Apr 30, 2019

PizzaExpress feels heat from Chinese expansion as costs hit home

Casual dining chain PizzaExpress's plans to expand in China to offset flat sales at home have been hit by higher costs as it seeks to keep up with rapidly changing habits. The 54-year-old pizza brand said on Tuesday that "Intensifying competition from local brands" in China, which include Origus Pizza Buffet and Peking Pizza, and "Rapidly changing consumer demands" there had proved more of a challenge than expected. Investment in its international expansion hit earnings before interest, tax, depreciation and amortisation, which fell 15.3 per cent to £80.2m in the 52 weeks to December 30. "We remain negative on their Chinese expansion," said Jefferies analyst Stephen Lienert, adding that their pizza is about 30 per cent more expensive than at rival Pizza Hut. Chinese private equity group Hony Capital bought PizzaExpress for £900m in 2014, soon after it opened its first restaurant in Beijing.

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