Gourmet Burger Kitchen's future in doubt amid falling sales

By Sophie Witts contact

- Last updated on GMT

Gourmet Burger Kitchen's future in doubt amid falling sales

Related tags: Burgers, Gourmet burger kitchen

The future of the Gourmet Burger Kitchen (GBK) chain looks uncertain amid an ongoing sales decline.

Famous Brands, the South African owner of the group, said in a recent update that like-for-like sales fell 10.6% in the 22 weeks to 29 July 2018, compared to a 2.6% decline in 2017. 

Operating losses rose to £2.24m, compared with £680,000 the previous year. 

When Famous Brands bought GBK for £120m in 2016 ​it said it saw “substantial growth potential” for the chain.

But the company said Friday GBK had “underperformed” the Board and management’s expectations, and was hampered by an “adverse trading environment” in the UK.

Speculation is now mounting it could be considering a sale. In a separate “cautionary announcement”, Famous Brands did not name GBK but said it was considering “strategic options relating to a subsidiary”. 

BigHospitality's​ sister site MCA​ reported in May ​that GBK had earmarked several sites for closure and was planning to slash its opening pipeline this year in the face of falling sales.

Famous Brands said it struggled with “difficult trading conditions” across all its markets during the review period, with “intensified competition activity”.

However, system-wide sales across its African and Middle East businesses – which include the Wimpy brand – rose 7.1%.

In the UK GBK's high street burger rival Byron has begun a major overhaul of its design,​ service and menu after closing 17 restaurants and entering a Company Voluntary Agreement earlier this year.

GBK was founded in Battersea, London in 2001 by three New Zealanders with the backing of Kiwi chef Peter Gordon.

It was bought by Yellowwoods group in 2010, leading to the rapid growth of the chain.

Related topics: Business & Legislation

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