Gourmet Burger Kitchen: majority of troubled sites opened in last two years

29-Oct-2018 - Last updated on 27-Apr-2021 at 12:05 GMT

Related tags Burger Gourmet burger kitchen Restaurant

The majority of Gourmet Burger Kitchen (GBK) restaurants earmarked for closure or rent reductions opened within the last two years, documents show.

Last week the brand announced plans to enter a Company Voluntary Agreement (CVA) off the back of falling sales.

In a CVA proposal seen by BigHospitality’s sister site MCA, GBK’s South African owner Famous Brands said it has identified 46 restaurants out of its 85-strong estate that are either loss-making, over-rented or do not add strategic value to the company going forward.

The majority of these distressed sites are relatively new and opened between 12 and 24 months ago.

The company states that on review, the new business strategy during this time was flawed and driven by a race to market in areas not traditionally identified as GBK “heartland”.

It said that compounding the under-performance in these areas was “poor brand recognition in the north, trading formats that were not adapted to the market, and pricing and menus that were London centric”.

The company states that a number of new shopping schemes also struggled to attract retail customers in sufficient numbers from a restaurant perspective.

It stated: “Many of these schemes are over-traded in food and beverage. The rapid shift to online retail has also had the effect that the traditional anchor tenants have not been able to attract the kind of footfall they traditionally have relied on.”

Under the terms of the CVA, GBK has earmarked 17 of its restaurants for potential closure, with would impact c250 staff, however the company said every effort will be made to relocate them.

Restaurants categorised as being unviable even after rent reductions include sites in London’s Soho, Bristol’s Park Street, Swindon, Leicester, Fulham, Bedford, Milton Keynes, Glasgow Fort, Norwich, Newport and Sheffield’s Meadowhall.

GBK has also closed restaurants in Bolton and Liverpool in the last few months.

In its latest trading update Famous Brands revealed like for like sales at GBK fell 9.7% in the 26 weeks to 26 August 2018, compared to a 3.2% drop in the same period last year.

To subscribe to MCA's daily newsletter, click here.