Monopolistic Competition - Prezzo to close one third of their stores

Restaurant chain Prezzo is closing 46 stores as it grapples with cost increases brought about by the current economic environment. It seems that the cost of living is starting to bite in the hospitality sector, and this might have further ramifications for the High Street.

It's also worth thinking about how the market structure of the sector will have contributed to this: Prezzo operates in a monopolistically competitive market, and, in all likelihood this means that they've probably got small profit margins. As a result, significant price increases will be particularly troublesome.