Gourmet Burger Kitchen sales recover after store closures

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Gourmet Burger Kitchen closed under-performing restaurants last year (Rick Findler/PA)

The embattled Gourmet Burger Kitchen (GBK) has seen sales recover rapidly in the early part of this year as it emerged from a dramatic restructuring plan, the brand’s parent company said.

The burger restaurant’s South African owner, Famous Brands, said on Wednesday that like-for-like sales in the last 12 weeks have risen 8.1%, well ahead of the wider market.

This followed a dip of 4.2% in the 52 weeks to February 24, marking an improvement on the 6.8% decline recorded in the previous year.

But losses before non-operational items widened to £4.6 million.

First-half sales were down 9.7%, but this was partly offset by a 1.4% rise in the latter part of the year as the group executed a company voluntary arrangement (CVA) to close 17 restaurants.

Speaking to the Press Association, managing director Derrian Nardauld said the improvement was a result of slimming down the estate and improving the customer experience.

“Having been caught in the gold rush previously, like other brands which were chasing growth, we had opened some sites that shouldn’t have been opened,” he said.

He added that the UK’s restaurant sector is still experiencing a negative trend, but there are “pockets of excellence” such as Wagamama and Nando’s.

Including restaurants closed prior to the CVA, GBK’s estate was reduced by 24 sites to 80 during the period.

The estate was also revamped with new additions to the menu, fresh branding and the option for ordering and paying via an app at every restaurant.

It was one of several chains forced to shutter locations last year amid a casual dining crisis, with fellow burger outlet Byron among those affected.

Tough conditions have continued into 2019, pushing celebrity chef Jamie Oliver’s restaurant business into administration last week.

Commenting on the collapse, which resulted in all but three of Mr Oliver’s outlets closing, Mr Nadauld said: “It’s a sad story, especially for the team involved. Sadly I don’t think it’s the last one we’ll see.”

Meanwhile, classic burger chain Wimpy, for which Famous Brands owns the UK franchise, also closed stores during the period as part of a consolidation process. The brand now has 67 UK sites after closing 12.

It recorded like-for-like sales growth of 5.5%, while operating profit increased 16% to 18 million rand (£960,000).