Global bubble tea concept Gong cha is opening its first dark kitchen in the UK, amid plans to expand to more than 21 stores across the country this year.
Founded in Taiwan, the tea concept has c1,900 stores worldwide and relocated its headquarters to the UK in 2022. The dark kitchen, launched in partnership with Foodstars UK in Kingsbury, London, will be its 12th UK store and serve as an opportunity to test a highly scalable new format as Gong cha accelerates its growth in the country.
“Having expanded from East to West, the brand has a unique advantage in the quality of its product and supply chain,” global CEO Paul Reynish tells MCA. “The dark kitchen is also an important milestone in our plans to scale up in the UK – a strategically important market for Gong cha as we execute our European expansion plans.
“The model works – it’s profitable and consumers love it.”
The business is looking to experiment with different formats, with a focus on dark kitchens as “a complementary asset that’s low capex,” according to Reynish. The UK estate sees 15-18% of its sales through delivery, depending on the location.
Bricks-and-mortar expansion is also on the agenda.
“We’ve got to build more brand power in the UK through real estate,” he adds. “We’re also looking to open up more to franchisees.
“It’s a mistake to go too wide too fast because of the pressures on supply chains and logistics. Ideally we’d get congruent and consistent development.”
While Gong cha has stores across the North and Midlands, the aim to build its presence in London with a blend of city centre and neighbourhood sites to balance footfall across day parts and days of the week.
“We’re a brand for all communities, not reliant on tourist trade.”
While Gong cha is on the lookout to recruit franchisees, it will continue to invest in company-owned flagship sites in city centres. It also aims to scale up at a rate that allows the brand to maintain support for franchisees.
“We owe the ability to provide training and support…it’s also about reining in distribution costs,” Reynish says.
From flagship sites to kiosks, “there are no barriers when it comes to formats.” Installing kiosks in stores has driven spend per head, while the brand is looking replicate the success apps and loyalty programmes from other markets in the UK.
“We’re upgrading the app to allow people to order on the go and migrating those interactive features and loyalty programmes from other countries.
“The UK will also see a lot of menu innovation when it comes to food…we need to figure out what customers want and will be complementary to the beverage, then engineer the price point for profitability.”
While the core offer of customisable whole leaf tea will remain the same, Gong cha will broaden its UK offer by expanding the number of recipes available and “unleashing tried and tested menu innovation” from Asia to the UK.
While customisation is “a big part of the fun” of the offer, the brand’s strength lies in the quality of its tea, according to Reynish. Like-for-like sales are significantly stronger than pre-Covid levels, with little evidence of recessionary fears, he says.
Following recent launches in Belgium and Portugal, Gong cha is now looking to expand to Saudi Arabia, the UAE, France, Netherlands, and Thailand.
“We’ve built our team to support our franchise community and re-engineered our supply chain so we can get our heads down and start building.
“We can have all sorts of formats and accelerate growth significantly. I don’t see any reason why we can’t have 500 stores in the UK.”
