Inside Track by Mark Wingett
If you haven’t heard the news, 2013 is the year of chicken. Talking to a well-known sector investor this past week, he lamented the fact that up to three out of five concepts pitched to him recently were chicken led. He was tempted for a split second to invest in a pork-led one just for a point of difference.
Clockjack Oven, which includes ex-Tragus chief executive Graham Turner as an investor; Soho House’s Chicken Shop; Wishbone in Brixton from one of the team behind MeatLiquor; Chooks, the latest opening from Gideon Joffe, son of Giraffe co-founder Russel; and Roost from Canteen co-founder Cas Titcombe, are all chicken-led concepts that have already hatched or are about to launch in the capital. More are tipped to follow.
Lots of chains not known for chicken have been adding more offerings to their menus, while even small local pub groups have jumped on the trend bandwagon, take CD Pub Co, the fledgling Warwickshire-based group, which will shortly open its own take on the format with Flat Chicken.
Which bodes well for the "daddy" of the UK’s fast-casual sector and envy of most other leading operators, Nando’s, the chain led by Rob Papps in the UK and backed by Capricorn Ventures. If it indeed needs a helping hand.
Earlier this year, it was named Best Company at M&C Report’s Retailers’ Retailer Awards, and is expected to feature heavily again with voting for next year’s event starting next month.
In a consumer landscape where value, time saving, engagement and community figure highly, Nando’s is an exemplary box ticker. Research from earlier this year found that it was ranked number one in a poll of 5,000 consumers as their first choice to eat. In London, it was named as the preferred brand (with 17.7% putting it first), as it was among the under 35s, and particularly students. Among 18-24s, 18.8% would choose it first, alongside 15.6% of 24-35s. In all, 26.4% of adults used Nando’s at least once in the previous six months, compared to 26% using PizzaExpress and 24.9% using Frankie & Benny’s.
Not bad for a chain that until now has steered away from conventional marketing, relying on its popularity amongst the teen market and young celebrities to impressive grow market share. The appointment of its first head of brand communications and the start of a search for a head of digital earlier this year shows the group plans to raise the profile of its eponymous brand further.
The figures are also impressive. For the year to 26 February 2012, turnover, which included the first full-year of trading from Gourmet Burger Kitchen (GBK), surged through the £400m mark to stand at £419.6m, up from £333.8m the previous year. After the costs associated with the acquisition of the then 53-strong GBK, the group returned to profit in the year, with pre-tax profit standing at £14.7m against a £7.1m loss in 2010/11.
The group’s core brand operated 260 sites at the year end and has added a further 11 to date so far, with a strong pipeline in place as its looks to reach its mooted target of 400 Nando’s in the UK.
The company said that it had made "significant and exciting progress" during the year, which includes consolidating and fine tuning the GBK business under chief executive Alisdair Murdoch. Over the last 12 months, under a newly assemble management team, GBK has returned to the acquisition trail, improved its offer and gained traction through positive like-for-likes across the first tranche of upgraded units. It is pleasing to see that the leader of the first wave of upmarket burger formats is starting to find its feet again after a couple of "wilderness" years.
With Capricorn’s backing it has invested heavily in training and product, while keeping its price point accessible. Byron won’t have it all its own way as it spreads it wings regionally over the coming 18 months as it seemed it would up to a year ago, which will be a positive situation for both brands, in terms of keeping the competitive juices flowing and the continued education of those outside the capital about "better" burgers.
But that is for another discussion, as is the continuing impressive growth of another Capricorn-backed chain, Wahaca, which has two of the most standout openings of this year under its belt in Charlotte Street and on the Southbank.
At present, when it comes to the UK’s fast casual market and the growing chicken trend, Nando’s remains top of the pecking order. It will take some shifting.
