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The Market

Trends within the broader eating out market are mixed, with the restaurant sector overall seeing sales decline but with branded restaurants experiencing growth of 4.5% in 2017. Recent data suggests that consumer behaviour is changing, with people eating out less frequently but spending more when they do make the decision to go out. In addition, although restaurant supply growth has steadied over the last year the market remains highly competitive and, as a result, levels of discounting appear to be increasing in some segments of the market. This context helps inform our strategic priorities to keep our brands front of mind for the guest through innovation and continuous development, as well as premiumising, in order to take advantage of changing customer behaviour.

There are unprecedented cost headwinds facing the sector, putting the focus on efficiency and maximising profitable sales growth. In addition, there is also political uncertainty domestically and surrounding the impact of the UK leaving the European Union. There are three main areas on which Brexit may impact our business: changes in consumer confidence; changes in employment and immigration laws; and the impact on input costs. Without clarity on the terms of exit, the impact of the first two remains relatively unknown and we continue to closely follow developments in these areas. Input costs will continue to be impacted by changes in the value of sterling. While the fall in the value of the currency since the EU referendum has been profit dilutive we do have a strong track record of partially mitigating input costs inflation through procurement initiatives.

We believe that success in our evolving market requires quality brands, offering great experiences at the right price and with high amenity levels, to generate sufficient sales growth to mitigate cost headwinds.

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Contact Us

A photograph of Tim Jones
Tim Jones Finance DirectorCarlie WakefieldPA to Finance Director +44 (0) 121 498 6112
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Denise Burton Deputy Company Secretary +44 (0) 121 498 6514
Amy De Marsac Head of Investor Relations +44 (0) 121 498 6514