Roadside revolution

Roadside catering in Britain has rarely been more than a refuelling exercise. Just as motorists fill their tanks with petrol or diesel to keep them going, so drivers wolf down a cheese and salad sandwich or sausage roll to stave off the hunger pangs until they reach their destination.

While the relatively recent arrival of high street brands such as Costa Coffee and Nando’s at motorway services has upped the quality, the big sites still tend to be dominated by fast food joints like McDonald’s, KFC and Burger King, while establishments on A roads tend to be coffee shops, counterservice shops attached to petrol stations or drive-thrus.

Although its quality was woeful, Little Chef was an attempt to create something that was more than just refuelling. Families were able to sit round a table, tucking into pancakes and maple syrup or, if they were feeling particularly hungry, an Olympic breakfast. Charlie, the chain’s cheery mascot, even had a bit of a paunch, just like the many travelling salesmen who would use Little Chef as a pitstop.

Which brings us to the latest company to enter the roadside market: Loungers, which has just launched a new chain called Brightside. The name doesn’t do much for me, but the concept sounds good, as you’d expect from the café-bar operator. It has just opened its first branch on the A38 opposite Exeter Racecourse, which aims to evoke memories of childhood road trips in the 1970s and 80s with formica-topped tables, avocado bathroom fittings and, most importantly, quality food.

Loungers, which was founded in Bristol in 2002, runs 175 venues under the Lounge brand and 35 Cosy Club sites and is adding 30 a year, but the Brightside site openings, most of which will be on A roads, will be in addition to that target.

It will serve what Alex Reilley, the Loungers chairman and co-founder, calls “elevated comfort food”, including breakfasts with potato croquettes; sourdough pizzas with homemade San Marzano tomato sauce topped with mozzarella; and ham, egg and chips using treacle-cured pork belly and waffle fries with a charred pineapple and chilli salsa.

The first three roadside diners were acquired from Route Restaurants, formerly Little Chefs and Happy Eaters and a mixture of leasehold and freehold properties. The first to reopen under the Brightside brand, on the A38, cost about £1 million but the next two – on the A38 near Saltash and on the A303 near Honiton – will cost £1.7 million and £2 million respectively. The group has also just exchanged contracts on a new build site on the A11 near Thetford. The site will be developed by MFG adjacent to their existing petrol forecourt. According to Reilley, the Honiton building was such poor quality that it had to be completely demolished, but will still open in time for the summer getaway to the West Country.

When I first heard about Loungers’ plans for a roadside move, my immediate thought was that I hoped it would be something like the Ram Jam Inn on the A1. It is, admittedly, donkey’s years since I last went to the Ram Jam, but I went there a few times and always enjoyed a quality breakfast, enjoyed at a leisurely pace while reading the papers.

When the Loungers chairman told me the group had exchanged contracts on a site in Rutland, imagine my surprise to be told it was the site of the once famous - but now, it turned out, long since reduced to rubble – Ram Jam Inn. In fact, my good friend Mr Google tells me the Ram Jam closed its doors a decade ago and never reopened.

Reilley said that, despite launching Brightside in the West Country, the group was already seeking opportunities in other parts of the country, initially in eastern England and in North Wales, adding: “We’re not restricting ourselves geographically, because we need to take opportunities as and when they present themselves.”

So how big is the opportunity? “This could be an interesting third string to our bow,” said Reilley. “Little Chef had 439 restaurants, which at its peak was probably too many restaurants, but we’ve got to feel confident that there’s scope for three figures. Starbucks and McDonald’s both have lots of sites but are still acquiring.”

He insists that Brightside will offer something “quite different” to roadside operators past and present. “It’s difficult for us to judge how it will go because there’s not much in the way of comparables that we can draw on. But the reaction we’ve had has been overwhelmingly positive and that makes us feel we might have something with legs. We like the idea of Little Chef and what it was there to serve, but this is a 21st century concept.”

Share re-rating?

One issue that has dogged Loungers has been its share price. Since it was floated almost four years ago it has performed at the top of its peer group in trading terms, yet by contrast the shares have only just ticked back above the 200p issue price.

Admittedly, it has had to deal with factors like Covid, cost inflation and the cost-of-living crisis but it has outperformed the majority of the sector while expanding at a faster rate than, well, anybody. Nick Collins, the chief executive, vowed recently that he would “keep banging the drum” in his efforts to get the shares rerated.

So why isn’t it getting the recognition it deserves? Since IPO in April 2019, notwithstanding the pandemic, it has expanded from 146 outlets to 210 and has now added a third leg with potential for at least 100, probably a lot more. And don’t forget, that is on top of the roll-out of 30 Lounge and Cosy Club sites. In fact, it may not be a coincidence that the shares have been back above 200p – though not by much – since stock market investors started to get their heads around the scope for rolling out Brightside.

Perhaps, once City folk start motoring down to Devon and Cornwall this summer and realise that there are roadside diners that are worth stopping off for rather than being simply refuelling interludes, the shares might finally get the re-rating they deserve.

Dominic Walsh is a business reporter at The Times