Loungers uses lockdowns to work through big strategic objectives

Lago Lounge, Rushden Lakes

Expansive restaurant and bar group Loungers has described how it used the closure of its restaurants during lockdown as a force to improve the business for the future.

With Covid-19 preventing its 175 sites from opening during large swathes of the past 18 months, bosses at the publicly-listed chain used the time to execute a number of key strategic changes.

Writing in the company’s latest preliminary results report, chairman Alex Reilley said: “Whilst none of us would ever again want to see the business closed for any period of time, having the opportunity to work through really big strategic objectives without the distraction of a trading business has been invaluable.

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“The senior management team, supported ably by the plc board, has worked through a series of challenges focusing on how we can make the business better. The Loungers way has always been about constant evolution, innovation and improvement and we have made a great deal of progress in addressing and accelerating some long-term objectives.”

Mr Reilley said the company has continued to evolve both its food and drink menus with a focus on some more comprehensive changes to the Cosy Club food menu, which are currently being trialled.

It also tweaked and refined its web-based at-seat ordering app, having launched it in July 2020 after just six weeks of development.

“Orders through the app account for over 70% of all sales in Lounge and whilst we would expect this number to reduce when our customers are once again allowed to order at the bar, it’s very clear that ordering at-table is a big behavioural shift that is here to stay.”

Making improvements to outside seating areas had been a key objective for the business before the pandemic struck as the company felt the design of its external areas didn’t reflect the strong look-and-feel of its sites internally.

It has now invested in around 50% of the overall estate, with a focus on making the most of the space it has and significantly improving the appearance of outside dining areas.

“There is an obvious short-term benefit from this investment, but more importantly we will reap long-term benefits too as the external areas of new sites will be much better designed going forwards,” said Mr Reilley.

Loungers had been opening new sites at a rate of 25 a year before the crisis and while Mr Reilley said that having to take a break from the roll-out was “unwelcome” it gave the business time to review its design and build processes.

“This has resulted in a focus, and a plan, on how we can build better and more efficiently. We have also challenged ourselves to continue to turn the dial on our designs and to build and open better sites from a look-and-feel perspective.

“I am really pleased with the way this is evolving and believe our most recent openings represent a significant step-change in the quality and inventiveness of our design.”

Loungers has also made significant strides in the construction of its pipeline of new sites. “In the near 19-year history of Loungers we have never had a better pipeline of sites and such is the quality that we have genuine competitive tension. Critically I believe the sites in the pipeline, which stretches well into FY23, represent at least top quartile opportunities and in some cases I see sites that I believe could be in our top 10 best performers.”

Mr Reilley said the company had traded “very strongly” when it has been allowed to open and said like-for-like sales had at times been “off the scale”.

Since 17 May, when it has been permitted to trade indoors, revenues are up 24% compared to the same period in 2019.

The company has also restarted the roll-out of new restaurants, with seven sites opened in its current fiscal year.

Mr Reilley said its strong trading, coupled with the strength of its property pipeline, has encouraged it to return to its pre-pandemic run-rate of 25 new site openings per year “earlier than we had anticipated”.

Kitchen investment key to faster ticket times and happier staff, says Loungers


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Andrew Seymour

The author Andrew Seymour

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