The casual dining crunch has seen the demise of high street restaurants of late, including the recent closure of all Cau outlets. So what do hospitality brands need to do to survive? Mobas brand insight specialist Vicky Snell takes a look at the successful names that keep transforming.
While 2017 seemed to be the year that took away many of our best loved entertainers, 2018 has seen the demise of some major high street restaurant brands. Pressure has come from five sides: rising rents; rising imported food costs; rising employment costs; reduced consumer demand; and growth in local competition. So it was only a matter of time before the countless high street brands, seemingly sitting on every street corner, would suffer casualties.
Sure enough, restaurants have been closing, including those from chains such as Carluccios, Chimichanga, Prezzo, Jamies Italian, Strada and Byron. Most recently Gaucho Steakhouses called in the administrators and shut all 22 restaurants of its Cau subsidiary. And it is not just the value end of the high street that has been hit. Sir Terence Conran has shut the last three of the Prescott and Conran restaurants.
What determines whether previously successful brands are able to survive these frankly daunting economic times? For some, over-stretching finances to keep on top of rapid expansion has removed the wriggle room needed when growth heads south. For some, the frantic demand to find new sites has seen poorly performing locations exaggerate the drop in profits. For others, competition from independent restaurants offering everything from local, sustainable, vegan and gluten free options – all freshly cooked of course – has been too much, with customers expecting more.
Cau Restaurants had some poorly located restaurants but arguably had a bigger problem with customer’s brand perception (and lack of it!) which left them vulnerable against local competition.
So how can brands survive in such a hostile environment? The easiest way to answer that is to look at the companies that have managed to maintain or even grow their profits and brand reputation during these challenging times:
- Pizza Express (mostly) does one thing and does it well. Freshly cooked, consistent, pizzas that are always slightly better than you expected – every customer leaves happy
- Côte restaurants, created by the founders of Café Rouge, has taken the concept of French brasserie dining and ensured the quality of food over-delivers against their direct competitors
- The Ivy Brasserie has possibly delivered on the hardest challenge of extending an almost mythical restaurant name to a wider audience. It has also maintained the buzz of each restaurant with great local PR and food
On the face of it, it appears that each of these brands has simply maintained a consistent food delivery, but the reality is quite different. Like a swan serenely swimming down the river, each of these companies has actually been paddling frantically under the water. Their objective is constant transformation to ensure one thing – happy customers keep coming back.
This means that menus must be refreshed and marketed well to maintain the local customer connection. Customer expectations also need to be perfectly managed so they fall deeper in love with the brand with every experience. It is then down to the restaurant to cook the food perfectly and to ensure that every customer leaves with that wonderful buzz after a fantastic night out.