Some consumers are starting to trim spending in restaurants as worries about the cost of living mount, according to the boss of the company behind the Wagamama and the Frankie & Benny’s chains.
Andy Hornby, the chief executive of The Restaurant Group, said that while people were continuing to eat out, there were early signs that customers were “starting to tighten their belts”.
“Just occasionally in certain scenarios you may see a consumer order less side dishes or not have that extra drink,” he said. “The spend data has been pretty resilient but it hasn’t been going up the way that it was rising very strongly post-Covid.”
Rising inflation, which has reached a 40-year high, is putting pressure on household finances and there are fears that Britain will slide into a recession.
Price rises are being driven by a spike in energy costs that has been fuelled by the Russian invasion of Ukraine. Liz Truss, the prime minister, has set out a plan to protect households and businesses from the energy crisis that will cost an estimated £150 billion.
Hornby, speaking as The Restaurant Group reported interim results, said that even with the government’s intervention, the winter was “not going to be easy” for consumers, given that food and petrol costs remain elevated.
The Restaurant Group is also behind chains such as Chiquito Mexican restaurants and Brunning & Price pubs and is listed on the London Stock Exchange. Its first-half pre-tax losses narrowed to £28.5 million from £57.6 million a year earlier.
The company said that trading at its Wagamama business had been knocked by the heatwave in the 14 weeks to August 21, but that its pubs had benefited from the weather.
The group revealed that it had fully hedged its gas and electricity costs through to the end of 2024 to shield it from the brunt of energy rises.
Hornby is well-known in the City because he was the boss of HBOS when the bank had to be rescued during the 2008 financial crisis, resulting in a £20 billion bailout.
City regulators last month decided not to take any enforcement action into senior executives at the bank following a six-year investigation into bosses actions in the run-up to its failure.
Hornby was understood to have been one of the individuals on which the inquiry had focused but declined to comment on the end of the investigation yesterday.
The Restaurant Group sees first sign of customers curbing their appetites