Tortilla has said that recent whitespace marketing mapping has show the business is “in a position to be able to do upwards of 200 sites now in the UK”, CEO Richard Morris has said.
Speaking during an investor presentation following its interim results, Morris said the business had last undergone property whitespace mapping three years ago pre-Covid and that it wanted to get an updated picture following the pandemic.
“We now know we are able to trade in secondary locations and slightly off-pitch sites, due to the success of our delivery and takeaway model,” he said, describing the potential opportunity in the UK as “really encouraging”.
At the time of the company’s IPO in October last year it announced plans to open a further 45 sites over the next five years, with its openings rate due to increase to 12-15 new sites per year from FY23.
The business has also now found itself in the situation where its sites outside London are almost outperforming those in the capital.
While there are reasons why sales in London have been more volatile, such as the greater impact from people working from home more and the summer’s train strikes, Morris said that Tortilla had proven it can successfully expand the brand across the breadth of the UK.
Commenting on the trends the business has experienced in the delivery channel, CFO Andy Naylor said that while sales were down from the highs of an average of 48% of sales last year, to around 30% now, that was still roughly double the level of sales it was doing through delivery pre-Covid.
But what it has seen with the cost of living crisis is that people are choosing to come into stores more frequently to collect their orders, due to delivery’s more premium price point given the delivery fees.
“Consumers are making the choice to come in […] which is great for us,” he added. Tortilla has tried to bolster this trend with the addition of its new loyalty scheme Tortilla Club. Over the past 12 months it has seen roughly a 30% increase in visitation frequency from loyal customers versus a non-loyal customer.
“I think that’s something that we can really grow over the next few years and something that we can push as a key tool to drive our like-for-likes,” Naylor said.
While the company has been hit by rocketing protein prices, it said it was in a “relatively ok position” with regards to utilities. Naylor said Tortilla made the decision not to hedge in November last year, as rates were at an all-time high.
Although the war in Ukraine has contributed to prices rising even higher since then, he said buying spot had been a better strategy for the business as it benefited from the lower prices over the summer and coming into winter it will now benefit from the government support. “It has impacted us, but only to the tune of around £500k.”
