Wingstop sees potential for up to 300 stores across the UK over the next ten years, Tom Grogan and Herman Sahota, co-founders of master franchisee Lemon Pepper Holdings, tell MCA.
The 34-strong fast casual wings specialist is on track to reach an estate of 40 by the end of the year.
Wingstop plans to open at least another 12 sites next year and prospects for another flagship store in London’s West End.
“We wanted to disrupt the stagnant restaurant scene in the UK’s QSR space at the time,” Grogan says. “We saw significant whitespace opportunity, especially for chicken.
“10 years from now, we see market opportunity for 250-300 restaurants.”
Wingstop, headquartered in Texas, made its UK debut in 2018. Like-for-like sales in 2023 are 45% up year-on-year, across the in-store, takeout, and delivery channels.
“The brand has outperformed our expectations,” Grogan adds. “It’s a strong indicator of trade across the country and ever increasing demand for the product.”
While each regional city could have opportunity for five or six locations, the capital could have room for 30-40, with London continuing to hold up well for the brand.
The Shaftesbury Avenue site in London – which has been open for five years – saw its strongest ever week last week.
“Scotland has been huge for us, as well as Birmingham and Manchester.”
The brand’s estate is roughly split into 40% high street and 40% shopping centre locations, along with 20% dark kitchens.
High streets, shopping centres, and retail parks are all high on the priority list.
“We’d like to open our first drive-thru in the next 24-36 months, but it’s not necessarily a huge channel for growth,” Grogan explains. “There are few sites suitable, and it needs to be an all-day offering, while we’re a late afternoon- to evening-led proposition.
“Other brands bring in breakfast because they need the trade, but fundamentally we’re a chicken concept.”
Wingstop made the move into retail parks earlier this year in Gallions Reach, Beckton. The site has outperformed all expectations, leading to an increased focus on the format for expansion.
“We want to unlock more retail park opportunities,” Grogan says. “Shopping centres and high streets will remain a priority.
“In terms of supplementing our growth, we see a place for dark kitchens, but they must be EBITDA-positive and able to stand on their own feet.
“Every dark kitchen we operate is profitable and enables us to get the product out to more people.”
While dark kitchens are a cost effective way to increase reach, flagship stores will also be a major investment.
“We aim to ensure our entry to new markets is through high profile and high footfall locations.”
For most stores, however, “relatively compact” formats are ideal. The acquisition strategy is “fundamentally opportunity-led,” but also data-driven.
“We’re robust in doing our due diligence while assessing new sites, looking at delivery stats, competitor performance, and footfall data.”
The team take greater care in assessing high street locations, looking at footfall and key flagship sites as an indicator of short-term and long-term health.
Proving flexibility across formats will also be a priority as Wingstop continues to grow, with a focus on key regional cities, with Southampton to launch next.
Wingstop was crowned restaurant of the year by Deliveroo in 2021. While delivery is about a third of sales across the estate, the focus will be on maintaining consistency in the more profitable in-store channel.
Repeat customers remain strong as seen through delivery data, with the concept remaining exclusive to Deliveroo.
“We’ve seen like-for-like increase on delivery sales as well. But it’s operationally harder to manage three providers.
“A lot of brands need the sales but we’ve not had to pull that lever to diversify delivery aggregators yet.”
One of the brand’s strengths include authentic marketing to its primarily generation Z customer base, according to the founders.
The brand positioning is more aspirational than in the US, with the same menu but an a la carte focus as opposed to a combo- and value-led offer across the pond.
A strong presence across channels – from collaborations and TikTok campaigns to personally curated playlists in-store – has helped the product land well with the customer, Grogan and Sahota explain.
Hand-tossed chicken cooked fresh to order, accompanied by a range of sauces, makes for a “flavour-led experience.”
“We don’t necessarily see any direct competitors…one of the USPs is the simplicity of the menu.
“There’s no one really treading on our toes in terms of doing exactly what we do.”
Wingstop is rolling out milkshakes next, but consistently delivering wings at scale and volume will continue to be the priority.
“We’re not looking to push out discounts and combos. Consumers are searching for value, but value comes in the form of quality and consistency.”
As a “semi-affordable,” fast casual concept, it will continue to sustain the rate of expansion, the founders say.
Price rises have been mitigated with the ability to subsidise some energy costs due to the size of the business, as well as benefiting from corporate rates agreed pre-Covid.
The business has also worked closely with suppliers and hopes to see inflation ease somewhat this year.
“If anything, the site acquisition strategy is more compelling in case of pressure on rents and occupation costs.
“We think it has legs for 250 to 300.”
