Caffe Nero CEO Will Stratton-Morris regards the sheer number of operators competing in the British food-to-go sector as a greater challenge to business than Brexit.
The high street chain, which was founded by Gerry Ford in 1997, is the UK’s third largest coffee shop group with 700 units and holds the distinction of achieving more than 80 consecutive quarters of EBITDA growth.
But while the UK’s impending exit from the EU is expected to bring a whole range of operational and workforce challenges, Mr Stratton-Morris said it certainly wasn’t the issue that is most on his mind.
“I think the biggest challenge is not actually Brexit but the level of competition out there. There is a huge offer out there now and that means it is harder to grow your like-for-likes. I was looking at iced drinks over the summer. There are lots of other ways to get a beverage now – you’ve got gelato houses for example offering beverages at similar price points, so there is a lot of diversification and that is actually the biggest challenge.”
Mr Stratton-Morris said Caffe Nero – which unlike its nearest competitors has refrained from franchising – said its mission is to be “Europe’s leading premium coffee brand” and added that it would like to be thought of as the “Waitrose of coffee” for its attention to quality.
One of the ways it is trying to deliver growth and added value is through an improved food offer. It has just rolled out a new menu to more than 200 stores – with remaining sites to follow – after undertaking a comprehensive review of its food proposition.
He said the brand is aiming to change the consumer perception of coffee shop food as “fridges full of beigeness” by delivering more innovative items and a greater focus on things like fresh salads.
A large-scale advertising is set to get underway next week to make consumers aware of the changes.
Mr Stratton-Morris also described what it was like to work with company founder and entrepreneur Mr Ford, who is understood to have resisted numerous offers to sell the business over the years.
He said they agreed on “95%” of matters and enjoyed a strong working relationship due the values they share around service and brand.
Mr Stratton-Morris’ colleague Hannah McKay is expected to share more details of the new food offer at today’s Lunch! show in London, where she is a keynote speaker.