Prezzo shuts 46 branches including four in London as 810 jobs put at risk
Prezzo will shut 46 loss making sites across the UK including three in London and place 810 workers at risk of redundancy, as soaring energy and a hike in food costs rattle the business.
The Italian restaurant chain, which is owned by private equity firm Cain International said that the closures will impact sites where “the post-Covid recovery has proved harder than we had hoped”.
The strategy will reduce its portfolio to 97 sites across the UK and Ireland and a workforce of around 2,000.
The four London branches are Chingford, Eltham, Mill Hill and Woodford Green.
As soaring inflation continues to impact the hospitality sector, Prezzo reported a 40 per cent increase in the cost of spaghetti, 28 per cent rise for pizza sauce and 15 per cent increase in the cost of its dough balls.
Prezzo hit hard by the pandemic
Dean Challenger, chief executive of Prezzo, said the last three years have been some of the “hardest times” he has ever seen for the UK high street.
“The reality is that the cost-of-living crisis, the changing face of the high street and soaring inflation has made it impossible to keep all our restaurants operating profitably,” he explained.
He added: “We believe the tough decisions we are making today will ensure Prezzo can continue serving communities with high-quality, accessible Italian-inspired meals for many more years to come.”
In 2020, the hospitality group collapsed into administration due to the pandemic, however it was then rescued by current private equity owners Cain International.
Moreover, the fresh closure plan comes two years after the group previously shut 22 restaurants and slashed 216 jobs.
Tom Pringle, joint head of restructuring at the law firm, Gowling WLG, said: “This is a clear example of the economic fall-out of prolonged high inflation. Huge rises in the costs of energy and food are eroding trading margins, and simultaneously making it difficult to pass these costs on to customers who are seeing the same pressures at home.
“While the expected redundancies are regrettable, hopefully Prezzo has acted prudently and early enough to avoid a more serious crisis.”
He added: “The chain still maintains a significant portfolio of outlets as well as a supply chain network that can service these, but others in the sector are not starting from as strong a position and may find that more drastic action is necessary.”