If the average tenure for a chief executive these days in a quoted business is under five years, and for those in private businesses slightly more, then Simon Kossoff, Russel Joffe, Robin Rowland, Clive Schlee, Harvey Smyth and Andrew Page, with a combined tenure of more than 60 years (an average of 10 years each), are all due for replacement at some point soon. When it happens, who from the next generation will take over and where will they come from?
This question came to mind when looking at the make-up of this year’s Retailers’ Retailer winners. The thing that hit me – Andrew Guy, chief executive of Ed’s Easy Diner, aside, and apart from the casual dress code – was the youthfulness of the award winners. The majority are under or just turned 40. There is a generational shift taking place.
In 2000, James Horler and a number of like-minded operators launched the Fifty Twenty networking event. The group, which includes operators such Ian Neill, Rowland and Mark Derry, meets three times a year to network and work towards a 2020 target of 50% of UK food spending going on out of home eating. Move forward a decade, and the new generation – led by this year’s Retailers’ Retailer of the Year Alex Reilley – have created their own networking series.
Anyone who heard the end of Reilley’s speech will have wondered why he said it had been “a great year for ARSE”. ARSE stands for Association of Retail Sector Experts and also includes in its group: Pho founder Stephen Wall; Tom Byng of Byron; Charlie McVeigh of Draft House and Scott Collins of Meatliquor. They, and the likes of Brandon Stephens at Tortilla and Tim Foster and Anthony Pender at Yummy Pubco, are shaping the sector now and, if they wish, for the next 20 years.
Maybe the biggest shift this year came in the Best Company category, where Hawksmoor beat off competition from more established operators: JD Wetherspoon; Living Ventures; Nando’s; TGI Friday’s; The Restaurant Group. Hawksmoor, led by last year’s Rising Stars Will Beckett and Huw Gott, consistently tops the employer charts not only in our own sector but across UK business. It backs this up with excellent sustainability credentials, charity work and boundary-pushing offer and service.
That is not to say that the Fifty Twenty generation isn’t still having an influence. Take a note of the founders and companies mentioned above and the majority will be backed or advised by a leading figure from the previous generation. Steve Hill is chair of Pho, Rowland is on the board at Tortilla, Luke Johnson backs Draft House, Kossoff is an adviser to and investor in Chilango, and David Page is chairman and investor in Meatliquor. It highlights their ability to spot new concepts that they believe have longevity but also tap into the talent on show.
The majority have also found a different entry point to the industry. As Hill points out: “All my peers are either ex-Whitbread, Pizza Hut or similar. This generation have come out of marketing and the City, and they have all decided ‘we want a piece of that’.”
The pace of change is also seeing this generation influencing the “next big things”. Back to Retailers’ Retailer and right in the middle of the mix were the three founders of Red’s True Barbecue, who picked up the Best Venue prize that evening and are creating the latest buzz around the market. It is understood that Tortilla’s Stephens has been advising the founders closely on their next steps and could be about to take an official role with the business, while a number of his peers are believed to be looking at investing in the business.
Within this generational shift, and the proud winner of two awards on the night, stands Ed’s CEO Guy, a nod to the fact that experience is still key in the sector, alongside a good and scaleable offer.
The good Guy
Under Guy’s stewardship, Ed’s has expanded rapidly in the five years since it was the subject of a £1.75m buyout led by its chairman Stephen Greene and backed by Rankvale Hospitality. In that time, it has grown to a £17m-plus turnover business with 24 core sites in the UK, a number of brand extensions and its first overseas franchise in South Africa. It is now attracting interest from private equity and will need a further injection of investment to reach its stated ambition of reaching 100 sites by 2018, but with strong momentum behind the brand it has a good chance of reaching that goal, and a lot of credit should go to Guy for that.
Over the last 12 months, whether it be at our Director’s Club meetings, Restaurant Conference last October, or this month’s Retailers’ Retailers, it has been great to see the respect shown to Guy, who has over 35 years of experience in the sector. I have seen many an operator, established and new seek out a minute or two of his counsel, wanting to know the secret of his success, which he puts down, in part, to a simple mantra of that you have to give the consumer “a good time, every time”.
He has also coined a phrase to describe Ed’s and others that fit outside current definitions: full service fast casual. Guy distinguishes it from fast casual by the service and environment. Ed’s restaurants have a £10.50 average spend per head, with average dwell time of 35 minutes, and fresh food cooked in under 12 minutes.
“Our most successful diners are where there are a lot of people nearby doing something else and they want a short break, some quick food in a totally different environment,” he says. “We’re in the entertainment business - we play upfront music and we have upfront food service.” He mentions fellow successful business Patisserie Valerie as another concept that fits the full service fast casual category. “You are in there for a relatively short period of time, you get full waiter or waitress service.”
Another key to Ed’s success is its focus on loyalty marketing. Ed’s now has c315,000 digital followers, with loyalty marketing “the core part of everything we do now”. The group also has its own Ed’s Club loyalty card.
Guy says: “We email them once or twice a month, we send them an offer approximately two times as year. All the other emails are gossip, news, sometimes competitions, sometimes quizzes. It’s remarkable how many people apply for a £20 voucher. This kind of building loyalty is crucially important.” The quality of the group’s overall offer is also producing results with recent consumer research highlighting that over 90% of its customers said that their last visit met or exceeded expectations.
The company will be looking to add a fair few new Club members over the next four years as it stretches its legs further across the UK and internationally. The strategy for the group remains to operate and open new diners in high-footfall premium shopping centres, transport hubs, and busy tourism centres. It is thought that on top of the upcoming openings already mentioned, it is also in talks on sites in Crawley, Plymouth and Birmingham Grand Central, making sure the momentum it has built so far should not go to waste.
The new generation have mastered the development and rollout of their concepts. They could do a lot worse than take lunch with Guy – or any of the experienced operators mentioned – to discuss the secret of longevity. And the best piece of advice they could receive from Guy? “Work hard, have fun, make money”. An outlook on business and life that all generations can agree on.