Red Hot World Buffet, the Risk Capital Partners backed buffet group, is targeting two or three more openings over the next few years and could open more sites in the south, with Southampton among its list of target locations, chief executive James Horler has told M&C Report.
He said the company’s latest opening, a 16,000 sq ft site in Leicester, “moves the needle for the whole buffet sector”. It served 398 covers on its opening day on Monday, which Horler said is more than a mature casual dining business would take on a Saturday night.
“It has a completely new feel about it,” said Horler. “It’s a buffet restaurant but with a casual dining atmosphere, design and approach.”
He said the Leicester site, which cost £2m to develop, is unusual in that it has a number of themed rooms rather than the typical “cavernous” style in a buffet restaurant.
Horler said this could be the model for further openings, although he suggested that the format could continue to evolve. “I think what we’ve done in Leicester moves the needle for the whole buffet sector. It’s very populist, it’s very western, it’s less Asian but still has Asian influence. It has a much broader appeal in its design and offering.”
He added: “We’re focusing on families, we’re focusing on students and we’re focusing on groups. They are the three target audiences for us.”
Recent changes at the seven-strong group have included employing general managers from casual dining chains such as TGI Friday’s, Nando’s and The Restaurant Group, undertaking repairs and maintenance at the sites and repositioning the food offer.
“Trading has remained pretty good throughout,” Horler said.
“We’re on track with where we thought we would be. We’re pleased with it overall. We’ve had some very tough decisions to make that we’ve made, and we’re confident that within our first year that we would have made significant strides forward and that would allow us to expand, and have a business that has much broader appeal.”
Regarding acquisitions over the next two or three years, Horler said: “We’ll be talking about two or three.”
He expected investment costs to be below those in Leicester, which faced some extra costs related to the property. “I would like to see us spending nearer £1.5m.
“We are not going to crack on and spend £2m everywhere until we know what works and what doesn’t and how to maximise the investment to get the returns for everybody. We have a target list of towns we’d like to go to and we have a demographic study done for those.
“There are towns that we’ve identified that we believe have the density of the right audience for Red Hot, and where we think we can get property costs that are 5% of revenue - the one good thing about Red Hot is the property costs as a percentage of revenue are very low.”
Other Red Hot sites are located in Manchester, Nottingham, Leeds, Liverpool, Milton Keynes and Cardiff. Horler said the Midlands and the north are more typical areas for the concept, but he did not exclude more openings in the south. He said Southampton is “high on our list of target towns”.
