UK

Famous Brands operates the Casual Dining Restaurant brand Wimpy in the UK.

Trading conditions

The year 2023 has been challenging for the UK due to the impacts of the Russia/Ukraine war with the uncertainty of oil and gas supplies and a cost of living crisis, which deepened during the course of the year. This crisis eroded consumer confidence and spending.

Inflation rose sharply, reaching 11% in October 2022 before retreating slightly by year-end. Interest rates increased from 0.5% in February 2022 to 4% in March 2023. Electricity costs skyrocketed, with small businesses facing between 300% to 400% price rises, on the back of 100% in the prior year. Government action, in the form of price caps and subsidies, did mitigate some of this impact, but the pressure will likely return when government support reduces in 2024. Supply chain disruptions continued in 2023, resulting in inventory shortages and major input cost increases.

Performance and focus areas

The UK recorded revenue of R142 million (2022: R133 million), and operating profit improved 13% to R19 million (2022: R17 million) before an impairment. The operating margin for the year was 13.4% (2022: 12.8%) before the impairment.

Wimpy UK franchise partners face unprecedented pressure on the viability of their businesses. The general decline in retail spending resulted in a significant drop-off in delivery channel sales, including a decline in third-party aggregator sales. However, in-store sales did not decline to the same extent. To protect gross profit margins, two menu prices were implemented in 2023, compared to the typical annual increase.

By year-end, 73% of the Wimpy UK network has been revamped to the newer SHIFT design, which features bright colours, new comfortable seating and energy-efficient lighting.

The Wimpy management team worked hard to mitigate food product shortages and secure the best pricing for our franchise partners.