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Loungers sees thriving sales because it plots latest Little Chef-style diners

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Restaurant group Loungers reports thriving sales because it gears as much as launch a latest British roadside diner brand – reviving the spirit of the Little Chef

  • The hospitality firm scored revenue of £122.3m within the 24 weeks to early October 
  • Eleven latest sites were launched by the business throughout the reporting period
  • Loungers’ founding chairman has compared Brightside to the Little Chef chain

Loungers has posted bumper trading results following latest site openings ahead of launching its first roadside outlet – reviving the spirit of the Little Chef.

Hospitality firm Loungers, which owns the Lounge and Cosy Club brands, scored revenue of £122.3million within the 24 weeks to early October, a rise of nearly a fifth on the prior 12 months and over 50 per cent higher than pre-pandemic levels.

Around a 3rd of its turnover growth prior to now three years has come from rising like-for-like sales, with the rest supported by the opening of fifty more venues.

Upcoming: Loungers plans to open its first Brightside restaurant near Exeter Racecourse, where patrons will have the ability to tuck into ‘comfort-style’ dishes like burgers and pizzas

The figures come ahead of its launch of a series of Brightside roadside diners, where it thinks there may be a possibility to cater for many who wish to take a break and revel in their meal.

Loungers’ expansion has already seen eleven establishments launched by the Bristol-based business throughout the latest reporting period, with an additional 4 rolled out since then and one other 15 set to be opened during this financial 12 months. 

In February, the group plans to open its first-ever Brightside near Exeter Racecourse in Devon, where patrons will have the ability to tuck into ‘comfort-style’ dishes like burgers, pizzas and an in depth brunch menu.

Loungers has previously said the ‘drained and uninspiring’ roadside dining market provides a wonderful opportunity for an original entrant to revitalise a sector dominated by drive-through and quick-service restaurants.

It believes the brand new concept ‘plays to our strengths when it comes to a big freshly cooked menu, speed of delivery, operational intensity through a no-bookings model, all-day, great value and amazing hospitality.’

Three planned Brightsides are positioned on former Little Chefs and Comfortable Eaters sites recently acquired from Route Restaurants and are as a result of launch later by mid-April, with a fourth in Rutland coming the 12 months afterwards. 

Earlier this month, Alex Reilley, founder chairman of Loungers, said: ‘For many individuals, the highlight of childhood road trips in days passed by was a stop on the likes of Little Chef. 

Inspiration: Loungers plans to channel the spirit of the now-defunct Little Chef chain with its new Brightside restaurants

 Inspiration: Loungers plans to channel the spirit of the now-defunct Little Chef chain with its latest Brightside restaurants

‘We imagine there may be a spot available in the market for a fresh concept that provides customers the choice to take a correct break and revel in healthful food and great hospitality, in a landscape that’s currently dominated by drive-thru and quick service formats.’

Yet amidst the thrill surrounding this latest project, the firm warned that cost-of-living concerns, primarily resulting from soaring energy and food prices, are unlikely to enhance at the same time as it expressed optimism over the upcoming Christmas trading period.

Higher worker and sales costs, in addition to the expiration of business rates relief and the lower VAT rate on food and non-alcoholic drinks, caused half-year profits at Loungers to plummet by 77 per cent to £2.5million.

Chief executive Nick Collins, said: ‘We aren’t proof against the inflationary pressures impacting our sector, but we have now worked hard to strike the best balance between growing market share and managing margin pressures.’

The group has hedged utility costs until September 2024 for many of its sites and enhanced the rent-to-revenue ratio to 4.7 per cent, which it partly attributed to locating restaurants inside suburban high streets and small town centres.

Analysts at broker Liberum said: ‘Loungers is well positioned in comparison with peers to combat inflationary pressures through on-going innovation, and thru maintaining its value for money offering and high services levels.’

Loungers shares closed trading 0.3 per cent lower at 191.5p on Wednesday, meaning their value has declined by just below a 3rd up to now this 12 months.

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