Casual Dining Group’s non-executive chairman Martin Robinson is one of the most experienced leisure operators around, having led the buy-out of Center Parcs in the nineties and chaired the board of Wagamama. In a special Q&A session at the Casual Dining Show, he outlined how the owner of Bella Italia, Cafe Rouge and Las Iguanas is overcoming some of the biggest challenges being thrown at the UK restaurant sector.
Third party food delivery is a huge phenomenon in the market at the moment. How are you handling this at CDG?
I think it is fair to say that we fairly reluctantly embraced it but now that we have embraced it I think I am glad that we did. The thing about delivery is that there are certain elements of common sense about it — the reason that traditionally Indian and Chinese food was always the stuff that you used to have delivered to your home was partly because it is quite difficult to cook. Most people can’t cook a very good chicken biryani and also that food type travels well, so it can sit on the back of a motorbike for 20 minutes and it still tastes ok. If you do the same thing, as unfortunately people are doing with, say, a burger or chips, it doesn’t taste so good.
When I was at Wagagmama we were doing food delivery in the US many years before it was happening here. That was also a type of food that travelled well and that people couldn’t easily cook at home. So I think the delivery market will continue to grow but it will grow most strongly where the food type is appropriate to that delivery mechanic.
Which of CDG’s brands is best suited to delivery?
Las Iguanas, I would say. Most people don’t have the ingredients that are required to cook that type of food at home and it does travel well, and we have done all the tests on it ourselves. Certain types of Bella Italia food travel quite well, too. I personally think that with Cafe Rouge, would you actually order, through delivery, some sort of duck dish or whatever? I am not so sure about that to be honest.
Do you produce food separately for delivery or offer delivery-only products?
We don’t engineer products especially but we limit the products that can be sold on Deliveroo. And Deliveroo is fine about that. UberEATS is fine about that, too. They don’t want stuff that is awful when it arrives there. In my opinion they probably don’t do quite enough testing of that themselves, we have had to do all that testing. But yes, we limit and we will say, ‘no, that thing’s not available’. That’s what we do. I am part-owner of another business that does have its own delivery hubs in London and in that that particular case we are engineering stuff especially for delivery. So I think you can do both.
“I didn’t particularly enjoy that experience but conceptually that will be the way that people will be forced to go”
You work closely with investors. How are they seeing the eating out market in the UK?
As a general thing, I think non-UK investors looking at the UK from the outside — not just talking about dining but in general — are thinking that UK consumer-facing businesses are not a great place to be investing right now. So you are fighting a tough battle with non-UK investors. However, if you have won that battle the next thing is to say where within the UK leisure sector would you invest? I think that food is quite a good sector in which to invest because even though there are lots of headwinds facing the industry, the stronger players will survive.
Which headwind are you most worried about?
The provision of appropriate people. The majority of the people we employ on the shop floors in the restaurants are non-UK, were not born in the UK, and clearly something is going to happen with that. And we don’t know what it is — that’s not yet a topic which has been properly discussed. The whole topic about the provision of labour, and where it is going to come from and the cost of it and the ramifications of Brexit, has only received 1% of the attention of business rates.
What are you doing about it?
We are trying to do what every good business would do, we are improving our training programmes, we are improving the way that we recruit people, and I have to say that we are looking very seriously at ways in which we can actually cut the numbers of staff required. I was in Hong Kong three or four weeks ago and I ate in a restaurant where you walked in and were automatically given a little mini iPad, and then you sat down, placed your order and the food arrived on a track that went past your table. Literally the first contact that you had with a person was when you were paying and they could have done that in an automated way too. Now, I didn’t particularly enjoy that experience but conceptually, unfortunately, that will be the way that people will be forced to go if there is no labour and if the labour that there is is dramatically more expensive.
The former Tragus business (now CDG) was not in the shape you wanted when you took it over, but you have turned it around in the last three years. How have you done that?
By effectively reinventing the brands, and what has triggered that reinvention of the brands is rigorously going back to basics and understanding who the customers are. Who are the customers of Cafe Rouge? Well, they are actually not at all who we thought they were. Now we know who they are, we know exactly what they want and we know how to provide it for them. That is the most important thing. It doesn’t matter that there are 100 Cafe Rouges, it almost doesn’t matter that it used to be almost a dead brand. What matters is your local outlet that you go to. You don’t go to 10 different Cafe Rouges, you only go to one generally and what matters is whether it is any good or not and whether it is providing quality food at the right price. So anybody can do that, whether you have got one outlet or 50 outlets, or 300 outlets. We can all do that — and that’s what we have to do.
How do you remain agile when you have 300 restaurants?
We have tried to create a platform which allows the individual brands to not have to worry about all the stuff they don’t like worrying about. So procurement, site selection, legal and all those types of things are done by people that are placed centrally. But I think the agility has to belong in the individual brands. When you look at brands that have struggled, and we own some of the brands that have been struggling historically, I would use the word ‘agile’ to describe the problem they had. We have tried to build that agility back in, partly by giving more autonomy to store managers in terms of how they market their outlet locally and things like that.