Nando’s set for further cost pressures after sliding to loss

Nando’s has said increased cost pressures will impact its performance this year despite “strong” demand from customers.

It came as the chicken chain dropped to a loss for the past financial year after facing increased energy, labour and food costs.

But boss Rob Papps stressed that the company’s performance was “positive” in the face of a challenging backdrop for the sector.

“The macroeconomic environment remains uncertain, and we are mindful of the pressures facing both our business and our customers,” he said.

“Nevertheless, we remain confident in our model and the long-term opportunity across all our markets.”

Nando’s opened 11 restaurants in the UK and Ireland over the past year (Nando’s/PA)

In freshly filed accounts, Nando’s said sales continued to grow over the six months to August this year, driven by robust consumer demand, but flagged that the “operating environment remains challenging”.

It said some commodity prices have eased but cost pressures are broadly “elevated” due to geopolitical conditions and sustained global inflation.

Bosses stressed that the group is actively managing the impact of cost pressures through initiatives in its markets, such as rolling out energy efficient grills in the UK and Ireland.

It comes after Nando’s recorded an £11.3 million pre-tax loss for the year to February, falling from a £38.2 million profit a year earlier.

Meanwhile, revenues increase by 2% to £1.51 billion for the year, according to the Companies House accounts.

The performance was supported by £116.6 million of capital investment, helping support the group’s continued expansion plan.

Nando’s opened 34 new restaurants over the year, with 11 in the UK and Ireland, taking it to 984 sites by the end of the year.

The firm said it plans to open further sites this year despite the challenging market conditions.

Mr Papps said: “We are planning to open 15 new restaurants in the UK and Ireland this year, and in Australia, our drive-thru format has been a strong performer and continues to give us valuable learnings as we consider new formats.

“Alongside improvements to our digital experiences and menu innovation, these investments position us well for the future.”