The Jamie Oliver Restaurant Group had a turbulent entry into 2018. Weeks of business troubles culminated in a CVA involving 12 restaurant closures, leaving the foodservice industry to speculate on the fate of the brand. But now, CEO Jon Knight, has vowed to face up to the group’s ‘complacency’ and defiantly declared that the ‘fight is on’.
It wasn’t all that long ago that Jamie’s Italian opened 31 locations in the space of just two years as it surfed the crest of a casual dining wave that appeared unbreakable. Nobody at that time could have ever forseen the developments of the last few months, with the group announcing a CVA and closing 12 sites amid reports of debts totalling £70m.
The obvious question, then, is what went wrong and what does the future now hold for the brand?
The first signs of trouble began appearing towards the end of 2016 and the start of last year, when sales and covers dipped across the UK estate. Jon Knight, CEO of the Jamie Oliver Restaurant Group, who was brought in during October and given the task of turning the group’s fortunes around, admits the chain had lost its way.
“We hadn’t acknowledged how much the UK high street had changed in the last 10 years and we hadn’t adapted our restaurants in line with Jamie’s vision and how he had changed in the 10 years we had been operating,” Knight acknowledged during his keynote slot at the Casual Dining Show this year. “The challenges in the UK appeared to be growing. And the international business, although reasonably isolated, was at risk of contagion if we didn’t resolve the issues in the UK estate.”
Referring back to October, Knight recalls how he was asked to step up and take on the top job at the company. Things did not pan out as he expected to, he says, and in spite of a good concept and talented team, Knight was aware that the business model was flawed. He needed to reassess the situation and install new practices to correct the business.
“My first job was to conduct an in-depth root and branch review of the entire business to ascertain what decisions needed to be made, what was wrong, and what we needed to do about it. The same decisions, I’m sure, a lot of my fellow restaurateurs are making at the moment as well. It’s not easy out there, there are lots of pressures and we’ve all got to take some radical action to make sure we’re not letting those pressures overcome our businesses. We are going through some tough times — I think we all are in some way or another. But I strongly believe that Jamie’s business has a reason to exist. It has a place on the high street and it has a future.”
We hadn’t adapted our restaurants in line with Jamie’s vision and how he had changed in the 10 years we had been operating”
Knight admits the business was guilty of becoming “a little bit complacent” in several key areas. For a start, the business didn’t take notice of the competition. It didn’t take stock of what they were doing and how they were developing.
“Other brands started doing what we were doing at a more affordable price and with the added benefit of being new and exciting. We didn’t reinvest in our estate or in our brand so other newer, smarter and even smaller restaurants started to overtake us. Looking at everything and going through everything we have over the last three months, we’d almost become besieged. The competition has moved around us and grown around us and circled us. We’d spent a few years, conquering and settling into new territories and towns. We were really happy with our victories so we rested on our laurels a bit.”
He describes the decision to shut 12 sites as “incredibly tough” and one of the hardest he has had to make in his career. “What I also realised was that completing the CVA was just the start. The CVA isn’t the end of anything. I’ve got an estate of 25 restaurants that I’ve got to inspire, lead and I’ve got to put practices into place to move those restaurants forward. I’ve got to talk to all of our suppliers and make sure that they’re onboard with what we’re doing and we have to start to manage our supply chain.”
He adds: “We will ready ourselves for the fight ahead and we will be ready to jump on every opportunity that becomes apparent to us and we will continue to grow the business.”
Putting the fighting talk aside for a moment, the group has also made some other significant changes behind the scene. Joining its fragmented offices together all in one site in London is a move designed to make the business more efficient and effective and is part of its plan to reconnect the concept with its figurehead. Knight admits that the group did not innovate enough in the last decade but assures that “we’re sure as hell making up for it now”.
“We’ve done a huge review of our labour costs, we’ve just put in a new menu model that’s already made the improvements in food costs and labour that we needed and that’s a huge part for us. We’re also looking at refreshing some of our sites and finally investing in our estate and we’re making sure that we’re caring for our staff. I’m fed up of losing my staff to the competition, I’m fed up of them leaving. So we’re going to start investing in training, we’re going to start paying them a decent salary.”
Keen to highlight other parts of the business which have largely been eclipsed by recent news of the group’s closures, Knight reminds us that six “flourishing” sites have opened internationally since December. Opening 31 restaurants over two years, he believes that the group has launched more restaurants than any other European franchise business in the industry, proving the potential of the model.
We’ve done a huge review of our labour costs, we’ve just put in a new menu model that’s already made the improvements in food costs and labour that we needed and that’s a huge part for us”
“Franchising is going to be a huge, huge asset for us going forward. We’ve done a lot of development with SSP and we’re taking that learning and everything we’ve learnt from our two incredibly successful sites down in Gatwick Airport, and we’re going to start to diversify off the high street. And that’s really exciting. Watch out for an announcement on that soon.”
Knight is clearly confident in his group, its longevity and the team leading it. “I’ve got a new and revitalised management team, which I think are the best in the industry. We’re strong and getting stronger, we’ve just had a little bit of work to do to make up for lost time.”
Jamie Oliver himself is well-accustomed to fighting for change in the public eye, but could this be his company’s toughest battle yet?