Tortilla predicts a renewal in consumer sentiment this year amid buoyant trading in London, CEO Andy Naylor tells MCA.
Naylor acknowledges the challenges faced by businesses amid fluctuating demand and economic uncertainty, but remains optimistic about the Mexican fast casual brand’s performance after reporting a 14% increase in revenue to £65.7m in 2023.
“London’s very strong. If you walk around any of our stores at lunch, there’s a big queue. Particularly Tuesday, Wednesdays, Thursdays, but we’re seeing some good recovery on Mondays as well.
“There is lots to be optimistic about in central London.”
Behind this, “consumers are feeling that inflation’s calming down, there is talk of interest rates potentially dropping, and it feels like we’re coming out of the other side of some of these challenges.”
Kiosks could be the answer to meeting high lunchtime demand, says Naylor. The brand has opened its first digital concept, a kiosk-only site in London Wall, and has installed the technology in its Bath site earlier this year.
Currently, the company’s focus on franchising is a key component of its expansion, with at least five openings planned for 2024.
With franchise sales up 26% for 2023, Naylor highlights the success of partnerships with SSP and Compass, noting their commitment to opening new locations.
Acknowledging a low comparative year affected by Covid in 2022, he says, “even ignoring the year-on-year growth, some of the numbers they’re generating out of those sites are really pleasing.
He adds, “That space is working really well. I think burritos work well in travel, and it comes back to offering something a bit different.
“If you look around the railway concourse, I think a burrito is differentiated still and it’s customizable, which is really important.”
Beyond these existing relationships, the business is open to new partnerships and is keen to consider more franchised high street stores.
“We want to see what that might look like, whether it be certain regions we give to a partner, but the key there is finding the quality partners that we feel confident with.”
Tortilla is still exploring opportunities for company-owned restaurant openings but has refined its strategy to only target grade A, high footfall locations such as Manchester Arndale, one of the three corporate openings slated for this year.
He adds that despite lower footfall figures across the board, “top” shopping centres and high streets will remain strong, with secondary locations more likely to struggle.
“Manchester Arndale is a cracking shopping centre for us. We know where footfall is high and the brand is understood, we can perform well straight away”
This strategy amid a ramp-up in its franchise rollout enables to brand to “really focus, and take a breath on the UK profitability,” says Naylor.
Looking beyond the UK market, Tortilla is poised for international expansion, with a keen eye on opportunities in Europe.
While specific plans are yet to be announced, Naylor says, “We’re really confident that there is a big burrito expansion opportunity in Europe,” citing the company’s scale and product quality as key differentiators.
It will also take a directional change in food innovation. “It’s always good to be doing new things on food because it creates news to market.”
“It sits hand-in-hand with the promotional push that we’re going through, so there will potentially be some new menu items, some collaborations.”
Describing a “word of mouth” approach to marketing so far, Naylor sees currently untapped potential in expanding awareness through targeted marketing initiatives and loyalty programs, ensuring sustained growth in the years to come.
“Whenever I go to a site I always walk around and ask people if they know where Tortilla, and usually only two out of 10 know - I think that number can grow.”
The business will launch a new loyalty scheme in June and sees potential to “ramp up” further promotional activity this year.
