PizzaExpress says sales still falling

Shares in PizzaExpress slumped 12 per cent yesterday after the former darling of the restaurant sector revealed that sales were still falling.

In a trading update for the three months to 22 September, the group said like-for-like sales of its familiar Sloppy Giuseppe and American Hot pizzas were 4.4 per cent lower. The company has seen its status as a pizza icon crumple this year amid increased competition from rival groups such as Ask Central and Signature's Strada.

David Page, the chief executive, said trading had shown "no improvement", with sales in its central London sites worst affected.

PizzaExpress said last month that it would plough £13m this year and £11m the year after into an intensive refurbishment programme aimed at its tired London sites. About 80 outlets will be spruced up over the next two years, most of which are inside the M25 where the group makes the bulk of its profits.

Andrew Saunders, an analyst at Numis Securities, said the news was "not the best of starts" and warned that the risk of further downgrades to his pre-tax profit forecast for 2003 of £35m remained "if the rate of decline in like-for-like sales is not arrested". Forecasts for this year have already been slashed from about £52m.

The group is trialling some menu changes but its problems go beyond that – it has suffered from a collapse in tourist numbers.

Its shares, which traded at 921p in January, fell 34p to 247p.