possible the monetary easing there has given us a little bit of a fillip. If I on 1 January had been asked, I would have grabbed 4% with both hands. We believe dining out is something people are reluctant to give up. This is a small-ticket item and something that has become habitual, concluded Mr Page.

Furthermore, the group announced a 24% increase in profits to £43.5 million.

The Bank of England’s Monetary Policy Committee are meeting today, many experts believe interest rates will remain the same but further cuts are predicted in the spring.

Story link: The Restaurant Group reports 24% increase in profits