Top 100: Andy McCue, The Restaurant Group
Overall ranking: 17 (new entry)
Restaurateur ranking: 4 (new entry)
Snapshot
Bringing in a new boss from outside the industry is always a gamble, so it's perhaps appropriate that the board of the Restaurant Group (TRG) found Andy McCue at betting business Paddy Power, where he was chief executive, and put him in the same role at TRG in September 2016. TRG has assembled some of the UK's best-known casual dining brands across more than 500 outlets, including Frankie & Benny's, Chiquito, Coast to Coast, and Garfunkel's, along with around 60 travel concessions, mainly in airports. TRG has recently been underperforming in a very competitive market, reporting like-for-like sales down 3% year on year in the 52 weeks ended 31 December 2017, with turnover down 4.4%.
What we think
McCue is no stranger to driving organisational change. His growth strategy at Paddy Power delivered record revenues and profits, and played a pivotal role in the merger with Betfair. So when he says that TRG is a work in progress, we should take him at his word. "2017 is a transitional year," he told the City at the interim results in August last year. "As we make the necessary investments in price to correct for our previously weak value position, and in quality to ensure consistency of our food offer, like-for-like sales and margins will come under inevitable pressure in the short term."
His priorities for TRG include re-establishing competitiveness in leisure-located brands Frankie & Bennie's and Chiquito in particular, where pricing is seen to have risen faster than comparable brands; improving customer service; and making efficiencies across the business. The £10m in cost savings achieved during 2017 will be reinvested in restaurants. TRG is also planning to grow its pub business beyond its current 60 sites (including the Brunning & Price gastropubs) and its travel concessions arm, both of which have proven more resilient than the core casual dining brands.
Key appointments have been made to create what McCue calls a "high-capability" head office team. Michael Healy joined in November 2017 as chief marketing officer (like McCue, a recruit from Paddy Power) and Greene King chief financial officer Kirk Davis joined in February 2018.
Investment in technology has improved the frequency and accuracy of bookings by integrating online, phone and in-restaurant reservations. Ordering and payment is quicker through use of hand-held terminals, and mobile order-and-pay and click-and-collect apps are being tested at some sites.
TRG remains a profitable and, as McCue points out, "a highly cash-generative business, which benefits from significant scale and a diversified portfolio".
The challenges currently facing the casual dining sector will create winners and losers, but with McCue's clear focus on where the challenges lie, and a strategy under way to address them, it's hard to see any of his former Paddy Power colleagues betting against him. In a trading update in January 2018, he declared: "While the market has softened, we continue to benefit from strong cash generation and a healthy balance sheet."
Further information
The Restaurant Group chief executive ousted >>
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