Spotlight: Restaurant chains defying the high street downturn

Pizza Express Pizza Express has been a mainstay on the UK highstreet since it was founded in 1965. In spite of a fairly saturated Italian dining scene the brand has maintained its presence where a majority of its competitors have struggled, including Jamie’s Italian, Prezzo and Carluccio’s. One of the reasons behind the company’s success is of course its strong brand equity built up over decades, but it is notable for its social media marketing. Tim Love, the man in charge of the chain’s social media marketing strategy, cites the use of video as an area where a restaurant has an advantage over other businesses. The chain was most recently acquired by Chinese group Hony Capital for £900m in 2014, and it currently has 470 branches across the UK, employing over 10,000 people. Turnover increased by 1.6% to £543m for the 52 weeks ended 30 December 2018, although EBITDA dropped by 15.3% due to an “immature market” and unseasonal weather, the group said. At the time of the results, Jinlong Wang, group chairman and CEO of Pizza Express, said: “Although 2018 was a challenging year for the casual dining sector, we are pleased with the overall group revenue growth of 1.6%.” Azzurri Group Azzurri Group, owner of Ask Italian and Zizzi has managed to successfully expand both its main brands in recent years, in spite of the market saturation. The group employs nearly 6,000 people at over 250 restaurants across the UK, and recently acquired Coco di Mama, the third chain in the group’s portfolio. The group attributes its success to the early adoption of the vegan trend at Zizzi and Ask, according to Tastecard founder Matt Turner. The groups results for the period to 1 July 2018 had risen 8.5% to £279.8m. Adjusted EBITDA remained broadly in line with last year at £37m. Results were boosted by opening of 15 new restaurants across its brands. Harvey Smith, chairman at Azzurri, said: “It has been another successful year...with the group continuing to demonstrate that it can outshine its competitors in a crowded and challenging market. We believe our teams to be among the best in the industry, and it is thanks to their efforts that our brands continue to thrive.” Wagamama Asian noodle chain Wagamama has continued to thrive in an uncertain market and outperform its competitors for five years. The chain was launched by Alan Yau in 1992 in Bloomsbury, London and has rapidly expanded to 190 branches around the world including the United States, UAE, Spain and Italy among others. It was acquired by Frankie and Benny’s owners The Restaurant Group (TRG) last year for £559m. TRG identified growth areas, such as takeaway-only concessions and the “piloting of pan-Asian cuisine ‘food-to-go’ offering” through delivery, as part of the reasons behind the success. In its latest set of results, turnover for the 40 weeks to 3 February 2019 rose by 13.5% to £260.5m, Adjusted EBITDA was also up 10.5% to £38.7m. Earlier this year, CEO Emma Woods said: “We want Wagamama to be special, both the bowl and the soul, and so have continued to invest in our amazing teams, our vegan food and our customer service this quarter. “As a result, we have sustained our outperformance of the UK market. The business is well prepared for, and excited about the next stage of its development, with The Restaurant Group as our new owners.” Nando’s Nando’s is currently one of the largest restaurant groups in the industry since its moved into the UK market back in 1992, five years after its inception in 1987 in Johannesburg, South Africa. The first branch in London opened up as a takeaway venue, before focus was switched to its current mixed-service model. The casual dining brand currently has over 390 branches in the UK and Ireland, and employs over 19,500 people. Success in recent years is partly down to successful marketing, with many people including journalist Kashmira Gander citing celebrity endorsements and the cult ‘Black Card’ - a near-mythical VIP scheme which promises holders unlimited free food - as contributing factors, alongside discounts to NHS staff and the availability of halal meat. In its most recent results, turnover for the year to 25 February 2018 increased by 11.7% to £722.4m, as it continues its expansion across the UK. At the time of the results, the company said: “Overall, we delivered a robust performance in line with our expectations as we grew revenue in very competitive markets and continued to invest for the future.”