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Investors left with sour taste in their mouths as restaurant owner Tasty warns on industry outlook again

Published: 09:01 09 Jan 2018 GMT

wildwood restaurant
Tasty owns the Wildwood and dim t restaurant chains

Tasty Plc (LON:TAST) was anything but early Tuesday as the Restaurant Group warned that it expected the already troubled sector to suffer even more this year.

The firm, which owns the Wildwood and dim t restaurants, kicked off the trading update by saying that trading for the year to December 31 had been in line with management’s expectations.

Investors and traders were more interested in the second sentence though, which read: “The board has previously highlighted the difficult trading environment faced by the restaurant sector and expects a further deterioration in 2018.”

That bleak outlook sent shares tumbling by 13% to 27p not long after the opening bell.

Others have warned on outlook as well

Tasty isn’t the only firm in the sector that lacks much optimism – Frankie & Benny’s owner Restaurant Group PLC (LON:RTN) and Franco Manca pizza chain parent Fulham Shore PLC (LON:FUL) have also expressed their concerns in recent months.

Restaurants, like high street retailers, are struggling to get punters through the door, with rising inflation and stagnant wage growth contributing to a weakening UK consumer environment.

Tasty issued a profit warning over summer in which it said it would sell off and close certain sites and it confirmed today it has now sold four loss-making restaurants and undertaken a sales-and-leaseback of one other, bringing in £2mln in the process.

Two further sites are currently under offer and are expected to be sold off “in the coming months”.

Finance boss to leave

On a separate note, Tasty confirmed that finance director Tim Cundy has handed in his resignation.

Cundy – who has been in the role for the past four years – will serve his three months’ notice before leaving.

A replacement with “significant sector experience” has already been identified, Tasty said, with an appointment expected to be made over the coming weeks.

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