Spragg: ‘If you get your proposition right, you are going to win’

Despite the challenges seen in the casual dining sector, “if you get your proposition right, you are going to win”, according to James Spragg, CEO of Casual Dining Group.

Speaking on the ‘hot topics’ panel at MCA’s recent Restaurant Conference, Spragg said he had been encouraged by the statistics around the expected growth of the branded restaurant sector in MCA’s Restaurant Market Report.

“If you read the papers, you’d think it was absolute Armageddon out there, and people were just going to street food festivals and having Deliveroo at home. The reality of the market is that it is a strong and stable market which has been growing for years, and if you do the right things well you are going to win,” he said.

He said the pressures of over-supply and cost pressures, that had been present for the past three or four years, were starting to ease. “There are plenty of winners out there at the moment, whether its individual restaurants or brands, so I’m a bit more positive,” he added.

He said the current situation was no different to what happened with the pub market 10-15 years ago: “It is cyclical – it’s not that people have given up on restaurants.”

The panel, which also featured Richard Morris, managing director, Tortilla; Nisha Katona, founder, Mowgli Street Food; and Matt Snell, managing director, Gusto Italian, discussed some of the challenges faced by operators, such as Jamie’s Italian, and agreed that sensible property decisions were key to a sustainable business.

“Jamie’s was a prime example of the issues in the sector,” said Morris. “They took such massive sites and opened with silly numbers. If you actually dig deep the numbers they were doing at the end were still reasonable but they got themselves into a lot of trouble financially.”

“For me the Jamie’s issues was as much a property one as much as anything else, and I think it has made us all very wary of signing up to huge rents in mixed use developments,” said Snell. “Having said that landlords are starting to be much more realistic in terms of the deals they are wanting to do.”

Katona, who said she had just signed Mowgli’s 19^th lease, explained that with sites like its recent University Green site in Manchester, “it is dead” at the moment but they know with those kinds of sites it will take a year before they get to where they want to be.

“When you have a plug that just haemorrhages cash in terms of occupation costs there is no breathing space; you cannot organically develop a love for your food and your brand. It is one of the reasons why sadly, because it’s the best city in the world, I’m not here in London,” she explained, adding that she usually likes to pay c.£15 sq. ft for sites.

Spragg added that operators should avoid accelerated roll-outs, particularly at the expense of looking after your core estate. “I would preach to people to go a bit slower and be a bit more careful and then you will build a brilliant business – but rolling out 10 or 15 a year is just dangerous,” he added.