Another Burger Chain Is In Serious Trouble

Gourmet Burger Kitchen (GBK) is in danger of going the way of fellow mid-market high street chains Byron, Jamie’s Italian, and Carluccio’s. Like-for-like sales in the 22 weeks to 29 July 2018 fell 10.6 percent, compared to a 2.6 percent decline in the same period last year, as revealed on a voluntary performance statement by parent company Famous Brands. System-wide sales decreased by 6.4 percent in that 22 week period, compared to a 12.1% percent increase last year. A separate announcement referred to the company “considering options related to a subsidiary,” believed to be GBK, as reported by Big Hospitality.

The statement reflected on the company’s market performance, saying:

“Difficult trading conditions persisted across all our markets during the review period, with common features including intensified competitor activity and margin pressure in the context of economic hardship.”

GBK was founded in 2001 with backing from Providores owner Peter Gordon, before a 2010 buyout from Yellowwoods which prompted rapid expansion. In the context of that expansion, the chain’s offering has received too little innovation — a problem that Byron tried to solve, too late. While competitors with more progressive offerings have grown steadily and newer chains with more defined propositions have also thrived, GBK has remained stagnant. Now, the restaurants are paying for it.