Jane Holbrook, chief of Wagamama, talks to MCA about how the brand is outperforming the market; looking to further expand in the capital; continued investment in its offer and people; getting to grips with delivery; taking its time over its US expansion; being brave in the current market; and why the company won’t be looking at acquisition opportunities.
On outperforming the market, Holbrook, who took up the chief executive role earlier this year, said: “We have a fabulous brand, a really great product, we constantly innovate, we never compromise on our food quality and we are investing. Where others are going ‘let’s cut the protein and put cheaper stuff in’, we are not doing that, we are doing the opposite of that. We are investing quite heavily in our product and changing the menu. We never discount, which is really helpful.
“I would say this, but I think we have the best restaurant people in the industry working here and they are really strongly engaged. We spend a lot of time and money keeping them really engaged. I really believe quite strongly that we are brave and we don’t cut our labour when other’s do. It is that classic trick that you have to get to whatever percent margin labour and you are a good manager if you are below it and a bad one if you are above it, we don’t manage like that. We want to give the customer a great experience and if we have to spend a bit more on labour that’s what we do. Don’t get me wrong, we may not always get it 100% right and there is a lot more we can do in this area, but it is a huge focus for us.”
The company said that it was performing better in the regions, but Holbrook said it was still enjoying growth in the capital, where it has opened a number of flagship sites over the last 12 months.
She said: “Our London estate is not growing quite as strongly as the rest of the country but we are seeing good eat-in cover growth across the capital. We are slightly perplexed as to the pressure on performance that people are talking about in London. We are still looking at expanding further in capital and I think we are under-represented in London. We were in London first and find ourselves in basements, smaller sites or just off pitch, so there is opportunities for us to change that. Both myself and chief financial officer Nick Taylor are cautious people and we will do any expansion in a slow and sure way, but I do believe there is still big growth opportunities in London for us.
“A good year in openings, is when every one of them opens brilliantly and makes decent sales. Decent sales for us at present is averaging over £40,000 a week and that is where we like them to be, but that is not to say we won’t look at smaller units. A good week in the office is a successful restaurant opening. We just opened Cheltenham which is an absolute cracker.”
As some of the brand’s peers have pushed back on expansion, Wagamama is looking to take advantage of any property or people opportunities that arise.
Holbrook said: “We have said to our teams that this a time to be brave. This is a time to continue to invest. Invest in our labour, people. We have got great people and we want to keep the, you do that by keeping them engaged and making them feel that we want them here and prepared to develop them. In terms of there being more opportunities to pick up property, I want to say there is, but the stuff that people currently want to get rid of is not the stuff we want to buy. We are not seeing much let up yet in terms of rents, hopefully we will. We are picking up some fantastic people from our competitors.”
On expansion in the US, Holbrook said: “We don’t like to go to fast, we have taken eight to nine years to get to this point. We are not rushing at this. It is an interesting market and all our research says that Wagamama can be very big in the US, but we are cautious folk and we will go at it slowly and carefully, it is going to be there for a long time. We are not going to waste a lot of money to get it wrong, so we will take our time to get it right.”
She said the company was “pretty happy” where delivery is in terms of its overall business. She said: “It currently makes up c7% of our sales. We had a little bit of a rocky start with it last year, because we weren’t expecting the volumes that would come through. We now work really closely with the delivery teams so we are not impacting the customer negatively, there is nothing worse than the consumer being intimated before they come into the restaurant or when they are getting served before someone who has paid for a seat. We have worked really hard at it and that’s why we think we are seeing an uplift in our eat-in covers. We are better at it than we were last year. We don’t want to grow it much more as we are happy with the level it is at. It is very much the icing on the cake for us.”
Despite rumours over the last 12 months, Holbrook said that on the back of the group’s successful refinancing, that there were no plans to sell the company in the next few years or acquire any further businesses.
She said: “We are good at what we do I have worked with businesses on acquisitions, but you can get distracted by the ‘new shiny thing’ and the synergies are never as good as you had hoped. We are good at what we do and we have the US project to work on and we excited about further expanding our franchise operation. We absolutely see ourselves being a single-brand company for the foreseeable. That’s where we are – modest, sensible and brave.”