Fortune’s Post

Gordon Ramsay saw losses at his U.K.-based, international restaurant business more than triple to £3.4 million ($4.3 million) in the year to August 2023, according to Companies House filings. The chef said businesses were “battling to stay afloat” amid sustained inflationary pressures that have hit already razor-thin margins in the hospitality sector. Ramsay’s restaurants, which include the chains Street Pizza and Street Burger as well as his three-Michelin Star flagship restaurant, increased revenues by 21% to £95.6 million ($119.8 million) in 2023, while gross profits increased to £47.4 million ($59.4 million). However, a wave of new restaurant openings and refurbishments last year hit the company’s bottom line. Read more: https://lnkd.in/eNqk4Jbf

Why are so many restaurants closing? I was recently asked to provide insight on the state of the restaurant industry and how “Connecticut restaurants are struggling financially because of the high cost of business, but trying their best not to pass the cost onto customers.” Before you comment about the rising menu prices, read on:

The restaurant industry has been through a tumultuous time since the pandemic and it has weathered the storm and there is optimism that the tide has turned for the better. At the restaurant and finance and development conference the attendees were feeling cautious optimism regarding the current state of affairs. The article below from Restaurant Business Online provides clarity on the view restaurant operators.

Denny’s to close 150 restaurants as restaurant chains continue to struggle The ubiquitous and popular diner chain Denny’s will close 150 locations by the end of next year amid declining revenue and changing consumer habits, the company announced Tuesday. Known for 24/7 service and a wide selection of menu items, the company behind the 71-year-old restaurant reported lower-than-expected earnings for the third quarter and has seen shares fall nearly 50% this year. About 50 locations are marked for closure in 2024, with about 100 more to be shut down in 2025, according to information the company released with its earnings report. The closures represent a 10% reduction in the number of locations the company operates. https://lnkd.in/gj7xREJm

Labor costs and shortages are key issues for “Why Sit-down Restaurant Chains Are Struggling” Restaurateurs are having to find creative ways to reengage and retain their customers moving forward. https://lnkd.in/gjhEDe4d

5 takeaways from the Restaurant Finance and Development Conference #Financing Read more ⬇️

Shake Shack is planning to more than quadruple its domestic restaurant count. The fast-casual burger chain said it now sees the potential for its company-operated footprint to reach “at least” 1,500 locations over time, versus its prior target of 450 domestic sites. Shake Shack expects to open about 80 to 85 new restaurants this year, including 45 company-operated locations. Licensed openings are expected to range from 40 to 45 openings

This year, restaurant bankruptcy filings soared, traffic declined and same-store sales disappointed. But green shoots, like improving sales, have given executives hope that next year will be different. “I don’t know about you guys, but I’m ready for ’24 to be behind us, and I think ‘25 is going to be a great year,” Kate Jaspon, CFO of Dunkin’ parent Inspire Brands, said at the Restaurant Finance and Development Conference in Las Vegas this week. Restaurant bankruptcy filings have soared more than 50% so far in 2024, compared with the year-ago period. Traffic to restaurants open at least a year declined year over year in every month of 2024 through September, according to data from industry tracker Black Box Intelligence. And many of the nation’s largest restaurant chains, from McDonald’s to Starbucks, have disappointed investors with same-store sales declines for at least one quarter. No major restaurant company has gone public since Mediterranean restaurant chain Cava’s IPO in June of last year. While Cava’s stock has climbed more than 500% since its debut, its success hasn’t encouraged any other large private restaurant companies to take the plunge. Instead, the broader market conditions have scared off other contenders. The fast-casual chain, best known for its Italian beef sandwiches, has reported falling same-store sales for three straight quarters. Portillo’s has stayed away from some of the discounts offered by others in the restaurant industry, like McDonald’s and Chili’s. Dunkin' Donuts Chili's Portillo's Inspire Panera Bread CAVA #Restaurant #Food #Beverage McDonald's Starbucks CNBC     https://lnkd.in/gnBv5ypH       What is next for Restaurant Sector - https://lnkd.in/gHr4sAZ8

Headwinds and pain points: A survey of 600 full-service restaurant owners, CEOs, general managers, and area managers from across the U.S. reveals that despite continued headwinds and challenges, 94 percent of operators still have expansion plans for this year. According to TouchBistro's 2024 State of Restaurants Report, the top pain points that operators are facing this year are: -Inventory costs: 58 percent of those surveyed said this was their number one concern, and 60 percent of operators reported that all or most of their suppliers have raised prices this year. -Menu prices: In response to inventory cost increases, 67 percent of restaurateurs have raised their menu prices in the past year. -Staff turnover: While the staffing shortage has eased, with roughly 82 percent saying they were short at least one position, turnover rates remain at 28 percent for all full-service restaurants and 34 percent for brands with five or more locations. -Commission fees: 46 percent of operators added more off-premises ordering options to boost profits, yet nearly a quarter report paying more than 20 percent in commission fees for each order.