The company said that they are making a loss so will have to cut a mix of part time and full jobs around the UK. The cuts will leave the company with about 1,500 staff.
The firm blamed the location of the branches and the weak economy for their poor performance. It also doesn’t help that the cost of supplies and restaurant insurance has increased over the years.
The company has said that it would work to help find alternative employments where possible for those losing their jobs and affected by the closures.
Little Chef, chairman Graham Sims told the BBC, “We’ve got 161 sites, some very good, very profitable. Others suffer from a series of problems including high rents and demographic changes. I decided to make a strategic decision not to focus on those sites.”
Private investment business RCapital bought the majority of Little Chef when they went into administration in 2007.
The firm has had to react to increasing competition from coffee chains and high street supermarket at service stations by revamping its branches.
CEO of marketing company G2 Joshua, Tim Hipperson, said “Motorists’ tastes have altered dramatically since the launch of Little Chef back in the late 1950s and they now expect far more than just sustenance, they require a whole customer experience, which their favoured High Street brands can offer.”
Heston Blumenthal also gave some Little Chef branches an overhaul for a reality TV show in 2008 and the company rolled out the “new concept” model to its other branches.
Little Chef will have to diversify to compete, says Sims, who joined the company 3 months ago after being the head of BP’s UK retail division.
He said, “I can move Little Chef from being just a sit-down [restaurant] to one that combines sit-down with takeaway and also a retail offer. That sort of hybrid retail solution enables me to talk to other brands to bring them in to our properties.”
The company has been sold to a number of firms including Granada and Compass since its formation in 1958.
It was bought in 2006 before entering administration, by Simon Heath, its then chief executive and the Peoples Restaurant Group.
The company has been criticised by unions, for not protecting jobs.
GMB senior officer, Paul Maloney, said “This is dreadful news for the employees in these restaurants due for closure”
RCapital have been accused of increasing the costs at the business by selling Little Chef stores and then renting them back. However Sims denies the claim. He said, “These sites were acquired by RCapital in 2007 and they were acquired as leaseholds. Someone before that had sold them and leased them back.”