Caffe Nero has become the latest high street coffee chain to seek rent cuts from landlords amid tough new restrictions that could hamper the hospitality sector’s recovery from COVID-19.
Sky News has learnt that Caffe Nero, which operates 660 stores across the UK, has appointed KPMG to review options relating to its property portfolio.
More than 90% of the chain’s outlets have reopened since the coronavirus lockdown ended in June, with about 30 sites having remained shut since then.
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KPMG is understood to be working with the chain, which is owned by Gerry Ford, on a range of possible options, which analysts say are likely to include mechanisms that would enable rent cuts and possible limited store closures.
Caffe Nero is understood to have been performing strongly prior to the COVID-19 crisis, employing about 5000 people and serving 135 million customers annually.
The slower-than-expected return to offices in city centres has had a severe impact on many of Caffe Nero’s rivals, including Pret a Manger and Costa Coffee, which between them have announced plans to make more than 4500 people redundant in recent weeks.
One source said 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.
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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 company declined to comment specifically on the prospect of any store closures.