Gordon Ramsay Restaurants has suffered colossal losses of up to £12 million, and has reported cutting 300 staff members in the year to August 2021 because of closures and restrictions during the Covid-19 pandemic.
The celebrity chef-run restaurant group is warning of further pressure on its financial performance by the cutbacks in consumer spending and rising inflation rates.
The latest published company accounts for Ramsay’s restaurant group reported combined losses of £6.8m for the 12 months to August 2021, up from £5m in the previous financial year.
The celebrity chef runs or owns a stake in 35 restaurants across the UK, and a further 13 worldwide. It reportedly received £3 million in government funding through the furlough scheme, which aimed to retain workers through five months of national lockdown.
The £26.2 million in revenues made by Gordon Ramsay Restaurants in the last financial year are less than half that made during pre-pandemic trading, with results of £54.7m in 2019.
And the restaurant group is in for further challenges due to the current squeeze on consumer spending and peaking inflation figures.
The group has said its restaurants had bounced back to profitability, with sales performing consistently ahead of pre-pandemic trading.
But it is yet to be out of the woods. Accounts emerged on the same day the Bank of England warned of a looming recession in the final quarter of 2022.
According to its worst case scenario forecast, the group could suffer a cut back in sales and diminished margins, it said, similar to the 20% drop in sales seen over the Omicron period between November and February.
The company is gearing up to cut costs to stay afloat. Accounts showed the company’s highest-paid director was given a total pay package of £327,000 for the year to August 2021, down from £493,000 the previous year, Sky News reported.
This article was originally published by the drinks business and has been shared with permission.