2020 Retailers in trouble thread

[anonymous-user]

SydneyBridge said:

From bbc

Most off-putting of all, of course, is the enormous debt number. The interest on that £1.1bn is costing the company £93m a year, which wiped out all its operating profit last year - and then some.

In fact, the debt payments have pushed Pizza Express into the red for the last two years with a loss of £55m last year alone.

£1.1 billion and 470 shops, I make that £2.34 million in debt per shop, how is that even possible? I need to find a way to buy a business with someone else's money, pay myself millions of pounds despite the business never making a profit and then just walk away from the resulting mess.

[jammy-git]

Joey Deacon said:

£1.1 billion and 470 shops, I make that £2.34 million in debt per shop, how is that even possible? I need to find a way to buy a business with someone else's money, pay myself millions of pounds despite the business never making a profit and then just walk away from the resulting mess.

I'd guess starting up each site costs a few hundred thousand at least. Then servicing the debt wiping out any and all profit you make from every single site means the debt just keeps piling up and getting bigger.

[Gweeds]

This tells the story of how Pizza Express has been taken from a decent, sustainable business into one rinsed by Years of financial engineering, one that’s been repeated across the food sector and which always ends up in a few individuals getting even richer and thousands of employees losing their jobs:

https://mobile.twitter.com/i/events/11815902930298...

[anonymous-user]

Companies have had history of loading up debt.

[worsy]

Louis Balfour said:

Robertj21a said:

jakesmith said:

Robertj21a said:

Another one trying to sell basic food at silly prices.

Another one unable to discern different levels of food & service offerings or perhaps someone who thinks restaurants should sell food at supermarket prices and make no profit, thus making a comment that makes them look silly.

A pizza at Pizza Express is about £13 not including the very frequent offers they do such as 3 courses for £15. Please tell me what you would consider to be the correct price if that is too much for you, and provide a web link to somewhere with an equivalent offering & quality level for a significant pricepoint lower for me to have a good chuckle at.

£13 for a pizza that costs about £1-2 to produce. Of course it's a stupid price that everyone can see through. Even then their profits come from all the other overpriced extras and drinks.
I have no problem with paying for the facilities, ambience and good service - but this is just a basic pizza joint, like many others.

Nah, I'd say that Pizza Express is generally better than other pizza chains.

IIRC the reason they are in trouble has more to do with investors rinsing them.

Nah, I like a side of fries with my Pizza not those Polenta thingies.

[ant1973]

jammy-git said:

ant1973 said:

Eating out is an occasional treat. Give me the family run, local restaurant any day of the week over the chains. It's not, however, news that gross margin on food is huge. It needs to be because the fixed costs are also suitably enormous. Look at the net margins of most chains and stellar they are not. The pizza you can make for a couple of £ is not a fair comparison with one made at PE for £13. Even a McD family sit in meal is not much change out of £30-40 by the time you have finished.

What makes you think you're getting better quality at a local family run joint? They're likely to be buying food and drink at a higher cost price than the chain whilst still trying to compete somewhat with the chain on price, so they're even more likely to be trying to cut corners.

I can only speak from a personal perspective. I dare say what you say is true in some instances. However, the Battlefield Rest in Glasgow serves a better pizza than Pizza Express at a lower cost. Moreover, all of their the food is cooked from scratch and it tastes terrific. To be clear, I would pay more to visit somewhere authentic than a chain. In saying that PE also make a good pizza and I would not be unhappy to enjoy a meal at one of their eateries. They a re a non-chain chain if you see what I mean? A bit like Wagamamas used to be.

[2 sMoKiN bArReLs]

worsy said:

Nah, I like a side of fries with my Pizza not those Polenta thingies.

Not just me then! What is that all about eh? (and I once thought they were called placenta fries)

[soxboy]

Joey Deacon said:

£1.1 billion and 470 shops, I make that £2.34 million in debt per shop, how is that even possible? I need to find a way to buy a business with someone else's money, pay myself millions of pounds despite the business never making a profit and then just walk away from the resulting mess.

Even more scary if you put it like that. At 5% interest over 10 years that's a repayment per restaurant of almost £25,000 per month (not that the debt will ever get cleared of course)

[hyphen]

soxboy said:

Joey Deacon said:

£1.1 billion and 470 shops, I make that £2.34 million in debt per shop, how is that even possible? I need to find a way to buy a business with someone else's money, pay myself millions of pounds despite the business never making a profit and then just walk away from the resulting mess.

Even more scary if you put it like that. At 5% interest over 10 years that's a repayment per restaurant of almost £25,000 per month (not that the debt will ever get cleared of course)

They were chatting about in on the radio earlier. Apparently some Chinese company bought puzza express intending to roll it out acrosss China, but hasnt happened.

[menousername]

Ironically record low interest rates and investors / pension funds hunting for yield created a huge amount of bond issuance over the last few years. Now its the debt that is causing a lot to fold.

Obviously a bit more convoluted for the likes of PE but it was pretty predictable a couple of years ago

[Gecko1978]

Anonymous-poster said:

Robertj21a said:

£13 for a pizza that costs about £1-2 to produce. Of course it's a stupid price that everyone can see through. Even then their profits come from all the other overpriced extras and drinks.
I have no problem with paying for the facilities, ambience and good service - but this is just a basic pizza joint, like many others.

The ingredients may be £1-2 but there might be a few other costs to factor in, that’s just a guess of course!

a friend had a cake shop, you know ther place fancy looking pastries in the window £3 or more a pop did coffee too. Very few of them were made by his staff. But the coffee machine was over £3k the chillers siimilar per unit, then rates rent, wages etc. The cost of the product is minimal.

What we have had last 30 years if more wealth so more people ate out (as I kid in 80s I recall once or twice a year). So more an more chains have popped up to meet demand for a family of four to have a meal out on a saturday.

But 2008 recesion, then brexit, then covid plus changes in shopping habits due to online and suddenly there is not as big a market for these things as there was in 2007. its just taken 13 years 3 major economic events to finally kill them off.

[jakesmith]

Robertj21a said:

jakesmith said:

Robertj21a said:

jakesmith said:

Robertj21a said:

Another one trying to sell basic food at silly prices.

Another one unable to discern different levels of food & service offerings or perhaps someone who thinks restaurants should sell food at supermarket prices and make no profit, thus making a comment that makes them look silly.

A pizza at Pizza Express is about £13 not including the very frequent offers they do such as 3 courses for £15. Please tell me what you would consider to be the correct price if that is too much for you, and provide a web link to somewhere with an equivalent offering & quality level for a significant pricepoint lower for me to have a good chuckle at.

£13 for a pizza that costs about £1-2 to produce. Of course it's a stupid price that everyone can see through. Even then their profits come from all the other overpriced extras and drinks.
I have no problem with paying for the facilities, ambience and good service - but this is just a basic pizza joint, like many others.

Really they should sell it at cost for your benefit shouldn't they.
As per my previous comment, please do show me an equivalent restaurant offering 3 courses for £15 that you think represents better value.

Who mentioned an equivalent with better value ?. It's simply overpriced for what is really very cheap, basic, food - they all are, or were when they thought they could get away with it.
Do you really believe that most people go in and pays just £15 ?

No it is not overpriced, as there is nothing else comparable on the market, it is cheap for what you get
No it is not basic food, it requires expensive equipment, a wide variety of fresh ingredients, and more training than many other high street chains
You haven't got a clue what you're talking about.

[Thankyou4calling]

ant1973 said:

Eating out is an occasional treat. Give me the family run, local restaurant any day of the week over the chains. It's not, however, news that gross margin on food is huge. It needs to be because the fixed costs are also suitably enormous. Look at the net margins of most chains and stellar they are not. The pizza you can make for a couple of £ is not a fair comparison with one made at PE for £13. Even a McD family sit in meal is not much change out of £30-40 by the time you have finished.

A McDonald’s meal. £30 - £40! Blimey you’d have to eat a serious amount of food to pay that. Unless your family is the Waltons.

Burger meal is £5
Kids Meal is £2.50

Edited by Thankyou4calling on Thursday 16th July 18:19

[vaud]

jakesmith said:

No it is not overpriced, as there is nothing else comparable on the market, it is cheap for what you get
No it is not basic food, it requires expensive equipment, a wide variety of fresh ingredients, and more training than many other high street chains
You haven't got a clue what you're talking about.

Agreed

Pizza Express also use very high quality ingredients. DOP stuff, etc You don't get a lot of it but then that's the point of quality.

I can cook a good pizza at home from scratch but PE is pretty good when out and about. A safe choice for parents with young kids. It's a value sell, not a cost sell. If I want 2000 calories of dripping fat from a pizza, I'd go to Dominos (I won't).

[The-Wanderer]

ant1973 said:

I can only speak from a personal perspective. I dare say what you say is true in some instances. However, the Battlefield Rest in Glasgow serves a better pizza than Pizza Express at a lower cost. Moreover, all of their the food is cooked from scratch and it tastes terrific. To be clear, I would pay more to visit somewhere authentic than a chain. In saying that PE also make a good pizza and I would not be unhappy to enjoy a meal at one of their eateries. They a re a non-chain chain if you see what I mean? A bit like Wagamamas used to be.

Sounds like a comparison with Rudy’s in Manchester. Ok, you probably pay a bit of Ancoats tax, but even so it’s freshly made, and a shared antipasti platter and pizza (one size only, and usually big enough for two) is not much more than £20. Superb food, great atmosphere, decent enough wine by the glass at a sensible price. Pizza Express don’t even come close anymore.

[i4got]

jakesmith said:

No it is not overpriced, as there is nothing else comparable on the market, it is cheap for what you get
No it is not basic food, it requires expensive equipment, a wide variety of fresh ingredients, and more training than many other high street chains
You haven't got a clue what you're talking about.

Nothing else comparable? I suspect you must have some connection with Pizza Express.

What about Pizza Hut, Pizza Express, Papa Johns, Pizza World, Franco Manca. Then take into account other chain Italians serving pizza like Prezzo, Zizzis, Bella Italia, Ask. Add in the takeaway only options like Dominos.

Cheap for what you get? It's at the top end of its competitors (above)

More training than other chains? They've picked the most basic, easiest to cook foodstuff, and convinced the UK aspirational class that its something special. It's the same foodstuff as dominos, papa johns etc.

Expensive equipment? Same as dominos, papa johns etc.

Honestly what have Pizza Express done to turn you into such an evangelist.

Its a bog standard pizza restaurant with some pretensions - aiming for the Centre Parcs demographic.

[Robertj21a]

jakesmith said:

No it is not overpriced, as there is nothing else comparable on the market, it is cheap for what you get
No it is not basic food, it requires expensive equipment, a wide variety of fresh ingredients, and more training than many other high street chains
You haven't got a clue what you're talking about.

You're either naive or incredibly blinkered if you honestly believe much of that twaddle.

[jakesmith]

i4got said:

jakesmith said:

No it is not overpriced, as there is nothing else comparable on the market, it is cheap for what you get
No it is not basic food, it requires expensive equipment, a wide variety of fresh ingredients, and more training than many other high street chains
You haven't got a clue what you're talking about.

Nothing else comparable? I suspect you must have some connection with Pizza Express.

What about Pizza Hut, Pizza Express, Papa Johns, Pizza World, Franco Manca. Then take into account other chain Italians serving pizza like Prezzo, Zizzis, Bella Italia, Ask. Add in the takeaway only options like Dominos.

Cheap for what you get? It's at the top end of its competitors (above)

More training than other chains? They've picked the most basic, easiest to cook foodstuff, and convinced the UK aspirational class that its something special. It's the same foodstuff as dominos, papa johns etc.

Expensive equipment? Same as dominos, papa johns etc.

Honestly what have Pizza Express done to turn you into such an evangelist.

Its a bog standard pizza restaurant with some pretensions - aiming for the Centre Parcs demographic.

Not really sure where to start but I have no connection with the business and it is very arrogant to assume you are so infallable in your opinion that someone who thinks differently to you must be a plant for the company. If you think you get the same level of food, beverage offering, quality of location, variety of menu, or service, at Pizza Hut as PizEx, then you simply don't understand how to discern a consumer proposition. If you can't discern a premium proposition then good for you, save a bit of money eating in Pizza Hut.

Doesn't mean there isn't a difference there and that the choice of others is invalid because they are willing to sit in a nice city center location rather than a business park, or want a selection of new dishes frequently, a range of healthy options, a wider selection of different drinks like wines and well made cocktails, nice light airy decor with quality furnishings, a pleasant ambiance created by considered music and lighting, or staff that know about the food and drink, or any of the other features that drive a price up very slightly.

Personally I prefer that to the feeding-time-at-the-zoo of the Pizza hut all you can eat buffet and am very happy to spend a few £ extra for the experience.

[vaud]

i4got said:

Nothing else comparable? I suspect you must have some connection with Pizza Express.

What about Pizza Hut, Pizza Express, Papa Johns, Pizza World, Franco Manca. Then take into account other chain Italians serving pizza like Prezzo, Zizzis, Bella Italia, Ask. Add in the takeaway only options like Dominos.

Cheap for what you get? It's at the top end of its competitors (above)

More training than other chains? They've picked the most basic, easiest to cook foodstuff, and convinced the UK aspirational class that its something special. It's the same foodstuff as dominos, papa johns etc.

Expensive equipment? Same as dominos, papa johns etc.

Honestly what have Pizza Express done to turn you into such an evangelist.

Its a bog standard pizza restaurant with some pretensions - aiming for the Centre Parcs demographic.

It's really not comparable. Different demographic, agreed but a very different proposition.

[Anonymous-poster]

Robertj21a said:

jakesmith said:

No it is not overpriced, as there is nothing else comparable on the market, it is cheap for what you get
No it is not basic food, it requires expensive equipment, a wide variety of fresh ingredients, and more training than many other high street chains
You haven't got a clue what you're talking about.

You're either naive or incredibly blinkered if you honestly believe much of that twaddle.

What part of the hospitality industry are you in?