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How
innovation can help the sector continue to grow
Richard Lambert, director general
of the Confederation of British Industry (CBI), recently said: "When
times get tough, firms want to stick to what they know best rather
than try out new ideas. But the services sector contributes
three-quarters of the UK's economic activity, so its continued
dynamism is a matter of vital importance."
Lambert's comment came after a
joint report by the CBI and Qinetiq showed that businesses in the
services sector that take risks and try new ideas even during an
economic slowdown are often more likely to succeed.
The growth and subsequent
innovation of the food-led pub sector, in line with the introduction
of the smoking ban, has also highlighted the need for restaurant
operators to incorporate new ideas and marketing techniques.
While the majority of companies
in the UK restaurant sector are keeping their powder dry, doing all
they can to make sure profit targets are met and, quite literally,
that there is food on the table, others are being bold and innovating
in an attempt to generate sales and growth during challenging trading conditions.
However, innovation can be a
risky step. For every Gourmet Burger Kitchen success story there is
invariably a failed-to-take-off Jo Shmo's warning.
Established
operators
It's much easier try something
different when you are already the operator of a number of well-known
brands. Although still a risk, financial backing, established
reputation and experience can all help with the launch and rollout of
a new concept.
The Tragus Group, the operator of
established high-street brands Café Rouge, Bella Italia and
Strada, has already proved that it can successfully launch a new
concept with the continued rollout of its fledgling Spanish tapas
concept Ortega, which currently stands at seven outlets.
In April this year, the company
unveiled its latest idea - Huxleys Bar & Kitchen - a British bar
and brasserie concept - at Heathrow's new Terminal 5 building.
Reportedly producing weekly sales of £60,000, it is unsurprising
that Tragus is now thought to be considering opening further sites
under the brand, with more airport locations, plus pub units and high
street locations seen as possible targets.
Gondola Holdings, the operator of
Pizza Express, Ask and Zizzi, has already had its hands burnt when it
comes to new concepts with Jo Shmo's, its American diner brand, set
to be taken off the market after only growing to three sites over the
last eight years. However, its replacement, Byron, a new casual
dining burger concept, is already set to match that figure after just
a year.
Launched in February this year in
Kensington, London, critics have been effusive in their praise for
Byron, with The Times restaurant critic Giles Coren declaring it
served "probably the best burger I have ever had".
The company is now set to convert
two of its former Jo Shmo's outlets in Guildford and Kingston-upon-Thames
to the new brand, while it is also looking at other locations for
the concept.
Alan Yau, the founder of
Wagamama, has launched not one but two new concepts over the last 12
months - a fine-dining concept called Hakka Berkeley, and a fast
casual dining experience called Cha Cha Moon.
The operator of the Busaba Eathai
brand, who is set to unveil his new fine dining concept next year on
the site of the old Café Grand Prix site in Berkeley Street,
launched Cha Cha Moon in Soho in May. Yau, who sold his
Michelin-starred restaurants - Hakkasan and Yauatcha - to Tasameem,
the property arm of the Abu Dhabi Investment Authority for £30.5
million in January, believes Cha Cha Moon has the rollout potential
of Wagamama, which currently has an estate of 59 sites in the UK and
circa 30 outlets overseas.
Jamie Oliver maybe a household
name for his cooking exploits, his "15" restaurants and
school dinners campaign, but he has also decided to enter the casual
dining sector with the launch of the Jamie's Italian brand, which
made its debut in Oxford in May. The high-profile chef is set to open
further sites in Bath and Brighton as part of plans to launch up to
40 outlets for the new concept, with 20 scheduled to be operating
over the next five years.
Paramount Restaurant Group, which
operates the Chez Gerrard brand, has launched a casual dining version
of its Bertorelli brand called Il Bertorelli. The first trial site
under the new brand, which according to the company is "a
slightly more value conscious offering for the mass market than the
original concept", opened in June in London's Blackheath.
Paramount is believed to waiting to evaluate the success of the trial
site before considering a rollout.
Fresh
approach
Although the current economic
climate is not altogether conducive to launching an innovative brand
from scratch, a number of new companies have decided that 2008 is the
right time for them to unveil their new offerings to the sector in an
attempt to be the next Leon or Eat.
Cote Restaurants, which was
founded by the former management team that developed and grew the
Strada brand, opened its first site under its new French bistro
concept in Wimbledon Village last autumn. Backed by Richard Caring,
the clothing entrepreneur, the company has already grown to three
restaurants with a further three planned for this year.
Gourmet Hotdog Company launched
its first outlet in February this year in London's Soho district. The
brainchild of Mark Yates, who was previously behind the launch of The
Real Greek, Livebait and Break for the Border, a second outlet is
planned for Oxford Street, with a third to follow near Spitalfields
Market. Backed by 13 private investors, long-term plans for the
concept include overseas franchising agreements.
UP Box was launched in April this
year by Nick and Ines Alfille, the owners of the Up and Out catering
company, in Ludgate Circus, London. The concept, which stands for
Urban Picnic, serves bento-style breakfast and lunch meals aimed at
City workers. The couple plan to rollout the concept to more London sites.
Ponti's, the Italian coffee shop
operator, made its first move into the casual dining market in March
with the launch of its first Ponti's Italian Kitchen in Duke Street,
London. The company plans to open a further site in the West End
before the end of the year.
Da Scalzo is a new art café
venture from Enzo Scalzo, one of the co-founders of Patisserie
Holdings, which is set to open its first outlet in London's Belgravia
at the start of September. The new casual dining concept will serve
breakfasts, pre-theatre dinners and feature a champagne bar.
Mini-mes
Small may be beautiful but it is
also the perfect way for many established operators to take their
high street concept to parts of cities it would usually not reach,
while at the same time raising brand awareness.
Pret A Manger, the sandwich and
coffee bar chain, which was acquired by Bridgepoint Private Equity in
a deal believed to be worth £345 million earlier this year,
launched its first kiosk site late last year in the Palisades
Shopping Centre in Birmingham. Based on the old US air stream
trailers, it is believed that the company is targeting shopping malls
and transport hubs as possible locations for the new concept.
YO! Sushi, the Japanese
restaurant chain, originally launched its YO! To Go kiosks in London
in 2006, only to close them after the concept suffered teething
problems. It relaunched the concept, which is designed to be an
extension of the group's restaurant format without the conveyor
belts, in Liverpool Street and London Wall, late last year.
Giraffe, the world-themed
restaurant chain, which operates 23 sites in the UK, introduced its
new Fresh Juice & Bar concept, at Heathrow's new Terminal 5 in
April. The company said that if the concept, which serves freshly
made sandwiches, wraps, juices and smoothies, plus roasted coffee,
was successful, it would open more in busy high street and business locations.
International
influence
While operators in the UK
concentrate on expanding their new concepts nationally, overseas
rivals are looking to bring their internationally-established brands
to the UK.
Vapiano, the fast-casual dining
concept from Germany, opened its first British site in London's
Regent Street at the start of June. The company plans to expand the
fresh pizza, pasta and salad concept to up to 25 sites in the UK over
the next five years. The group already operates 20 outlets across six
European countries plus three stores in the US.
Tibits, the Swiss vegetarian
restaurant concept, will make its UK debut in August in London's
Heddon Street. The group, which operates four outlets in Switzerland,
will open a second UK unit in the new Westfield Shopping Centre in
Shepherd's Bush before the end of the year.
Cilantro, the Egyptian coffee
shop chain, launched its first outlet in the UK in Piccadilly in
April. The group hopes the Piccadilly opening will be the first of up
to 20 planned for the UK over the next 12 months.
Kati Roll Company, the Indian
street food concept, will open its first UK site by the end of the
year, after acquiring the leasehold of a unit in London's Poland Street
Pinkberry, the low-fat yoghurt
concept that has taken the US by storm, is reportedly set to open its
first UK site before the end of the year, with London's Canary Wharf
the expected location.
Texas Chicken made its UK debut
in February when it opened sites in Birmingham and east London. The
company, which has 1,600 outlets worldwide, plans to open up to 50
outlets in the UK and challenge KFC's market share.
Conclusion
Everybody is looking for the next
big thing and the restaurant sector is no different. In challenging
times, where consumer spending is tight, a break from the norm can be
the one thing that lures customers out of their homes and back onto
the high street.
Whether it is a new concept,
fresh menu, the addition of new technology, such as wi-fi connections
or increased marketing (notice the rise in two-for-one offers across
the sector), restaurants need to move forward to continue to grow -
standing still equals going stale.
The lines between pubs and
restaurants are becoming increasingly blurred, with reliable service,
value for money offers and good quality food - the minimum standard
expected in both sectors by consumers. That added "X-factor"
a new approach can bring could mean the difference between a good
year and going out of business.
While entering the restaurant
market has always been a precarious business, launching a new concept
is still a risk even for the most established operators. However,
those that are prepared to investment in new ideas that capture the
consumer's imagination and spending can reap the short and long term rewards.
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