Around 18 months ago, Las Iguanas CEO Mos Shamel took a brave step in a bid to improve the guest experience at his restaurants.
Noting the importance of taking guest feedback on board, he spent considerable funds to take part in a scheme called ‘the DNA Project,’ which involved himself and a panel of his key team members sitting behind glass screens and listening to blind guest feedback.
It was clearly a painful experience — Shamel describes it as a “sobering moment” and jokes that the process essentially amounted to “spending four weeks in a dark dungeon and listening to people slag us off.” “My first marriage was less brutal!” he laughs, “that’s how brutal it was.”
However brutal it might have been, though, it’s clear that the strategy worked. At a time when many casual dining brands have faced something of a crisis, Las Iguanas bucked the trend somewhat and posted record figures last year. And Shamel believes this success can in part be attributed to those feedback sessions.
“There were 204 of them [participants] and we invited them all in six months later to show them the change,” he revealed on stage at the Commercial Kitchen show, “we’d used everything that they told us, changed the way the menus looked, and changed some of the dishes we did, and to be honest everything we did worked. And we just had a record year. It’s been phenomenal, and it’s really those people I want to thank!”
Positives and negatives
Shamel has clearly done well to respond to feedback, and is reaping the rewards for doing so, but he concedes he’s not always overjoyed at seeing negative reviews — especially when they don’t come from ‘real guests.’
“The ones I don’t tend to respond well to are reviews from some idiot ‘foodies’ who go in and write for certain magazines or restaurant sections of papers,” Shamel explains. “We’ve got one at the moment in Scotland, I won’t name where it is. He’s a bit of a dinosaur, and he’s gone in and written something bad about us and my right to reply is ‘not interested!’ We’re doing really well at the moment in that site and he’s just talking, frankly, a load of crap!”
And the facts do point towards a business which, in relative terms at least, is thriving. Las Iguanas now has 54 restaurants in the UK, employing 1,800 staff, and last summer opened its first overseas restaurant in Gibraltar.
The brand also recently opened its latest store in Bracknell — where Shamel claims business is “flying” — is due to open another in Watford later this year, and is still looking at further expansion, although Shamel remains coy about possible locations of future restaurants. Furthermore, the company came 26th in The Sunday Times List of best companies to work for — and number one if you count only businesses with 20 sites or over.
When you consider the tribulations that have faced some other notable casual dining chains, it’s difficult to view this as anything other than a resounding success.
Despite all the positives, however, things have not all been plain-sailing and, as Shamel points out, certain obstacles have created difficulties and slowed down his ambitions.
“Well I think the dreaded word, Brexit, which I think we’re all bored to death with, I can’t help but bring that up,” he notes. “I think that has caused chaos in our industry.”
And while Las Iguanas might have coped better with this chaos than some of its competitors, it has not been immune to difficulties. Shamel admits that in an ideal world he would have 70 restaurants open now rather than 54, and he claims that Brexit has been a driving force in preventing the further expansion that he desires.
“Definitely Brexit has created that moment of truth where you’re pressing pause,” he says. “It’s not just about finding the right location. You’ve got to think, is enough employment there, are we going to get the quality into the business? When you’re investing a million pounds in a restaurant, you’re starting to think about lots of different things now… so we definitely paused…and I think that’s a fall-out of Brexit.”
Of course, there are other issues facing the casual dining sector that are independent of Brexit: changing consumer tastes, new allergy labelling legislation, and the increasingly large influence of delivery chains such as Deliveroo and Uber Eats are all hot topics in the industry.
Shamel’s view on the significance of these issues varies. With regards to the first of them, changing consumer tastes, he does not see much of a problem. Although he does acknowledge that more people are moving towards healthier eating habits and are drinking less, with plant-faced diets and low alcohol drinks all the rage, he has not noticed this have much of an effect on sales at his restaurants. 40% of Las Iguanas’ business, he says, still comes from alcohol and he estimates the chain sells over 10,000 Porn Star Martinis — their most popular cocktail — a week.
“I think people tend to come to Las Iguanas not for a healthy night, let’s be honest,” he says. “They come in and go, “right I’m going to go for it, it’s my one day off, I’m going to get a few cocktails here, I’m going to go and eat that, and then I’m going to go back to the bar, I’m going to stagger into a cab and I’m going to go home.”
Allergy labelling, though, concerns Shamel slightly more. Although he has not gone as far as some of his competitors — who he claims have stated that anyone with allergies should simply refrain from buying their products — he confesses to understanding their reasoning, and describes the issue as “a really scary topic.”
He says that Las Iguanas has added lots of disclaimers, and that he will spend more time with procurement to limit the problem.
“It’s something I’m interested in, obviously, and that I’m concerned about,” he says, “I think it’s just going to get worse, I think it’s just going to get bigger and bigger and bigger and obviously some of the stuff that’s been in the press in the last year has been particularly scary.”
The issue with delivery services is slightly more complicated. There is no doubt that Las Iguanas’ has done well out of the delivery market – Shamel has created two new brands, Blazing Bird and Bang Bang Burrito, both of which sell products out of Las Iguanas’ kitchens and which Shamel reckons amount to the equivalent extra revenue of having two extra sites — a bonus he describes as ‘significant’.
But he acknowledges that delivery can often create a problem for consumers who come to the restaurants themselves — and recounts a story that shows he has been on the receiving end of this himself.
“I was in Leicester Square a few weeks ago, about 2 o’clock in the morning, I was quite drunk and I was in Five Guys,” he says. “And that exact thing happened to me, there were helmets everywhere, literally I thought I had walked into a Star Wars zone! There were helmets, and I was trying to battle through them, and it felt like they were much more important than someone who was there with cash and it took an age. And it doesn’t look great, I admit.”
However despite acknowledging the problem, Shamel remains unconvinced by the idea of ‘dark kitchens.’
He claims that he does not envisage them as a cost-effective solution to the problem, and argues that the extra costs of setting up and manning an extra kitchen may well outweigh the extra income they would make through delivery services.
Whatever the issues facing it, however, it has clearly been a triumphant year for the chain and its CEO, and Shamel will be hoping for more of the same this year for a business that he has been part of since 2004 and which he claims to love.
It will be interesting to see how the chain navigates the hot topics he discussed at Commercial Kitchen, and with the promise of a new app, several additions to the menu and the goal of further expansion, it seems there is plenty to look forward to as well.
Las Iguanas makes most of data insight tools
Las Iguanas has reduced its in-venue bill comps by 25% over a two-year period as a direct result of using Feed It Back.
After implementing technology from the customer feedback and online reputation specialists, Las Iguanas receives 10,000 pieces of feedback a week. This has given the chain the insight needed to make informed business decisions and reduce the number of meals that the restaurant is fully complimenting from 1.2% of gross revenue to 0.9% over the last two years.
Thanks to the insight and engagement tools, all of its sites have now achieved a 4-star or higher rating on TripAdvisor.
In addition to the range of commercial and reputational benefits, Las Iguanas has benefitted by gaining an additional 500 new database subscribers per month since adopting the technology.
Lisa Campbell, guest experience manager at Las Iguanas, commented: “Ensuring that our guests have a fun, enjoyable and outstanding experience at Las Iguanas is our primary focus. The use of Feed It Back’s technology has enabled us to gather high volumes of true customer insight so that we can innovate and evolve our offer based on what the customer truly demands.
“The technology has become embedded into our everyday practice across the entire business, and has generated a number of tangible commercial benefits, including saving us hundreds of thousands of pounds.”