The owner of French brasserie chain Côte is in advanced talks to salvage a number of The Real Greek restaurants, but the Mediterranean chain could still see half of its UK locations shut down. Sky News reports that the Karali Group is in the "advanced stage of talks" with The Real Greek owners, Fulham Shore, about taking on a portion of their restaurants. Karali is reportedly planning to acquire only between 10 to 15 of the popular Greek food spots, meaning around half of the chain's 28 restaurants would close.
Franco Manca also scaling back
The news comes as The Real Greek's sister chain, Franco Manca, which has branches in Birmingham, scales back. The chain has announced it is to shutter 16 of its restaurants via a company voluntary agreement (CVA), an insolvency process that puts about 225 jobs at risk. Food blogger Gerry del Guercio of BiteTwice recalled the early days of Franco Manca, saying, "It was all the rage. It was just desperately cool, and everyone wanted to try."
Industry pressures
Fulham Shore chief executive Marcel Khan blamed a string of "external cost pressures" hitting the hospitality industry. Reuben Pullan, a consultant at CGA, said, "We are seeing all operators feeling the squeeze. And Franco Manca had a fairly large estate. So if energy costs or purchasing costs for them have recently shot up, it might have tipped the balance for some sites being no longer profitable. I think it is just the unfortunate churn in a market that is under pressure right now."
Food service consultant Peter Backman added, "It's more to do with operational costs rather than a falling demand. If they manage the CVA well – and most companies do, because they get rid of underperforming stores and the overhang of loss-making – that gives them a freedom that they haven't had for a few years." He also noted that sourdough is seen as a higher-value product, which makes it more expensive, but consumer perception of better quality or aspirational value remains.
