The CEO of the Jamie Oliver Restaurant Group, which closed 12 of its Jamie’s Italian restaurants in recent weeks amid reports that it has £70m of debts, has admitted that the company had allowed competition to ‘encircle’ it in the last few years and had failed to act.
Jon Knight, who was appointed CEO of the Jamie Oliver Restaurant Group in October, cited complacency in several key areas as one of the main reasons the business is in the position it is today. As well as ditching a third of its Jamie Italian’s estate, it instructed property agents to find a taker for its two Barbecoa sites in Central London last month.
Speaking at the recent Casual Dining Show, Mr Knight said that the business had not taken notice of the competition and failed to take stock of how its rivals were developing.
“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, without noticing that people around us were starting to form new businesses.”
But he added that steps have already been taken to return the group to growth, which includes reinvestment in its estate and remodelling.
“We didn’t innovate enough in the last decade so 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.
“The other businesses very rightly wanted people trained by Jamie Oliver. It’s a very, very strict and rigorous training programme and dare I say it, the competition were saving a bit of training costs because they were getting very highly trained operators coming into their businesses.”
Knight said that completing the recent CVA was a “really tough decision” that the group took “incredibly seriously”. The group has now begun the process of speaking to all of its suppliers to ensure they are “on board” with the chain’s plans.
He added: “It’s not easy out there, there’re lots of pressures and we’ve all got to take some radical action to make sure we’re not letting those pressures overcome our business. So we are going through some tough times. I think we all are in some way or another.”
Knight also revealed that franchising is going to be a key asset for the group moving forward. He said: “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’ really exciting. Please watch out for an announcement on that soon.”