Revolution Bars swings to yearly loss as it warns of 'very challenging times'
Revolution Bars, the group behind popular chains like Revolution and Revolucion de Cuba, has reported a significant yearly loss. The company blames this on "very challenging" times for the late-night hospitality industry, with young people feeling the pinch of the cost-of-living crisis and train strikes affecting visitor numbers.
Despite total revenues increasing by £11.8 million to £152.6 million in the year to July, like-for-like sales were down by 8.7%. The group also reported a pre-tax loss of £22.2 million, compared to a profit of £2.1 million the previous year.
Chief executive Rob Pitcher described a "seismic shift" after the Covid pandemic, with the cost-of-living crisis now being the most significant factor impacting the hospitality sector. He noted that young people, who are the key demographic for its Revolution bars, have been hit hardest by high inflation, which has reduced the value of their wages and impacted their ability to spend on discretionary items such as nights out.
The boss of Revolution has spoken out about how train strikes have disrupted major events and key trading days across the UK, including payday weekends and the week before Christmas. However, the company is adapting to the changing climate, with its Peach Pubs chain appealing to an older guest base which is more insulated from the cost-of-living crisis.
A rebound of young professional guests has driven up pre-booked Christmas sales more than 17% higher this year compared to last year, and a return of students has helped improved sales in recent weeks. The group believes that inflation in the UK has "hopefully" peaked and is now starting to fall while consumer confidence is starting to rise.
Warning thousands of businesses face collapse as cost of living crisis continues
At the start of the year, the group decided to shut its bars on Monday and Tuesdays due to soaring electricity costs, but said energy usage was down by more than a third since 2017 and it had cut costs across its bars. Mr Pitcher stated: "The macroeconomic challenges facing the industry impact on both our guests' available spending as well as profitability of the business."
"This is a key area of focus for our management teams, and we are pleased to see the impact of our sales-driving initiatives coming to fruition, alongside active cost management." He added: "We join UK Hospitality in calling for the crucial festive season to be protected and for an urgent resolution to the ongoing rail dispute."
"Not only do the strikes have a significant impact on sales and profitability, but most importantly they affect our colleagues' earning potential through lost shifts and tips which the teams rely on to see them through the quieter trading months of January and February."
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