Frankie and Benny’s is set to commence trials of a simplified core menu as it looks to improve its offer amidst a series of structural changes that will see it exit a third of locations that are no longer working for the business.
In order to ensure it makes the correct property decisions, parent company The Restaurant Group (TRG) has analysed every restaurant in its Leisure estate to determine its potential performance versus its actual performance.
In the case of Frankie and Benny’s, 31% of sites are in what it calls “structurally unattractive” locations, and as such, it will seek to exit these locations in future years.
Of the remaining Frankie and Benny’s locations, 60% are outperforming or in-line with their local markets, while in 40% it believes there is scope for operational improvement.
Upcoming activity includes continued improvement in the core proposition via new menus. The revamped core menu features a large reduction in the number of dishes and is designed to help its kitchen teams improve operational consistency.
This will be supported by marketing campaigns that are increasingly targeted to specific occasions and highlight new food development via limited time offers.
“We will invest in service and operational improvements in underperforming sites and actively manage the structurally disadvantaged tail,” the company said.
Although TRG admits that a number of locations no longer deliver the returns it desires, the brand has seen considerable activity over the past 12 months.
Last May it launched its new Feel Good Range, offering customers increased and improved healthier options. The range has proved popular with penetration at around 10% of sales, with the top performers cited as Nashville Chicken Skewers and Skinny Chicken Pizza.
Meanwhile, its payment at table feature, ‘pay my bill’, is improving in popularity with customers, with over 5% of transactions being made through this channel.
It is currently trialling ‘order ahead’ functionality in 25 sites. This gives its customers the ability to order and pay for their meal in advance, alongside a booked table, and have it ready for them when they arrive at the restaurant.
Initial feedback from customers has been “positive” and it will look to roll out more broadly later in the year.
The market backdrop for TRG’s Leisure business is challenging with a 27% increase in the number of branded restaurants over the past five years.
This has been accompanied with a dramatic decrease in the growth rates of both total sales and like-for-like sales every year since 2014.
Profitability has been further challenged by the pressure of rising costs, with the bulk of its restaurant wage bill inflating by around 4%, electricity costs at eight-year highs, and rent and rates costs remaining at high levels despite the decreasing consumer demand.
In response, it says it is focused on ensuring its brands are competitively differentiated, increasing its exposure to healthy and convenient options and capitalising on ‘off-trade’ delivery and collection sales.
However, given the market environment, it claims it is “acutely disciplined” in how it allocates capital and “highly discerning” as to lease renewal commitments and the flexibility inherent within them.