German Doner Kebab reveals plans for Preston takeaway in £6m expansion

Restaurant chains across the country have faced rising costs and a decline in consumer confidence, with Jamie's Italian the latest victim after it collapsed into administration earlier this week.

But bosses at German Doner Kebab say the firm's biggest problem is finding new restaurants sites fast enough to match its ambitions - with Preston on the list of places it plans to move into.

The chain, which already has 33 sites across the UK, said it will open a new restaurant every week for the rest of 2019 in a move which will create around 200 jobs.

German Doner Kebab chief executive Imran Sayeed said: "The hardest thing for us is finding sites. I think we could open another 40 or 50 sites this year because of demand, but we have to take the time to make sure the locations are right.

"By the end of this year we will hopefully be near to 50 in the UK, and I think we could be looking at 300 in the next five years.

"I think our success highlights the shift to fast-casual dining. Millenials and Generation Z want something different, and our product offering and price point fits in with what they want."

The boss said he was sad to see the collapse of Jamie's Italian but admitted that the firm could be "open" to looking towards the company's closed sites as potential locations further down the line.

The kebab chain will invest £6m to open 14 new sites throughout the year in locations including Preston, Oldham, Bradford, Northampton, Walsall, Newcastle, Edinburgh and Aberdeen.

German Doner Kebab was founded in Germany in 1989 but was launched in the UK in 2016 by United Brands under a franchise model.

The UK brand's rapid growth comes amid a turbulent time for restaurant chains, with numerous undergoing fierce restructuring programmes to fight against widening losses.

The collapse of Jamie Oliver's restaurant group, which saw 22 of his 25 outlets close immediately after administrators Deloitte were hired, followed financial turmoil at a number of other chains.

Italian restaurant group Carluccio's closed 35 restaurants last year as part of a Company Voluntary Agreement last year, while pizza chain Prezzo announced plans to shut 93 outlets.

The UK's 100 largest restaurant groups together made a £82 million loss last year, sliding from a £102 million profit the previous year.

In 2018, 48 of the 100 businesses were loss-making, up from 37 a year earlier, according to data from accountancy group UHY Hacker Young.

Peter Kubik, partner at UHY Hacker Young, said: "Restaurant groups are having to undergo radical restructuring surgery just to stay afloat.

"Cutting down the number of branch chains is financially stressful for restaurant companies but in the long term it is essential they get to the right size."