Caffe Nero hires KPMG 'to review options' including rent cuts and store closures

Caffe Nero has become the latest hospitality giant to seek rent cuts from landlords as the high street struggles to recover from lockdown.

The coffee chain, which operates 660 stores across the UK, has appointed KPMG to review its store estate.

Around 90% of the chain's outlets have reopened since the coronavirus lockdown ended in June, however 30 stores remain closed with no reopening date.

The chain is understood to have hired KPMG to review a range of options including rent cuts and possible store closures.

Caffe Nero, which has around 5,000 employees in the UK, is owned by businessman Gerry Ford.

The company was founded in 1997, and last year recorded profits of more than £23million.

One source told Sky News that Caffe Nero executives had been engaged in "constructive dialogue" with landlords but needed to intensify talks as the company seeks to address its fixed cost base.

When approached by Mirror Money, the company refused to comment on store closures.

A spokesperson for Caffe Nero said: "It has been a difficult period since lockdown measures were introduced by the government and we're working incredibly hard to navigate our way forward.

"As part of this, we are working closely with advisors to help review our options and assist with our ongoing negotiations with landlords."

The chain is one of dozens of hospitality businesses struggling to recover from lockdown amid warnings Britain could be heading for a second spike.

Rival chain Costa last week said 1,650 staff are at risk of redundancy as it looks to cut costs amid continued uncertainty over when trade will fully recover.

It told staff on Thursday that it has started consultations which could impact more than a tenth of roles.

Costa closed nearly all of its 2,700 UK stores for six weeks during the pandemic but had now reopened around 2,400 sites.

The Coca Cola-owned chain said trade is "returning" after being boosted by the Government's VAT reduction on food and non-alcoholic drinks and the recent Eat Out to Help Out scheme.

However, it said the proposed job cuts had been driven by "high levels of uncertainty as to when trade will recover to pre-Covid levels".

Neil Lake, managing director for Costa Coffee UK and Ireland, said: "Today's announcement to our store teams was an extremely difficult decision to make.

"Our baristas are the heart of the Costa business and I am truly sorry that many now face uncertainty following today's news."

The move comes a week after rival Pret A Manger revealed it was slashing 2,800 roles as part of a restructure of its UK business.

The company said it's "slowly recovering" from the coronavirus lockdown, but warned it's lost almost a decade of growth to the crisis.

Pret a Manger chief executive officer Pano Christou said the company is "gutted" at the decision to cut staff.

"I'm gutted that we've had to lose so many colleagues," he said.

"Although we're now starting to see a steady but slow recovery, the pandemic has taken away almost a decade of growth at Pret."