Online delivery service Just Eat served up strong revenues in the first three month of the year, while Pizza Express profits dropped due to higher costs and Britain’s casual dining crunch.
While takeaway food has become very popular, many restaurant chains are struggling, faced with rising costs and worsening consumer confidence.
Strong order growth and a bigger proportion of higher value delivery orders propelled revenues at Just Eat 49% to £177.4m. UK orders climbed 24% to 29.7m, after the firm gobbled up rival Hungryhouse.
One in three of UK’s top 100 restaurant groups are lossmaking – study
Just Eat was the top riser on the FTSE 100 index, with its shares up more than 4%. The firm stuck to its guidance of £660m to £700m of annual revenues, which analysts said was too conservative.
Just Eat has traditionally collected orders on behalf of independent restaurants which deliver the food themselves, but has started delivering for chains such as KFC and Burger King.
Pizza Express, the chain founded in London in 1965 that has been owned by Chinese investment group Hony Capital since 2014, reported an 8.9% drop in underlying profits to £94.6m last year. Its chief executive, Jinlong Wang, blamed higher food prices and wage increases as well as the rise in business rates and commercial rents.
However, Pizza Express, which opened 13 new restaurants and modernised 25 others last year, has fared better than rivals, many of which are in closing outlets. Like-for-like sales in the UK and Ireland edged up by 0.4% and overall turnover rose by 6.3% to £534.2m.
One in three of the UK’s top 100 restaurant groups are loss-making, a recent study showed. Many mid-market chains such as Jamie’s Italian, Prezzo and Strada have been shutting restaurants.