Andy McCue, chief executive of The Restaurant Group, has said he wants to grow the Brunning & price estate by double digits every year and has insisted the ailing Frankie & Benny’s brand can “get back to where it was and beyond”.
McCue, who was appointed in September, yesterday updated on a “disappointing” year for the company, driven by underperformance across all three of its core brands – Frankie & Benny’s, Chiquito and Coast to Coast.
The former has been underperforming the market for four years, the company admitted yesterday and has seen visits fall 23% since 2012, with consideration down 8% and awareness falling 3%.
But McCue told MCA: “Frankie’s core customer is families. Principally families out for a treat or out and about while they’re doing their shopping or going to the cinema. We think the brand has fantastic appeal to that audience but there is a lot of work to do. We need to correct for some of our self-inflicted errors and as part of that we will be launching a much more competitive menu in Frankie’s. It’s definitely our ambition to get the brand back to where it was an beyond.
“Value is important but it’s not nearly the only thing. We are also going to try to improve our customer service levels, especially at our busiest times - making sure we have the right number of colleagues to support our guests. We are thinking about a whole range of initiatives and price is obviously one of those.”
The company also revealed that Chiquito had been underperforming he market for one to two years but to a lesser extent than Frankie & Benny’s. Visits have fallen 16% since 2012, with consideration down 8% and awareness -5%. Coast to Coast meanwhile has seen the greatest extent of underperformance against the wider market – over a period of three years.
However, McCue refused to be drawn on whether there would be changes to the individual management teams at the brands.
He said: “We have strengthened the team. We think we have a good mix of some new people as well as existing members. We think that’s a nice balance.”
McCue insisted that he was well aware of the extent of problems in the business when he joined and that he believed the challenges facing it were surmountable.
He said: “I went into the business with my eyes open. I knew that the leisure brands had been in decline and had been for some time and that the business was in clear need of a turnaround across multiple brands. I also knew that we had made some mistakes that could be corrected but obviously that isn’t enough to get us back to where we need to be. I could see where I could add capabilities and strength to the organisation, which is what we’re focussing on now.”
He also pointed to positives within the business: “Our pubs business is a strong business that is well-differentiated and in reasonably defensible locations. I think we can grow that business quicker than we have done. The concessions business reflects the strength of capability within the group. We operate across 37 different brands in 59 sites in 12 airports. Operationally very strong.”
Of the 16-20 openings planned for this year, there will be seven Frankie & Bennys and seven Chiquitos with the rest made up of pubs and concessions.
However, McCue said he envisaged a much faster growth rate for the Brunning & Price business in the longterm.
He said: “I’d like to get it organically to double digit number of openings each year. Over the medium-term I think that’s an achievable target because they’re quite bespoke properties.”
Asked if he would look to introduce new brands to the business, McCue said: “The priority today is backing the brands we have. We feel we can turn them around and improve their performance. My ambition is that we grow the business. The journey doesn’t end when we turn the business around.”
The business s ended the year with 493 restaurants, compared to 506 at the end of 2015. This was a result of 37 closures, compared to 24 openings. Eight further sites have been identified for closure and 66 have been impaired.
McCue said one of the key focuses for the business was to review how its processes were impacting on the focus on customer experience.
He said: “It’s my nirvana to have 100% of our colleague time focussed on things that support the customer. In any business there is naturally administration stuff you need to do that takes your focus away from the customer. We have to make sure the time we spend on that is as small as possible. I’m talking about things like ordering, taking receipt of delivery, scheduling. They are processes that can be automated and executed more quickly.”
On headwinds he said: “We are facing the same kind of challenges as anyone else. There is the pressures on rates – rent and rates will be a combined headwind of £5m this year plus purchase cost inflation of between £5m and £7m – principally borne out of exchange rate fuelled inflation. Energy costs will go up by a couple of million. Then there are the natural inflationary costs of the NLW and apprenticeship levy.”
On where he expects the business to be at the end of this financial year, McCue said: “This is going to be a long journey so by this time next year we would expect to see progress against the initiatives we are implementing but this is going to be a process of continual improvement. I would hope we are starting to see volume growth in the business. That will come before like-for-like growth.
“No-one is expecting this to be an easy journey or a quick win but we have focussed plan to turn this business around and we are putting that into practice.”
