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Despite recent international launches from NYC to Milan, Neat Burger has announced the closure of half of its UK restaurants after losses grew by 145% last year.
The chain backed by the popular Formula One star, who has followed a vegan diet since 2027, will see four of its London sites shut before Christmas, while plans for four new locations have been shelved too.
Neat Burger, the fast-food chain backed by the likes of Lewis Hamilton and Leonardo DiCaprio, has faced a financial setback amid its expansion drive, with low footfall and increased losses forcing it to shut five of its stores in London (its grab-and-go concept has already been shut), halving its UK footprint.
Of Neat Burger’s nine UK sites – all in London. spread across Camden, Soho, Oxford Circus, Wembley, Canary Wharf, Victoria, Stratford, Liverpool Street and Dalston – the Oxford Circus (its debut location opened in 2019), Canary Wharf, Westfield Stratford and Liverpool Street are set to close, with the Dalston grab-and-go location (opened this August) already shut.
Neat Burger had planned three new locations in Queensway, Waterloo and King’s Road – as well as one in the O2 Arena – but these have now been shelved. The lease for the O2 Arena site, which was worth £100,000 annually with a 20-year commitment has been surrendered to the landlord, while the remaining lease term for the Dalston store – 12 years left on £45,000 annually – has been assigned to a third party.
Neat Burger’s closures driven by 145% loss
The decision to close the stores and scrap plans for new ones comes after Neat Burger posted a £7.85M loss for the 2022 financial year, up 145% from the £3.2M loss reported in 2021. “As with any dynamic growing business, we’re constantly changing and adapting to the market, and so as part of our ongoing strategy, we are announcing the consolidation of four of our London operations,” the company told Restaurant Online (this is not counting the Dalston grab-and-go location).
“This decision is driven after an analysis of our consumer data and the shift towards hybrid work, leading to a natural decrease in footfall at some of our larger restaurants,” it added.
This is echoed in the statement by company co-founder and managing director Zach Bishti in its yearly accounts, where he noted that 2022 began as the UK faced another pandemic-induced lockdown due to the Omicron variant, though “a turbulent Q1 gave way to a steady recovery in trading during spring and summer”.
He explained that the nature of sales had changed compared to pre-pandemic, with Monday and Friday footfalls in London’s financial district and West End dropping with the rise of work-from-home. Plus, the demand for home delivery – which surged in 2021 due to lockdowns – declined, and this led Neat Burger to shutter its delivery-only kitchens.
“In light of changing work habits, the directors have identified that future expansion of the corporate estate should focus on smaller, compact units situated in high-footfall areas,” wrote Bishti.
International expansion among a turbulent time for UK vegan sector
Neat Burger secured $18M in Series B funding earlier this year, taking total funding to $100M, according to the Financial Times. Over the past few months, the chain has been accelerating its international expansion, with new sites in New York City and Milan joining its existing London and Dubai stores. The chain had announced plans to open another store in the Big Apple.
Bishti alluded to this in the company’s filing, stating: “International expansion remains a key strategic objective for the group, with our inaugural New York restaurant having opened in April 2023.”
At the time of the Manhattan store opening, Neat Burger CEO Tommaso Chaibra said: “With the successful launch of our New York location and record first quarter under our belt, we have demonstrated the strength of our brand, and are now well-positioned to bring our award-winning plant-based food to the growing number of consumers in the US and worldwide who are embracing a healthier and more flexitarian lifestyle.”
But according to This is Money, the restaurant group told staff that the company’s “future is at risk” now, and redundancies are being lined up.
“The last four years have been a roller coaster for any hospitality business. We’re facing macro pressures that we’re seeing reflected across the industry, and the strongest brands are having to adjust their sails to account for increasing energy costs, food price inflation and compounding interest rates,” the company told Restaurant Online.
Neat Burger’s decision is reflective of the overall decline of the UK’s vegan market. According to industry think tank the Good Food Institute (GFI) Europe, plant-based sales declined by 3% between 2021-22 in the UK, with meat analogues dropping by 8% in the same period. Meat alternatives brand Meatless Farm was rescued from administration by fellow British player VFC, while mycoprotein giant Quorn reported a £15.3M loss in its yearly accounts, citing (like Neat Burger) post-pandemic inflationary pressures as part of the reason.
But this trend isn’t restricted to retail – a number of vegan restaurants have closed too. Fast-casual chain Clean Kitchen Club permanently shut its Notting Hill location in London in February, for example, while Flower Burger exited the UK market in September and Edinburgh’s Harmonium closed in April. In north England, V Rev, JJ’s Vish and Chips, Zad’s (all Manchester), Frost Burgers (Liverpool) and Donner Summer (Sheffield) all shut last year as well. In fact, earlier this month, popular vegan restaurant V Or V also announced it is closing.
“We believe that sometimes, taking a step back is necessary to make a bigger leap forward,” Neat Burger told Restaurant Online. We remain deeply committed to our mission of providing delicious, sustainable, plant-based dining, and are excited about our future growth prospects.”
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