The Restaurant Group has pledged to invest in more delivery-only kitchens following its acquisition of Wagamama.
The owner of Frankie & Benny’s and Chiquito yesterday agreed a £559m deal to purchase the Asian-style restaurant chain through a combination of cash, debt and a rights issue.
TRG’s management recognises delivery as a significant area of opportunity, particularly as Wagamama is already one of the top brands on the online delivery platform Deliveroo.
It says the enlarged group will be well-positioned to invest behind “structural growth” in the delivery space including through delivery-only kitchens. The company claims that Wagamama already has an “early-mover advantage” in this space, which it will look to exploit.
Delivery kitchens are likely to become even more critical in future, given that its business is now split across different day parts.
In terms of its restaurants, 56% of visits occur at lunch and in the afternoon, and 43% in the evenings. 1% is over breakfast.
Wagamama recently joined Deliveroo Editions and believes the delivery firm’s ‘dark kitchens’ model is an ideal way to grow its business.
Customers in Battersea and Clapham are now able to order meals from Wagamama cooked and prepared at Deliveroo’s purpose-built, delivery only, “super kitchen” in Battersea.
The menu, chefs and taste are the same as Wagamama customers are used to in-store, but prepared from kitchens specifically designed for delivery.
Under Deliveroo’s Editions model, it provides restaurant partners with the infrastructure – including bespoke kitchens, local marketing support and fleets of riders – that allows them to launch delivery-only menus catered to local tastes.
Additionally, there could be further opportunities for kitchen development through TRG’s plans to create a pan-Asian “convenience” format. As a first step, it intends to pilot a food-to-go format in London which would have future application within its Concessions division.
TRG will also be looking to use the acquisition to benefit from the added economies of scale that it brings, especially in terms of buying power and operational capabilities.
Suppliers will no doubt be keeping a careful watch on developments once the deal closes, although TRG has confirmed that Wagamama will still operate as an autonomous business.