Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

MAKING a living in the hospitality sector is no picnic - for workers or the companies they work for. This is a seriously troubled sector and its problems began long before the pandemic went on to (and continues to) wreak havoc on restaurants up and down the country.

A glut of mid-range, some might say mediocre, offerings on the high street at a time of collective financial belt-tightening among diners, saw the appetite for dining out on the wane and there was little the likes of Pizza Express, ASK and Carluccio’s could do, other than trim the fat or shut up shop altogether.

So, rare good news from Barclaycard of a slight but positive uptick in spending at restaurants, for the first time in almost 18 months, is cause for celebration. And very good news for The Restaurant Group (RTN) which, as its name suggests, lives or dies on the success or otherwise of the various eateries in its chains.

This time last year the group operated over 350 restaurants and pub restaurants, making it one of the largest restaurant operators in Britain. And the fact that it had around 22,000 staff on furlough gives you an indication of just how torrid a time Restaurant Group has had.

Forced to shut 60 of its Chiquito Mexican-style outlets as well as its Food & Fuel chain of pubs in London after falling into administration, closures and job losses have mounted. It was forced to turn to shareholders earlier this year to raise £175 million to guard against a resurgence of the pandemic and improve its delivery business after losses of £127 million last year.

On Wednesday, when it posts interim results, we will see how it is faring now, post reopening, post ‘pingdemic’ and in the midst of supply chain shortages. Shareholders will need strong stomachs.

But Restaurant Group has one stand-out performer, in the shape of Wagamama, which could well prove to be its saving grace. Immediate post-lockdown reopening showed footfall was straight back to 85% of comparable 2019 figures, and average delivery and takeaway sales have jumped between 3 times and 5.5 times higher than pre-Covid. If Wagamama has kept that up then shareholders will have their patience and their investment rewarded.

More on The Restaurant Group

Important information: Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.

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