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US retailer Target grapples with shipment disruptions from India and Pakistan amid Red Sea crisis

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Target

Target, a major U.S. retailer, is facing shipment disruptions from India and Pakistan, significant regions for apparel manufacturing. The source, familiar with the situation, informed Reuters on Friday that these disruptions are a result of the crisis in the Red Sea. However, the overall impact is described as “minor.”

The company has experienced delays in the receipt of some shipments due to extended transit times observed by vessel operators. The source indicated that the company is actively working with its shippers to redirect merchandise around the Suez Canal. Furthermore, the additional time and costs associated with this re-routing are anticipated to be minimal.

Attacks on vessels in the Red Sea by the Iran-backed Houthi militia have led to disruptions in trade on one of the world’s most important shipping routes. This situation has added between 10 and 15 days to transit times, as ships opt for the safer route around southern Africa.

“We leverage production and transportation partners across the globe, and the majority of our freight does not travel through the Suez Canal,” Jennifer Kron, a spokesperson for Target said on Tuesday.

“For any freight that’s being routed around the Suez Canal, we’re working with shipping partners on alternative paths,” she added. “Target remains confident in our ability to get guests the products they want and need.”

Some retailers are proactively replenishing their stock of goods and exploring alternative transportation options by air or rail to prevent empty shelves during the spring season. Concurrently, automakers like Tesla and Geely-owned Volvo Car have temporarily suspended some production in Europe due to a shortage of components.

Currently, Target is not considering the use of air freight, as mentioned by the source, even though it employed this method during the pandemic.

During the NRF conference on Sunday, the CEO of FedEx Corp mentioned that the prominent U.S. parcel delivery giant has yet to observe a substantial shift to air freight that would significantly impact its operations.

Target sources a variety of products, including garments, plastic items, toys, and bath products, from suppliers in India and Pakistan, which serve as crucial sources for the U.S. retailer, as per its global factory list. The usual route for shipping these products involves passage through the Suez Canal.

While the Suez disruptions mainly affect Asia-to-Europe trade, about 30% of shipments to the U.S. East Coast go through the canal.

Most of Target’s products, however, come from China and are shipped directly across the Pacific Ocean to West Coast ports, unaffected by the disruptions in the Middle East.

The company is also not seeing any impacts to spring merchandise, the source said.

Continue Exploring: US online retailer Zulily faces liquidation, leaving customers and employees in the lurch

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Uber to discontinue alcohol delivery service Drizly by March

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Drizly

Uber, a prominent ride-hailing company, is discontinuing its acquired alcohol delivery service, Drizly, for which it paid $1.1 billion.

The company had planned to integrate Drizly into Uber Eats but never succeeded.

According to Axios, the Drizly brand will be phased out by March.

“After three years of Drizly operating independently within the Uber family, we’ve decided to close the business and focus on our core Uber Eats strategy of helping consumers get almost anything – from food to groceries to alcohol – all on a single app,” an Uber spokesperson said in a statement.

“We’re grateful to the Drizly team for their many contributions to the growth of the BevAlc delivery category as the original industry pioneer,” the spokesperson added.

Drizly provided backend technology that let local liquor stores provide their own deliveries.

In 2020, it confirmed a hack that exposed information of around 2.5 million customers. It was the leading on-demand alcohol marketplace in the US, available in more than 1,400 cities.

After alcohol at your doorstep, Uber CEO Dara Khosrowshahi had even planned to deliver cannabis or marijuana when “the road is clear”.

The Uber CEO had told CNBC News in 2021 that the ride-hailing company could start delivering weed once federal regulation allows the company to do so.

“When the road is clear for cannabis, when federal laws come into play, we’re absolutely going to take a look at it,” Khosrowshahi was quoted as saying in the report.

Marijuana still remains illegal under the US federal law, but some lawmakers have expressed a willingness to change the policy.

Continue Exploring: Uber Eats targets broader market with new AI features and expanded payment options

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Burger King’s parent RBI to acquire Carrols Restaurant Group for $1 Billion

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Restaurant Brands International
Restaurant Brands International

Restaurant Brands International (RBI), the parent company of Burger King, has finalized a deal to purchase Carrols Restaurant Group for a sum of $1 billion.

In an all-cash transaction, RBI will acquire all outstanding shares of Carrols at a rate of $9.55 per share, including those not currently held by RBI.

RBI presently possesses a 15% stake in Carrols’ equity and intends to complete the acquisition of the remaining equity as part of the transaction.

The transaction is scheduled to conclude in the second quarter of 2024, contingent upon regulatory approvals and standard closing conditions, including the approval of Carrols’ stockholders.

Carrols manages a network of 1,022 Burger King restaurants spanning 23 states in the US, generating $1.8 billion in sales for the 12-month period ending on September 30, 2023.

For Burger King, the acquisition represents a strategic maneuver as part of its “Reclaim the Flame” plan, geared towards accelerating sales growth and bolstering franchisee profitability.

Burger King US and Canada president Tom Curtis said, “Carrols has demonstrated strong and improving restaurant operations over the years.

“This acquisition is an exciting accelerator to our Reclaim the Flame plan that is focused on relentlessly pursuing a better experience for our guests.

“We are going to rapidly remodel these restaurants over the next five years or so and put them back into the hands of motivated, local franchisees to create amazing experiences for our guests.”

Carrols president and CEO Deborah Derby stated, “Today’s announcement is a testament to our more than 24,000 Carrols team members who have helped drive the company to record levels of profitability over the past 12 months.

“These results have allowed us, through this transaction, to deliver immediate and certain value to Carrols’ shareholders at an attractive premium to the company’s current and historical share prices.

“Additionally, we believe our team members will now have additional opportunities as part of the greater RBI family – in our office, in the field and especially in our restaurants, including for long-time managers who may want to become franchisees themselves.”

The acquisition follows a $400m investment by Burger King in September 2022, focusing on remodels, operations, marketing and technology enhancements.

Burger King intends to allocate $500 million for the renovation of 600 restaurants, utilizing Carrols’ operational cash flow. The remodeling efforts aim to achieve a contemporary image and are scheduled to take place over the five-year period leading up to 2028.

Carrols’ operators, in collaboration with Burger King’s operations teams, will jointly manage the acquired restaurants.

The restaurant chain’s long-term strategy involves refranchising the majority of the portfolio to smaller franchise operators within local communities.

Post franchising, which is expected to take five to seven years, Burger King will retain a strategic portfolio of two hundred restaurants.

Continue Exploring: Restaurant Brands International reports strong Q2 performance with 14% YoY growth and surpasses 30,000 restaurant milestone

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Mufti’s parent Credo Brands reports a 7.5% surge in Q2 net profit to INR 27.9 Crore

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Mufti

Credo Brands Marketing, the operator of the men’s casual wear brand Mufti, has reported a 7.5 percent increase in consolidated net profit after tax (PAT) at INR 27.97 crore in the quarter (Q2) ending on September 30, 2023. It disclosed a consolidated net profit of INR 26 crore in the same period last year, as mentioned in a regulatory filing.

In Q2 FY24, the company’s total income increased to INR 166.79 crore, compared to the total income of INR 143.63 crore recorded in the corresponding quarter of the previous fiscal year.

Additionally, as per the BSE filing, the company witnessed a rise in expenses to INR 129.82 crore in Q2 FY24, up from INR 108.74 crore in Q2 FY23.

Kamal Khushlani, Chairman & MD, Credo Brands Marketing Limited said, “Over the recent months, the retail sector experienced a slowdown owing to subdued consumer demand. Despite facing these external challenges, the company has successfully sustained its growth momentum. Moreover, some demand typically linked with the festive season has been deferred to the third quarter of this year, leading to comparatively lower growth for Q2 & H1 FY24.”

Khushlani further said, “We believe in providing a meaningful wardrobe solution for multiple occasions in a customer’s life, with our product offerings ranging from shirts to t-shirts to jeans to chinos, which caters to all year-round clothing.”

As part of its brand reinvention, the company has introduced a fresh Brand Identity, a revamped merchandise structure aimed at expanding its share of the customer’s wallet. This involves offering designs tailored for various occasions in the customer’s life, spanning from laid-back holiday attire, authentic daily casuals, and urban casuals to party wear and athleisure. Additionally, a new Retail Identity has been introduced.

The company plans to enhance its footprint by establishing new points of sale (PoS) and extending its Exclusive Brand Outlet (EBO) network in both current and additional cities and regions throughout India. Anticipating a surge in demand from both existing and new cities, the company foresees this as a catalyst for its growth.

Mufti additionally aims to bolster the brand recall of its products by expanding the footprint of its Exclusive Brand Outlets (EBOs) and implementing targeted marketing initiatives.

Continue Exploring: Mufti’s parent company, Credo Brands, reports robust 6.94x subscription in IPO

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HRAWI and Ingram Micro collaborate to drive digital transformation in hospitality sector

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HRAWI

The Hotel & Restaurant Association of Western India (HRAWI) has signed a Memorandum of Understanding (MoU) with Ingram Micro India, a subsidiary of the US-based Ingram Micro. The collaboration aims to jointly promote awareness of upcoming technologies among the association’s hotel and restaurant members. Ingram Micro specializes in assisting businesses in fully embracing the potential of technology.

According to a statement from the association, the partnership with the technology company will combine HRAWI’s significant presence in the hospitality sector with Ingram Micro’s diverse solutions portfolio, fostering cutting-edge advancements in technology and business practices.

Leveraging its extensive array of advanced and specialized solutions, including cloud services, mobility solutions, and IT asset disposal capabilities, Ingram Micro will play a crucial role in driving the digital transformation of the hospitality industry.

According to the strategic partnership framework, the collaborators will collaborate to develop technology seminars tailored for the association’s membership. These seminars and workshops aim to raise awareness among industry members about various topics, including data privacy issues, responsible e-waste disposal, and the transition to cloud-based technologies.

Ingram Micro India will assist in formulating and executing a comprehensive technology infrastructure for HRAWI members. The company will offer support in terms of procuring technology licenses, implementing cost-effective technology solutions, and ensuring due diligence in the overall process.

As per the official release by HRAWI, as part of the partnership, Ingram Micro India will also provide friendly financing and leasing options for technology purchase and deployment to association members.

Commenting on the collaboration, Pradeep Shetty, president, HRAWI, said, “The collaboration with Ingram Micro is a testament to HRAWI’s commitment to harnessing new-age tech solutions and expertise for the betterment of our members in the hospitality industry. By joining forces, we aim to co-create and lead technology seminars that will empower our members with the latest global advancements in the sector. It also aligns with our commitment to creating a global circular economy through responsible disposal and reverse logistics. The partnership is not just about technology; it’s about shaping the future of the hospitality sector through innovation, sustainability and enhanced business practices.”

Continue Exploring: India’s hospitality industry toasts to 2024 with high hopes and record-breaking revenue growth

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Disturbing discovery: Customer hospitalized after finding dead mouse in Barbeque Nation’s veg meal

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Rajeev Shukla

While visiting Mumbai, Rajeev Shukla, a man from Uttar Pradesh’s Prayagraj, ordered a meal from the popular brand Barbeque Nation on January 8 at the Worli outlet. However, little did he anticipate that this meal would lead to his unexpected hospitalization.

Moments after consuming a portion of his meal, Shukla stumbled upon a lifeless mouse in the vegetarian dish he had ordered. The shocking revelation left him aghast, and he soon fell ill, eventually requiring hospitalization.

Shukla took to X to share images of the receipt, the packaging in which he received the vegetarian meal box, and the disturbing discovery of a dead mouse in the dal. Additionally, he posted a picture of himself on a hospital bed.

In the post’s caption, he asserted that he had been hospitalized for more than 75 hours, expressing dissatisfaction with the limited assistance provided by the Mumbai Police. As of now, no FIR has been filed in connection with the case.

In a conversation with IndiaToday.in, Shukla detailed his “traumatic experience” and shared medical reports from the hospital where he was admitted on January 9.

I ordered a vegetarian meal from the online app of Barbeque Nation on January 8, but the food was contaminated. The veg meal box contained rice, sabzi (vegetable curry), dal, parathas, gulab jamuns and salad. I had the sabzi. The dal, however, tasted weird. As I dipped the spoon further in the container of the dal, I was shocked to find a dead mouse inside,” Shukla, a private teacher in Prayagraj, said.

He also claimed to have found dead cockroaches in the box of gulab jamuns, further intensifying the situation and causing him nausea.

“I called the Barbeque Nation customer care but nobody cared. Since I was feeling terribly sick, I vomited quite a number of times throughout the night,” Shukla told IndiaToday.in.

“I spent the night somehow. In the morning, the hotel staff arranged a cab for me. I went to Nair Hospital and was admitted immediately. Tests were conducted and I was treated for food poisoning. I was discharged on January 12,” he added.

“I also went to the Food & Drugs Administration in Bandra because police asked me to speak to them. FDA authorities said that a complaint has been registered but no action has been taken as yet. I went to the Nagpada Police Station on January 15 as well and was there till midnight. An FIR has not been filed as yet,” Shukla quoted further.

As Shukla’s post gained traction on X, Barbeque Nation took note of it and wrote, “Hi Rajeev. We regret any inconvenience you may have experienced. We believe Mr. Paresh from our Regional Office, in Mumbai is already in touch with you to understand the details of the situation and work towards a resolution.”

“We are committed to addressing your concerns promptly and effectively,” the brand in a separate tweet.

Continue Exploring: Indigo passenger’s unpleasant surprise: Live worm found crawling in veg sandwich

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Fortune Hotels plans expansion with 10 new properties and agreements in FY24, prioritizing tier-2 cities and leisure markets

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Fortune Hotels

Fortune Hotels, the mid-segment chain under ITC Hotels, is set to augment its presence with the addition of 10 properties and the signing of 10 new agreements in the fiscal year 2024. Demonstrating a steadfast commitment to growth, the company aims to extend its upward trajectory in the coming fiscal periods.

According to Samir MC, Managing Director of Fortune Hotels, the company anticipates the upcoming phase of growth to be fueled by the tier-2 cities and leisure markets.

“We have signed 10 new hotels so far in this financial year, bringing our total pipeline to 17 project hotels. We are having a good run from an opening perspective as well and have already opened seven hotels in this fiscal year till date. In addition to this, we are looking at opening at least 3-4 more hotels in this last quarter of FY24. In terms of Average Room Rates and occupancies, we expect a double-digit growth.”

Fortune Hotels’ Shift to Leisure Segment

Samir mentioned that the company has been experiencing growth in the tier-2 and leisure markets and expects this trend to continue for the company.

“We started off primarily as a business hotel brand, along the way, we identified that there is a potential in leisure, hence we started switching towards leisure.We’re currently in the high 30s in the leisure hotels and mid 60s for in the business segment. Our aspiration is to get to a 5050 mix between business and leisure hotels. So while we anticipate the metro cities to have potential, we also believe that there is tremendous potential in leisure segments as well as tier 2 markets, and that is where our growth will come from.”

Two decades ago, ITC Ltd launched a wholly-owned subsidiary, Fortune Park Hotels Ltd, to cater to the business and leisure segments. Today, the subsidiary has 67 signed alliances and approximately 5,000 rooms, spanning across 56 cities in the country.

When asked if the company is looking at accelerating the pace of growth, he said that “Yes, We probably signed 20-odd hotels in the last two years. We’ve opened 13 hotels over the last couple of years and that shows that we’ve embarked on a fairly faster pace of growth. And we anticipate that we will continue to open and sign hotels faster, just looking at the pattern plus the fact that we have 17 more hotels in the pipeline. I would say that the growth trajectory will be definitely a lot faster because now it’s also a conscious approach in terms of how we want to drive.”

Earlier last year, ITC Ltd made the strategic decision to demerge its hotel business.

“Our current mandate in this regard is to continue growing our relationships, maintaining a growth trajectory and continue with the asset-light model,” he said.

Continue Exploring: ITC board gives nod to hotel business demerger plan; listing expected in 15 months

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Jubilant Foodworks to acquire remaining 45.33% stake in DP Eurasia through 85.1 Million Euro open offer

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Domino's
Domino's

Jubilant Foodworks Ltd on Tuesday said it plans to acquire the remaining 45.33 per cent shares of DP Eurasia, the exclusive master franchisee of the Domino’s Pizza brand in Turkey, Azerbaijan, and Georgia, through an open offer priced at 110 pence per share.

In a regulatory filing, Jubilant Foodworks Ltd (JFL) stated that the open offer’s consideration could amount to 85.1 million Euros (approximately INR 769.54 crore). Currently, Jubilant Foodworks Netherlands BV (JFN), a wholly-owned subsidiary of Jubilant Foodworks Ltd, holds a 54.67% stake in DP Eurasia.

It has reached an agreement with independent directors of DP Eurasia on the terms and final cash offer for the entire issued and outstanding share capital of DP Eurasia not already owned by its subsidiary at a price of 110 pence per share.

“JFN proposes to acquire the ordinary shares of DP Eurasia at a price of 110 pence (equivalent to EUR 1.28) per ordinary share which represents a premium of approximately 15.2 per cent to the closing share price of 95.5 pence per DP Eurasia Share as on January 15, 2024,” it said.

The aggregate purchase consideration for the remaining 45.33 per cent stake shall be up to 85.1 million Euro (around INR 769.54 crore), JFL added. “The open offer will now also be the recommended offer by Independent Directors of DP Eurasia and final offer from JFN for the shareholders,” regulatory updates from Jubilant Foodworks Ltd (JFL) said.

JFN has received irrevocable undertakings to accept the increased offer by shareholders of DP Eurasia representing approximately 30.3 per cent of shareholding, it added. After closing of the offer on January 31, 2024, JFN after having “expectedly acquired” more than or equal to 85 per cent shareholding in DP Eurasia, said it would be able be “fulfil one of the key objectives of open offer to effect the delisting of DP Eurasia from London Stock Exchange.”

“The Independent Directors of DP Eurasia agree with JFN that the success of the DP Eurasia business may be better served through private ownership and therefore support JFN’s intention to delist DP Eurasia,” said JFL.

To finance the acquisition, JFN plans to utilize a blend of the current term-loan facility obtained from HSBC, supported by a corporate guarantee issued by JFL. Additionally, JFN intends to secure a fresh long-term facility from HSBC, once again reinforced by a corporate guarantee that will be provided by JFL in favor of HSBC, as outlined in the filing.

“The company has been and will be able to leverage its experience as India’s largest foodservice company to assist DP Eurasia with its growth plans so that it can achieve its potential,” said JFL.

On November 28, JFL announced its intention to acquire an additional 51.16 percent interest in DP Eurasia NV, with a potential value of up to EUR 73.36 million (approximately INR 670 crore). At that juncture, JFL already possessed 48.84 percent of the ordinary shares of DP Eurasia. The latter, along with its subsidiaries, provides pizza delivery and takeaway/eat-in services through its 694 stores (comprising 678 in Turkey, 10 in Azerbaijan, and 6 in Georgia as of October 31, 2023).

Continue Exploring: Jubilant Foodworks to strengthen pizza market grip with major stake increase in DP Eurasia NV

JFL, part of Jubilant Bhartia Group, is India’s largest QSR (quick service operator). It has the exclusive master franchise rights from Domino’s Pizza for India, Sri Lanka, Bangladesh and Nepal. Besides, it also has rights for Dunkin’ restaurants in India and Popeyes restaurants in India, Bangladesh, Nepal and Bhutan. JFL also has its owned-restaurant brand Hong’s Kitchen.

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PepsiCo India rides high on in-home consumption trend, records highest product launches since 1995

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PepsiCo
PepsiCo

PepsiCo India, a prominent player in the beverage and snacks industry, has diversified its food portfolio with several launches over the past two years. This expansion was driven by the increased in-home consumption trend during the pandemic, which has continued for the brand.

Earlier this month, the leading fast-moving consumer goods (FMCG) company introduced three new variations within its Quaker Oats brand.

Last year, the company unveiled four new releases and introduced seven diverse variants in its snacks and chips portfolio.

In 2022, the company introduced five new launches and unveiled eight flavors within the same space.

This marked the highest number of product launches by the company since 1995, the year it introduced the Lay’s brand.

The company explained that the surge in launches was prompted by the increasing demand for snacks and chips amid the pandemic.

PepsiCo India president Ahmed ElSheikh said, “This promises to be India’s decade for sure, and at PepsiCo India we are excited to participate in this incredible journey the nation is undergoing. The Indian consumer is ever more discerning, and the exciting shifts in consumer behaviour have propelled us to keep innovating. 2023 marked further investment and expansion for PepsiCo India across foods and beverages portfolio.”

“We are very proud to have commenced work on our greenfield foods manufacturing facilities in Assam while our partners are also in expansion mode as they continue to set up facilities across the country. We are very bullish on the Indian growth story and will continue to keep in step with it through our investment plans,” he added.

Sravani Babu, the Associate Director and Category Lead for Quaker Oats, said that although oats as a category is still in its early stages compared to other FMCG categories, it is experiencing double-digit growth.

Continue Exploring: PepsiCo’s Quaker brand eyes wider reach and market share with new instant oats lineup

“Flavour oats is still a nascent category and is growing at double-digit growth. Base oats category continues to be the leading segment in the category. With this launch, we are looking at occasions which are breakfast and beyond,” Babu explained.

She mentioned that while the company has currently launched these three flavors, there are plans to expand and diversify its portfolio of offerings.

Looking ahead, Babu mentioned that there are additional launches in the pipeline.

In August 2022, the company introduced multigrain oats as one of the five launches made during the year.

E-commerce and Quick Commerce Boosting PepsiCo India’s Reach

Saumya Rathore, the Category Lead for potato chips at PepsiCo India, mentioned that the patterns of in-home consumption shifted during the pandemic. Additionally, with quick commerce gaining traction, it has further fueled demand.

“Consumer habits take decades to evolve but the pandemic has crunched that,” Rathore explained.

Rathore and Babu also emphasized that both e-commerce and quick commerce are contributing to the expanded penetration of snacks in the country.

Aligning with the changing consumption trend in foods, PepsiCo India announced its first food manufacturing plant in Nalbari, Assam, with an investment of INR 778 crore ($95 million). This unit, spanning 44.2 acres, is set to be operational by 2025.

Similar to PepsiCo India, other major players such as Amul and ITC have maintained an aggressive stance on product launches, particularly during and following the pandemic.

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Italian restaurant chain Prezzo to launch takeaway outlets in UK train stations

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Prezzo

Prezzo, the Italian restaurant chain, is gearing up to enhance its footprint in the UK. According to the Daily Telegraph, the company is set to introduce a new line of takeaway pasta and pizza shops at train stations.

Its goal is to rival well-established brands such as SSP’s Upper Crust and Pret A Manger in the competitive market.

The strategic move is in response to the challenges faced by traditional sit-down dining establishments, which have been under pressure due to inflation and the cost of living crisis.

Prezzo CEO Dean Challenger was quoted by the Telegraph as saying: “Train stations have options like Upper Crust, KFC, Burger King – but there’s nothing available at a slight level above these. I think there’s a gap there.”

Founded in the year 2000, Prezzo underwent substantial expansion during the casual dining boom in the late 2010s, achieving a milestone of 300 restaurants across the UK.

However, the current economic conditions have severely impacted the chain, resulting in the closure of 46 establishments and the unfortunate loss of 700 jobs in the year 2023.

Having scaled down to 96 locations, the company views the introduction of the new Prezzo Pronto takeaway concept as a chance to expand its footprint to 120 outlets.

Challenger mentioned that the plans are in their initial phases, as the company delves into the transition away from conventional sit-down dining.

The Prezzo Pronto menu is designed to meet the growing demand for fast and convenient dining choices. It will feature takeaway pasta and pizza slices, both of which have demonstrated popularity in the US market.

Despite its recent downsizing, the company is optimistic about potential growth through the Prezzo Pronto initiative.

The objective of the new stores is to draw in customers who are already engaged in shopping or other activities.

“We’ve got a model that works because pasta and pizza are relatively quick,” Challenger stated. “Any new sites that we look at will be in high footfall areas where people are looking for a brand they know.

“Shopping centres normally prefer to use chains because of the brand recognition – there’s less risk – and there will always be a space for casual dining brands wherever there are tourists.”

Continue Exploring: Popular pizza chain Papa John’s set to close dozens of UK locations amid rising cost

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