Hostmore is keen to acquire small ‘disruptor brands’ in need of investment capital, in order to help grow the business outside its core Fridays brand and newer 63rd + 1st concept.
Robert B Cook, chief executive, Hostmore told MCA that it was looking for brands that had a level of site volume that was spread well geographically, with the concept having already proved itself in cities such as Manchester, Leeds, Glasgow and Edinburgh and potentially London.
While the business does not have specific requirements in terms of the genre of food it is looking for, Cook did rule out “the typical protagonists”.
“We want something that is smart, disruptive and not in what I would call, the cluttered space,” Cook added.
The business has so far grown on a free cash basis and sees particular value in its new concept Fridays and Go – which launches tomorrow (16 March) in Dundee, due to the fact it is lighter capital model and could enable rapid expansion of the brand into new markets.
The fact the Fridays brand is also underpenetrated versus some of its competitors in the UK also gives Hostmore the opportunity to grow quickly in those areas of white space, “using our existing cash in the bank to get us there”.
Pending a successful trial, Hostmore believes there is the potential for 30 Fridays and Go sites over the next three to four years.
In terms of developing the Fridays offer, Cook said it had been trialling live music at four of its venues, on Wednesday, Friday and Saturday nights in order to give customers more in terms of an experience and to help increase dwell time.
“Early results from that have been really pleasing,” Cook said. “In think presentation on the plate is also going to be really important, and particularly the consistency of that, but also the experience outside just simply coming to dine,” he said.
Speaking at a separate investor conference following its full year results for the year 2 January 2022, Cook said the decline in like-for-like trading of c.3% seen in the eight weeks to 27 February, was down to the fact that delivery had not performed as strongly over the period, with the business focusing instead on “quality of revenue”.
Delivery currently makes up between 3-5% of revenue, but Hostmore is aiming to double this by the end of the year.
“Dine-in was consistent with the wider market over that period,” Cook said. However, trading has differed dependent on location, with its sites in Scotland and the northeast outperforming 2019 levels, while restaurants in the north and south have been quieter.
