Loungers: 'We were guilty about getting overexcited about new openings'

On not losing sight of the customer

If you’re growing at the rate that we’re growing it’s easy to become self-obsessed with your particular rollout project and forget about the customer ordering a burger or a pint.

In 2013/14 when we started to accelerate our rollout to 25 sites a year, as a leadership team we were guilty about getting a bit excited about new openings, and we stopped visiting sites so frequently. There’s no doubt that affected the customer experience and our performance in terms of sales.

All the leadership team visit at least 10 sites a week, if not more. I always go to the kitchen first, and speak to everyone by their first name. No one too important to clear tables and get stuck in. I’ve had awkward situations where I’m fumbling over the till and looking lost – but customers love it if you explain it and talk to them.

On knowing what happened yesterday

We deliver a complex all day offer, from morning to midnight, and through our operational intensity we cope. We talk a lot about knowing what happens yesterday, and this involves digging into the detail. Everyday I read an email with 116 paragraphs, with one for each site – it has sales, labour, and anything of note that happened that day. People think we are absolute loons for doing this, but it’s important part of what we do. We want to make sure teams are reacting to problems, and making sure they don’t happen again.

On feedback

All feedback of all varieties – emails, social media, letters – is seen by everybody. Everybody should know what customers think about us, and that way they feel the pain when it’s negative.

For example, Loungers always used to serve wine by the 125ml glass. We always had sporadic feedback that people wanted 250ml, but we dismissed it as nonsense. Eventually we succumbed, and enjoyed 40% like for like wine sales. It showed us a really important lesson. We encourage customers to talk to us, and the more it gains momentum the more you should listen.

On internal promotions and letting go

Quite often we’ve hired people from sites for our HQ, which is great culturally as they understand what Loungers is all about, and it creates a great progression story. But we have to be careful about this ideal about working at HQ becoming a goal. In the past we’ve created roles for people that have had enough of management or ops – but it never ends well. When you take someone from a site and bring them into HQ , you have to ask are there other candidates outside the business who are better qualified? More often than not, there are.

Tolerating underperformance is something we’ve been guilty of. When someone’s not right for the business, we’ve said let’s give them another chance, see if they can improve. Roll forward six months and that person can cause a lot of damage. You have got to be ruthless and look after the customers.

On naivety and instinct

There’s always a temptation to be quite lean from an HQ perspective. In our goal not to be too corporate we were always quite proud of the fact we didn’t have an HR department despite having 2,5000 employees. It was probably a bit naïve. We hired a people director at the start of this year, and had we done that earlier we would have had a clearer strategy and moved on as an employer more quickly than we have done.

We take pride in being novices and having never done this before. We naturally take advice from our private equity partners, but in the majority of cases our instinct proves to be correct, and by not listening to other people, we’ve done well.

We base our decisions on instinct, then we tend to use data once we’ve reached our conclusions.

On valuing personality in staff

We have a perceived independence - we don’t want to be seen as a chain. We avoid jargon and unnecessary complexity. It’s important that comes across naturally. Ultimately it’s about personality. We want our teams to come across as individuals, not robots.

Like a lot of operators, we obsess over staff turnover, and especially with Brexit, it’s very important. But it’s not everything. We want to employ people who get hospitality, who have personality and can interact with people. For a lot of people it’s a temporary job, and these people do bring something special to the business. Because they’re excited about something else other than hospitality they bring a different dynamic to the business.

On being patient with underperforming sites

We’ve got 10 sited that when they opened they were trading at 40, 50 60% level of sales we anticipated. Then over two, three, four years they get to consistent double digit like for like growth. We don’t see these slow burners as a problem. If it doesn’t open as you anticipate, and if takes customers a little while to see what you’re trying to achieve, then show patience. Because as long as you believe and there are signs sales are increasing, it will turn out well.

We’ve closed four sites, and in the early days it was upsetting, it damaged pride, and hurt. We thought we would hang on, that we could make it better. But if a site’s not working you’ve got to cut the chord. It will become a distraction and take people away from successful sites.