Coppa Club and Noci owner Various Eateries warned its profits will be lower than expected amid an “unprecedented” squeeze on margins from high food, labour and energycosts, in the latest sign of the difficulties facing restaurants.
Various Eateries said sales this year will still meet expectations, but it expects a hit to its profit margin for this year amid the rising cost of food, staff and energy.
Chair Andy Bassadone said: "A squeeze on margins of this scale is unprecedented in my thirty-five years’ experience in the hospitality industry.
“Even though we were anticipating a significant downturn, the actual rise in input costs has been much higher and far more sustained than the industry anticipated.”
The restaurant group’s board is taking steps to “mitigate” these higher costs. It said it would not pass on the full impact of higher costs to customers.
“In addition to the discipline we are exercising in relation to new openings referred to above, we continue to focus rigorously on the cost structure and operational efficiency and will adapt the way we operate in
CEO Yishay Malkov said: “I am proud of the way our teams continue to rise to the challenges of the current landscape while maintaining an unwavering focus on delivering exceptional experiences to everyone that comes through our doors. It is thanks to them that our brands have built such strong reputations and remain in such high demand.
“Looking ahead, while it’s difficult to say with any certainty when the pressures we, and others in our industry are under will subside, we will continue to monitor and respond to further changes in the landscape as necessary.”
According to data from CGA, food service supply costs jumped by 21.6% in May, and are up by 34% in two years.
Shaun Allen, CEO of Prestige Purchasing said “Food prices in the UK hospitality sector continue to increase at just under 2% each month.
“This rate of increase is likely to be close to a tipping point, where dominant inflationary pressures should start to be eased by competing deflationary factors. The exact timing of this tipping point is uncertain whilst impacts like Brexit, energy, labour costs, interest rates and climate change remain volatile.”
Various Eateries operates 15 Coppa Club restaurants and two Noci locations, with Coppa Club Guildford and Noci Battersea Power Station both opening in the past two months. It is planning to open a third Noci on Old Street.
