Forecourt giant set to gobble up Little Chef

Fuel forecourt giant Euro Garages is poised to takeover retro roadside favourite Little Chef, according to reports.

The company, owned by brothers Mohsin and Zuber Issa, merged with EFR in October to create a €6bn group.

The company has wasted no time in using its newly found and considerable financial clout as it is in “advanced talks” to buy the brand and its restaurant portfolio from Kout Food Group.

The Kuwaiti company bought Little Chef for £15m in 2013 but has struggled to turn around the fortunes of the roadside restaurant chain, which has just 70 sites remaining from a peak of 450 in 2000.

It is understood that once the deal is complete, each Little Chef site will be assessed individually, with some sites potentially being rebranded – Euro Garages has partnerships with the like of Starbucks, Subway, Greggs and Burger King.

An unnamed source told The Sun that Little Chef employees have been informed, adding: “All the assets from Little Chef will be transferred to Euro Garages and all their terms and conditions will remain the same – meaning they will still be employed in their current roles.

“Staff are worried that Euro Garages don’t operate their own brands – they only operate partner brands. They fear this could mean the end for what is an iconic brand.”

Before the EFR merger deal in October, Euro Garages had 338 sites across the country, with just 25% of profits coming from fuel. Its trick has been to offer partnerships with retailers, including Spar and Subway, to allow motorists to grab groceries or a bite to eat at the same time as refuelling their vehicles and it last year it started a pilot of Sainsbury’s convenience stores.

Euro Garages’ turnover was £815.6m, with pre-tax profits of £34.8m in the year to July 2015. Fuel accounted for around £674m of turnover, while retail and food sales were £141m.

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