Frankie & Benny's owner expects a 'difficult' six months as it revamps menus

The owner of Frankie & Benny's owner said it expected a "difficult" six months as the group faced tough competition and rising costs such as a higher national minimum wage.

The Restaurant Group, which owns just under 500 UK outlets including Garfunkel's and Chiquito, said like-for-like sales fell 3.9% in the 53 weeks to the start of this month, adding that in the final quarter of the year same store sales worsened to a 5.9% decline.

The business faces tough competition in the casual dining market from rivals such as Nando's, Byron and Turtle Bay.

In the summer the group said it would axe 33 sites and begin to revamp its menus in a bid to boost sales.

It admitted it had previously failed to properly test new more expensive menus with customers, which meant crowd-pleasing dishes such as chicken parmigiana had been mistakenly removed at Frankie & Benny's.

Former Paddy Power boss Andy McCue was brought into replace former chief executive Danny Breithaupt in September.

The group said total sales edged up 0.9% to £710.7m, compared to the prior 53 weeks.

The business added it expected trading "in the first half of 2017 to remain difficult" as it faced a variety of cost pressures such as higher business rates and rising purchasing costs due to the combined effects of higher inflation and weaker pound.

Also, the minimum wage rises to £7.50 an hour on 1 April for workers aged 25 and over, from its current £7.20 level.

However, the group said it expected a better second half of the year as its improved menus and better pricing took effect.

McCue said that the final three months of last year had been "a very difficult trading period", but added that the group needed to "make the necessary changes to offer better value and satisfaction to our customers".