Gourmet Burger Kitchen unveils transformation plan after £7.8m loss

25-May-2018 - Last updated on 25-May-2018 at 11:09 GMT

Gourmet Burger Kitchen (GBK) plans to close six restaurants and slash its openings pipeline for the year as it seeks to turn around falling sales.

BigHospitality’s sister site MCA reports that the group will also look to refresh 30 sites after it recorded a £7.8m operating loss in the year to 28 February, while like-for-like sales fell 6.8 per cent.

Derrian Nadauld, who was appointed managing director of the 106-strong brand at the end of last year, unveiled the strategy at an investor conference for parent company Famous Brands yesterday (24 May).

Two new restaurants will open in 2018, compared to ten in 2017. Six “distressed sites” have been earmarked for closure, with Oldham shutting its doors last week.

Nadauld said there was no timetable for closing the remaining five sites and a number of options were on the table.

The transformation plan will involve simplifying the menu and moving away from an exclusive delivery partnership with Deliveroo to link-up with Just Eat and other providers.

Ten sites will be refurbished before July followed by a further two pockets of ten, with the aim of “making the brand pop”.

Nadauld said where competitors had opened in GBK’s catchment area the group had seen an average 7% sales decline.

But in locations where a nearby Byron had closed, GBK restaurants had seen up to a 14.8% uplift.

“We have had a challenging year and the 12 months ahead is not going to be much easier with the macroeconomic climate in the UK,” said Nadauld.

“But, we have a great team of people behind this brand –with a combination of some expertise from Famous Brands and also the team in the UK. It’s still the favourite burger brand in the category – 31% of consumers vote us their first choice burger brand. It’s about making sure we offer value, that we’re accessible and convenient and that extends into delivery and online.

“We’re not naïve about the challenge but we are optimistic about the prospects in the medium term.”

South Africa-based Famous Brands - which bought GBK for £120m in 2016 - also owns the 78-strong Wimpy chain, which recorded an 8.6% increase in revenue despite closing a net of three restaurants during the period.

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