Motorway restaurant chain Little Chef has announced it is to close 67 of its 161 commercial property outlets in a move estimated to lead to the loss of between 500 and 600 jobs.
The firm has said the 500 to 600 jobs being cut will be a mixture of full and part-time positions across the UK, and will leave the company with about 1,500 staff.
The commercial property company said it would work to find other employment where possible for those affected by the store closures.
Little Chef Chairman Graham Sims said: “We’ve got 161 sites, some very good, very profitable. Others suffer from a series of problems including high rents and demographic changes. I decided to make a strategic decision not to focus on these sites.”
The commercial property company group was saved by private investment business group RCapital when it fell into administration in 2007. RCapital bought the majority of the business and assets, saving 193 of the 235 restaurants and more than 3,500 jobs.
The company has had to respond to increasing competition from commercial property High Street supermarkets and coffee chains at service stations.
Tim Hipperson, CEO of marketing company, G2 Joshua, stated: “Motorists’ tastes have altered dramatically since the launch of Little Chef back in the late 1950s and they now expect far more than just sustenance, they require a whole customer experience, which their favoured High Street brands can offer.”
Little Chef has responded by revamping its remaining commercial property branches.
In 2008, several of its branches were given an overhaul by Michelin-starred chef Heston Blumenthal as part of a reality Channel 4 TV show. The company has also rolled out its “new concept” model to its other outlets.
Graham Sims, who joined the commercial property company three months ago and used to head BP’s UK retail division, says Little Chef will have to differentiate to compete: “I can move Little Chef from being just a sit-down [restaurant] to one that combines sit-down with takeaway and also a retail offer. That sort of hybrid retail solution enables me to talk to other brands to bring them in our properties.”
Since its formation in 1958, the commercial property restaurant has been sold to a number of firms, including Compass and Granada.
Before entering administration, the restaurant chain was bought in 2006 by its then Chief Executive, Simon Heath, and the Peoples Restaurant Group.
Unions have criticised its current owners for failing to safeguard jobs. GMB Senior officer, Paul Maloney said: “This is dreadful news for employees in these restaurants due for closure. Little Chef has had so many owners over the past decade that GMB members have struggled at times to keep up with who owns what.”
Unions blamed RCapital of selling Little Chef stores and then renting them back-increasing running costs at the business.
However, Mr Sims disagrees with the claims. He said: “These sites were acquired by RCapital in 2007 and they were acquired as leaseholds. Someone before that had sold them and leased them back.”
