The Piper-backed Caribbean restaurant operator has arguably flown under the radar for longer than other casual dining brands. Now, having grown to 42 sites in the UK, MCA’s Georgi Gyton takes a look at the performance of the group and examines current consumer sentiment.
Compared with the likes of Italian or Thai food, Caribbean cuisine certainly has a less high-profile presence on the high street, with the sector dominated by independent operators. In fact, Turtle Bay is really the only chain Caribbean restaurant of any notable scale in the UK. Currently with 42 sites in the UK and two in Germany, the Piper-backed operator has slowed its openings programme over the past year, having added seven sites during the full-year to 24 February 2018. Not that this an unusual trend in the current climate.
When Piper invested £6m in the business back in 2013, Turtle Bay had only four sites – the same number as Las Iguanas, also co-founded by Ajith Jayawickrema. Las Iguanas grew to be Britain’s market leading Latin American chain, delivering Piper a six-fold multiple on its investment when it exited in 2007. So, is Turtle Bay on course to do the same?
By 2017, the Caribbean operator had already grown to 36 sites – a notable achievement considering its first, in Milton Keynes, only opened in 2010 – and at this point said it planned to continue to open at a rate of eight sites a year. When Piper invested, the plan was to open 20 further sites over the next three to five years, which Turtle Bay has achieved.
What do the numbers tell us?
The latest financial figures available for the Caribbean restaurant and bar group showed that sales were up 6.9% to £68.1m for the year to 24 February 2018. However, profit before tax fell to £5.9m, from £8.2m the previous year, due to opening costs during the period as well as the impact of external factors including rises in the National Minimum Wage, business rates and the impact of exchange rate movements on input costs.
Jayawickrema said at the time the group was pleased with its continued growth, “particularly during such challenging conditions for the industry as a whole”. “Despite the challenging environment, we will continue to open new restaurants and have a healthy pipeline of opportunities,” he said.
MCA’s market insight director Steve Gotham says that, while some of the shine may have come off this former shooting star, in the context of a depressed wider market, modest growth is not to be sniffed at. And while openings have stagnated, they have not stopped, with a new restaurant in Coventry’s Cathedral Lanes on the way. The business also made several high-profile appointments earlier this year, in the form of Jane O’Riordan as chair, and Adam Gregory, formerly of Be At One, joining as operations director.
“Brand awareness and consideration appear to have held up pretty well over the past couple of years, which is encouraging,” adds Gotham. “But the business has lost some dinner visit share in the year to April 2019 versus the previous year.” While there is limited data on this brand, Gotham said there is a suggestion that standards have been slipping, with NPS scores declining and as well as ratings of food quality and value. This compares with channel averages, which have stayed the same.
Through the consumer lens
Commenting on CGA’s recent Brand Momentum Report, compiled in partnership with Stone & River, Karl Chessell, business unit director – food and retail at CGA says that “relative to other restaurants Turtle Bay scores pretty well”, particularly on the loyalty and opinion indexes. “This suggests there is still headroom for growth as they build brand awareness and open new sites,” he says. It came out in sixth place overall within the restaurant channel, and while awareness of the brand was lower than other operators, it achieved an 82% score in the brand momentum opinion index, which measures the difference between positive and negative opinion changes over the past year, while 84% of customers said they were likely to revisit or recommend the brand. In terms of satisfaction for both eating and drinking occasions, they ranked in the top 10 restaurants in CGA’s BrandTrack surveys, and in the top five for perceptions of fun.
As referred to earlier, Caribbean cuisine has not made it into the upper echelons of popularity, although neither has Portuguese food, and Nando’s won’t complain that it’s the only nationwide operator offering peri peri chicken to the masses. Research on cuisine type, carried out for a new food trends report by CGA, shows there is latent demand for Caribbean food, with only 28% eating currently eating it, but a further 38% saying they would like to eat it and 39% stating it is difficult to find, so again this suggests there is a growth opportunity, says Chessell.
In order to broaden the appeal of its menu, Turtle Bay has embraced various trends, such as the increase in consumer demand for vegetarian and vegan options, with the launch of the Kernal burger – its first vegan burger, made from sweetcorn patties. Late last year it also began trialling a brunch menu, which looks set to be rolled out across its estate.
There is certainly a place for a Caribbean operator in the marketplace, and happily for Turtle Bay, there is no one else snapping at its heels.