The coronavirus pandemic has managed to severely dent the global restaurant sector. UK’s hospitality businesses has suffered immensely by the outbreak, forcing numerous food chains to restructure their business strategies. Recently, Pizza Express revealed plans to close 73 restaurants across the country, with estimated 1,100 jobs to be at risk after creditors voted in favor of the move.
According to a statement, the restaurant chain said that 89% of creditors have backed its CVA (Company Voluntary Arrangement) proposals, including reductions in rent. The successful vote will help their business address challenges incurred by the COVID-19 pandemic. Unfortunately, the CVA proposal will drive the closure of 73 restaurants, risking 1,100 jobs.
Following this move, Pizza Express will be joining Frankie & Benny’s, Zizzi, and Byron Burger among the ranks of chains that have closed their outlets after plummeting sales recorded during the lockdown. Last month, Pizza Express said the burden of low sales during lockdown, uncertain economic outlook, and surplus costs to reopen has made it difficult to pay rent bills.
A similar condition is being experienced by other restaurant brands. For instance, in June, Frankie & Benny’s and Garfunkel’s owned the Restaurant Group said it is planning to close up to 120 restaurants, causing almost 3,000 job losses. Meanwhile, in May, Carluccio sacked more than 1,000 employees as part of its rescue deal.
By implementing the turnaround plans, Pizza Express could cut down its colossal £735 million debt to around £319 million, with £144 million of new funding set aside to invest in growth. The company claims that it currently has 355 restaurants operating in the UK, with over 30 due to reopen in the coming weeks.
In a bid to revive the economy and bring the region’s hospitality sector back on track, the UK government is diligently making efforts on scale. Recently, the government introduced the ‘Eat Out to Help Out’ discount scheme to aid struggling food businesses recover in the UK and encourage diners to return to restaurants and cafes.