Restaurant concepts surviving the massacre in the fast-casual dining sector
How is it that, those one-time stars of the restaurant world such as Byron, Jamie’s Italian and Eat seem to be hitting tough times, while others are flourishing in the same environment? The only way to find out is to dig a little deeper, not as to the reasons for failure (as they have been well documented) but into the success stories, those restaurant brands that are in fact showing great performance, despite the doom and gloom.
Happy Meal and happy times
A search for the holy grail started with McDonald’s, whose global earnings grew by 10% in 2017 including rising revenues from the UK. McDonald’s’ success has been underpinned by some bold, risk taking initiatives that have paid off. They quickly reacted to the importance of delivery in the UK and embraced it through their collaboration with UberEATS thereby delivering additional sales during quieter times of the day. McDonald’s has also invested heavily in their customer experience with stand-out initiatives such as GPS table service, self-order kiosks and mobile ordering.
It doesn’t fall flat with Flat Iron
Next under the microscope was Flat Iron, which has grown steadily since launching in 2012 to five sites across London. They have focused on one simple steak set dish, and delivered it at the attractive price of £10. This price point is partly possible due to the clever choice of cut however; they have also invested in a 50 strong Dexter cattle herd, which has allowed them to understand more about husbandry and flavour profiling. They have also created an environment that is perfectly suited to a millennial and Gen Z audience. The relaxed, stripped back spaces are raw hence low cost, however, it has touches of glamour such as the ember fire-hearth at the Shoreditch site and the and giant ice blocks on the bar in Covent Garden.
Keeping it fresh, friendly and honest
Another restaurant brand bucking the trend is Honest Burger, which has reported a 51% increase in turnover over the last 12 months and has now opened 24 sites. The first area that makes Honest stand out, is food innovation and a focus on creating a great quality product. Collaborations such as the Korea and the Karma burger are not a flash in the pan but part of a commitment to innovation and keeping their offer fresh. Similar to Flat Iron they keep it simple, which allows them to remain competitive, starting at £9 for a burger and rosemary fries. The final secret to Honest’s success is their staff. They have managed to recruit cool, friendly, warm- hearted souls and empower them to make every guest feel special. Most importantly they also arm them with great product knowledge that is delivered in a relaxed but confident style. Simple touches such as crouching down beside customers to take their order don’t happen by chance, but at the same time it doesn’t feel forced or fake.
I say #CheekyNando’s
Finally, the stand-out performance goes to the unstoppable Nando’s, whose sales of £850 million in 2017 were up 14% on the previous year. While others have been struggling, Nando’s claim never to have closed a site due to poor financial performance. They now have over 900 locations worldwide and managed to open nearly 50 new sites last year even in these tough times. This fact proves that you don’t have to be boutique to remain unique, Nando’s have grown at an astonishing rate while maintaining both high standards, margins and brand awareness. Above everything else Nando’s are a brand with attitude, they stand for something and have an opinion that they are keen to share. In the restaurant industry where most of their competitors are really just places with a name, Nando’s stand out as a proper brand. Their brand positioning is well supported by their non-traditional marketing activities that rely heavily on social media, resulting in them having over 4 million followers on Facebook. They have even created their own catchphrase “going for a cheeky Nando’s”. Their celebrity following is unlike any of their competitors, exemplified by the mythical Nando’s Black Card. It’s not just about the brand though, there’s so much more; such as the mono style focus on great peri peri chicken, the simple process that removes the negativity of paying at the end of your meal and last but not least the imaginative use of interior design, to create environments that have a distinct, eclectic and relaxed vibe.
So, what are the learnings from these four food hero’s?
Tip one: grow slow.
All of these brands have taken their time to develop, then expand. In the early years, one site a year seems to be more than enough for any business to manage.
Tip two: create a brand, not just a location.
This factor definitely links these four food heroes. That’s not to say the likes of Byron don’t have an outstanding brand with real character, but it doesn’t come close to emulating the brand strength of Nando’s. When we talk about ‘brand’ we mean the responses you evoke in people’s heads and hearts, how you make them feel, think and act.
Tip three: keep it simple.
At their core, all four of these successful brands have a mono product offering that has allowed them to focus their efforts. Keeping it simple allows you to communicate clearly with your audience, deliver food excellence by controlling your supply chain, remain competitive because you can buy in quantity, and most importantly carve your own niche in the market by standing for or owning something.
Tip four: creating a hero product.
This approach takes hours of dedicated effort. Some of the world’s best fashion brands use a model called the product pyramid; this model when applied to the restaurant world can achieve remarkable results. The product pyramid puts your hero product at the top, supported by seasonal items and then your basic essentials at the bottom. All outbound communication is then focused around your USP, hero product. By developing one truly great dish and then broadcasting it to the world, you start to carve out your own niche in a crowded market, you own something. Where would McDonalds be without the Big Mac, Nando’s without their peri peri chicken or Flat Iron without their flat iron steak?
Tip five: never stop innovating.
Too many brands are far too eager to speed into roll-out and just replicate their model. This approach inevitably leads to failure as gradually standards drop, and customers start to leave. What’s needed is an almost obsessive focus on improvement, never being content with it’s OK. I can remember many hours working with Julian Metcalfe, founder of Pret and owner of Itsu. He’d already achieved more in the restaurant world than many others could only dream of, however every day he would pour over the details, obsessively challenging his team to innovate and achieve excellence.
Tip six: create a value-added experience.
One of the foundations that link all of the brands mentioned is that they go beyond just offering a good value product, they add value to their products by wrapping them in an overarching experience. The effect is to elevate the experience beyond what customers would normally expect, hence increasing advocacy and loyalty.
Published: 21 November, 2018 on Verdict Food Service