Prezzo Unveils Strategic Overhaul with Refurbishments and New Offerings
Posted by Emily on 1st Sep 2024
Prezzo, the well-known Italian restaurant chain, has announced an ambitious plan to revitalise its estate over the next several years. This includes not only refurbishing its existing restaurants but also exploring the introduction of a breakfast menu and a new retail range. These initiatives come as the group seeks to solidify its position in the market following a notable return to profitability.
In its most recent financial report, Prezzo revealed a profit before tax of £5.5 million for the 52 weeks ending 31 December 2023, a significant turnaround from the previous year's pre-tax loss of £31.6 million. Adjusted EBITDA also improved, rising to £2.2 million from a loss of £5 million in 2022. However, the company's revenue declined from £134.7 million to £110.4 million, attributed primarily to a strategic restructuring that led to the closure of over 50 restaurants. As of the end of the year, Prezzo operates 97 restaurants across the UK.
The restaurant chain, backed by Cain International, announced in March that it had returned to profitability following this restructuring. Prezzo has implemented price increases to combat rising costs as part of its ongoing strategy. However, the company has also focused on menu development and investment in high-quality ingredients to ensure that the higher prices do not negatively impact customer volumes.
Looking ahead, Prezzo has committed to a series of refurbishments in 2024, 2025, and 2026. These investments are aimed at enhancing the dining environment to match the premium quality of the menu offerings. Additionally, the company is actively exploring several strategic opportunities for sustainable growth, including the potential introduction of a breakfast menu and the launch of a new retail range.
In a bid to further improve profitability, Prezzo introduced the Time & Attendance system in April 2023. This initiative, along with the increased menu prices and other cost-saving measures, contributed to a 460 basis point improvement in gross profit margin, bringing it from 35.6% to 40.2%.
Earlier this year, Prezzo's Chief Executive, Dean Challenger, hinted at further expansion plans, including developing a quick-service restaurant (QSR) concept. This new venture would focus on takeaway pasta and is expected to open in UK train stations, marking the group's foray into the fast-paced QSR market.