The opportunity is to be better

Too much competition, high rents, cost inflation, Brexit and lack of differentiation. Just some of the reasons given for the struggles seen predominately within, but by no means confined to, the casual dining market.

For the panellists at property expert Cedar Dean Leisure’s recent ‘Join the Journey’ event on staying ahead of the market, the answer is simple: to work at being better.

Marcel Khan, ex-operations and brand director for Five Guys Europe, and regional MD for Nando’s UK, said he believed that many operators are stuck in negative ways of thinking, and that the biggest challenge facing the industry is from within.

“If you are in a positive place there are some real opportunities out there, but I think it’s the curse of the industry that we are just not imagining better,” he said. “There are some negative forces encroaching, but if that is all you are focusing on then you are not setting yourself up to win.”

One way that operators can better themselves is to offer a differentiated proposition. But being different isn’t necessarily a requirement if you are already the best at what you do, according to Afroditi Krassa, founding director of hospitality design company AfroditiKrassa. It becomes a problem when the customer has no reason to come back to your restaurant over a competitor’s.

“These kinds of business need to reinvent themselves, and the only way to do that is to create a completely different experience,” said Krassa, who has worked with the likes of Itsu, Dishoom, and, more recently, Byron, who she described as “the poster child of the crisis”.

This doesn’t mean investing in bricks and mortar, but focusing on the experience itself,” she said. “You don’t need to cover your walls with expensive things – it’s about how you can create a completely new burger experience, for example, through everything else that is slightly less tangible, such as music, service, and products. I think this is the only way you can stay afloat, because you can’t just keep spending money as you used to.”

Ben Chancellor, director and co-founder of gourmet sandwich operator Sub Cult, agrees there is a lot to be said for ‘the experience’, with consumers after something a bit different from the cookie cutter approach. He believes it’s no coincidence that the street food scene has spawned a great many new outlets in London, “because the engagement that customers have with the operator is much more personal”.

“People like that personal touch, and I think operators need to be thinking about that now more than ever,” he said. That’s not to say only smaller operators can manage to achieve and maintain this connection. Chancellor believes it is possible to expand and keep that unique personal touch. “It begins with company culture,” he said. “It is difficult to put your finger on it but having a strong connection with the customer is important,” he said.

It also comes down to other elements, such as the music that you are playing, the customers’ experience with the server, and the ability to find staff that feel like they are part of the culture of the company and enjoy being there, which is reflected in their customer service, he said.

On the challenge of costs, while it may be tempting to do everything to save the pennies, and focusing on retaining your margins, it is not the answer, said Khan. “Listen to the market, and follow your gut. Don’t save that 5p on every burger bun. The opportunity is to be better. I believe in customers running restaurant concepts, not finance,” he said.

Krassa said that in the past her clients have been very obsessed by profit margins. “It is better to have a smaller margin on something that could potentially be larger in the future,” she said. “If you dial up the experience you increase your sales, and people coming through the door. You don’t necessarily need to have a massive profit margin, you can be less greedy about it and have a longer-term sustainable business, and build a brand which has got real equity.”

For Jon Lake, managing director at Chopstix Group the battle to stay ahead is less about reinventing the wheel and more about constant evolution. He said that although the company had a big rebrand only two years ago, it would be going back again and refreshing its estate in the not too distant future. “We are looking at our retailing, our range, and packaging, for example. It’s all about customer touchpoint and how we look and feel,” he said.

He believes one of the biggest challenges for businesses is to stay focused and believe in what you do. “Staying on that course is one of the biggest challenges, but if you do then you have every chance of succeeding,” said Lake.