There were already increasing signs of tension in the casual dining market even before the coronavirus struck, with store closures, management departures and consolidation a feature of a landscape that many argued had reached capacity already.
But the events of 2020 have meant that the largest operators — renowned for huge store acquisition and their ubiquitous presence over the past five years — have been forced to rein in their kitchen projects and focus instead on consolidating their estates.
Company voluntary arrangements have become the norm for businesses looking to reduce exposure to unprofitable sites and burdensome rental agreements.
That was the case for The Restaurant Group, which reduced its Leisure division to 160 locations and put its Chiquito brand into administration.
The corporate restructuring, which doesn’t impact its Wagamama business, is designed to give each of its divisions the ability adapt to the challenges of social distancing uniquely, while keeping the customer at the heart of its decisions.
Rival Casual Dining Group, owner of the Las Iguanas, Bella Italia and Café Rouge restaurant businesses, has seen its portfolio shrink to 150 restaurants after calling in administrators.
It was forced to dispense of 90 UK sites prior to being snapped up by investor Epiris, which subsequently renamed it The Big Table.
Epiris has invested significant cash into the business to help spark a rapid unlocking of the group’s operations, wiping out its external debt and allowing it to plan for the future. “We inevitably emerge from this process as a leaner business, and one that is now equipped to navigate the challenges the industry faces, safeguarding thousands of jobs,” says CEO James Spragg.
Creditors, meanwhile, have approved Pizza Express’ proposed company voluntary arrangement, paving the way for it to axe 73 sites. But it remains committed to the roll-out of its FutureExpress programme to enhance not only its physical estate but the overall customer experience.
The business will continue to innovate and focus on areas it believes will provide a competitive advantage, investing appropriately to ensure that it can continue trading successfully in the years ahead.
YO! Sushi, another chain to go down the CVA route, said that getting the green light from creditors meant it could now restructure its business for future growth.
“This will ensure YO! has a solid foundation to continue to adapt to the changes brought about by Covid-19, and allows us to focus on reopening remaining sites and rolling out our new restaurant model,” says chief executive Richard Hodgson.
YO! Sushi has had to change its iconic conveyor belts as it adapts to the post-Covid safety challenges facing restaurants. Dishes were famously sent out on the conveyor belt for customers to choose from, but they have been reprogrammed so that they are only dispatched once orders have been placed.
Diners will order the dishes they want from their table using mobile phones and pay their bill in advance, minimising interaction with staff. Once the dishes have been prepared in the kitchen, they will be sent directly to the guest on the belt.
An interactive traffic light system will turn amber to inform customers when their food is on its way and green when the food arrives at their table.
Loungers, with its focus on suburban locations and lack of exposure to London, is aiming to return to its strategy of rolling out 25 new sites a year as soon as it can.
The company, which operates 167 Lounge and Cosy Club sites, has being working through a major ‘kitchen reset’ project that has seen back-of-house improvements completed at an additional 26 sites in the past year alone.
CEO Nick Collins said the investment is paying dividends by allowing it to achieve quicker service times and improved margins.
“This investment is resulting in more efficient processes, improved ticket times, better information and reduced staff turnover. Whilst this project was paused due to Covid-19 we look forward to getting it back on track.
“The combination of additional resource on the menu development side alongside investment in the kitchens will result in quicker, more consistent service for customers, improvement in our margins and better working conditions for our teams,” he comments.
One of the biggest trends of this year has been the growth of delivery, with many operators forming partnerships with third party providers such as Deliveroo or Uber Eats in order to generate revenue at a time when dine-in custom has been reduced.
This development has led to operators reviewing their kitchens in order to accommodate some retro-fitting or changes to operational processes. While cooking processes will remain the same, companies are thinking more carefully about the storage and transportation of food.
Heavier equipment such as holding bins and heated ovens become more important, because of their role in keeping cooked hot food in peak condition before it is sent out for delivery.
And even things like warewashing requirements can change when running a delivery operation. Understanding how existing equipment can be re-purposed to meet new demands can help to control workload, as well as maintain high standards of hygiene.
One of the most significant food delivery partnerships that has been struck involves Nando’s and Deliveroo.
The peri-peri chicken chain has previously only offered delivery from 180 sites — around half its UK and Ireland estate – but the tie-up will see that ramped up to all 360 restaurants, giving it a platform to provide nationwide delivery coverage.
Nando’s regards the partnership as a key step towards its vision of creating a multichannel proposition of delivery, click and collect and dine-in, which is central to driving customer loyalty.
“We are passionate about making Nando’s a truly multichannel business and are extremely excited to launch our new delivery service with Deliveroo as a major step in that direction,” said Nando’s UK and Ireland CEO, Colin Hill.