Having taken the helm of TGI Fridays in December last year, the chief executive has had a turbulent introduction to casual dining. He speaks to Emma Lake about diversifying his restaurant portfolio and how his hotel background is an advantage in a post-Covid-19 world
You joined the business in December and then in March had to shutter the restaurants due to Covid-19. How have you found these first months?
I'm absolutely loving it, it's a phenomenal business and I love the Fridays brand – that's why I came.
One of the biggest challenges I had straight off was that Karen's [former CEO, Karen Forrester] team all left with her, so I had to find a new marketing director, a new chief operating officer, a new people director and a new financial director. We were a new team that had hardly worked together and we've been working virtually for the last 12 weeks.
How have you navigated the last few months?
We have great people in the business and a massive following of loyal guests. We've kept in touch with our guests on social media through our online Fridays Feeling Talent Show, through pub quizzes and all sorts of stuff. We launched click and collect in 36 restaurants, which was the right thing to do, and we opened well on 6 July. It's early days and we, like everybody else, are nervous about the future and hoping we can avoid a second spike.
Have you experienced any stumbling blocks in the first few weeks?
The biggest issue we have had is around encouraging people to book in advance so we can avoid queues. We've had quite a lot of walk-ins and the ‘track and trace' is a bit of a journey for them. That's just early teething problems though and 99.9% of people have been great. Even between the first Monday and Tuesday (6-7 July) we made our messaging on social media very strong around the need to book and take the hassle away from your journey to come to our restaurant. We saw a big difference even on day two.
Many casual dining groups have appointed advisers following the Covid-19 lockdown and looked to reduce the size of their estates. Is this something TGI Fridays has looked at?
We are not [appointing advisers] thankfully, we've got to be grateful that we're in a different place. We're owned by Electra, who have been hugely supportive to us, and we were in a good place coming into this. We won't be in the same place coming out of this as we were, but we're still in good shape. At this moment if we continue on the trajectory we're on and get our stores open without any further closures or disruption, we would like to think we would see this through. We have two very supportive banks and a very supportive owner in Electra, so thankfully we're in a very privileged position.
Why do you think this brand and business has had that resilience?
The ownership structure has been a saving grace. We are a very cash-generative business and both previous management and ourselves have been prudent around spend. Like everybody else we have to remember it's not over yet and we're certainly not out of the woods, but I think our path is quite clear for what we need to do to maintain our position and we'll be prudent around all our cost lines in line with what revenue will be.
We've fundamentally lost half our capacity because of one-metre distancing, but the average square footage of the restaurants is quite high, a lot higher than most in the sector, so while we will lose 50% capacity we still have enough footfall and tables to make it work. We just have to be a little bit smarter around diary management, shoulder hours, shoulder days and encouraging guests to book in – thankfully, that's a bit like my old world of hotels.
How do you think the Covid-19 pandemic will change the casual dining sector, which had already been in a period of contraction?
I'm new to casual dining and I can only comment on Fridays and say we will not be doing the type of deals that we maybe had been doing in the past, but we are looking at different opportunities.
I've picked up two Carluccio's sites in Lincoln and Cobham [Surrey] and they're smaller format, very much high street. I'm looking at more of that rather than building more of what I have – the guise of my restaurant portfolio will change over time and the deals I'll be looking to do will be quite different.
We're very skewed towards the big shopping centres and we're in as many of them as I think I want to be in at the moment. However, I see opportunities there because of what's going on in the marketplace, with administrators going into many businesses. We can look at cherry-picking the right places to get the right geographic spread in the right shape and size to allow us to do something slightly different.
I think there are opportunities for those who have the wherewithal to go and reshape their business for the new future – you could see people going into retail space that never would have been considered in the past.
There are opportunities for those who have the wherewithal to go and reshape their business for the new future
Do you think diversification in terms of product as well as portfolio will be key going forward?
The surge in delivery has been an interesting foray for us to go into during lockdown. As a business we were quite late to delivery and I see us galvanising our relationships with those aggregators going forward and seeing how the business can work harder in that channel.
Click and collect was an invention we plagiarised from our restaurants in the US. We originally only did that from the car parks we owned ourselves, but we are now doing walk-up click and collect and it's proving really popular.
I'm very keen to leverage the Fridays brand into areas of casual dining that we haven't been in before, because I don't want to be in the same position should this ever happen again. I want to be able to have that dark kitchen opportunity and to be able to do click and collect in all the stores, not just 36. I want to be able to use the e-commerce platforms at our disposal to bring Fridays to people's homes. We are for some time now going to be under social distancing restrictions that are curbing revenue and we have to look at new ways to bring Fridays to people that have never visited our restaurants before. Covid-19 has been a catalyst for all that thinking.
As well have reopening the restaurants you've launched a trial of new concept Famous at Fridays across six restaurants. What can you tell us about that?
This was a byproduct of a lot of research undertaken by myself and my marketing director while on our notice periods before coming to Fridays. We spoke to our existing consumers, past consumers, and target consumers. One of the things that came out was the need for a simplified menu and a menu that injected a bit of quality.
We wanted to go back to what made Fridays famous. We were famous for steaks, burgers and ribs and we really want to emphasise that and up the quality. We've looked at provenance and taken our steaks from a Scottish source, we're using Red Tractor chicken and we've reduced the fat content in a lot of dishes, including reducing the saturated fat content in our frying oil for chips from 28g to 9g.
The research also showed our cocktails were perceived as being a bit too colourful and a little bit too sweet, so we took all that on board and launched a new cocktail list in six restaurants. It's a really lovely cocktail menu – it's honest, it's playful, and it has something for everybody. Some of the classics are back with a retro twist, like a Pornstar Martini and Purple Rain, but long or short, we've got something for everyone.
Had it not been for Covid-19 we would have launched this in April, but we've launched it now and if it works we'll look to take it to 15 or 20 restaurants by the end of the year, which would be nearly 25%-30% of the estate.
You mentioned reducing the fat content of some dishes, do you foresee an increased appetite for healthier options in the months and possibly years to come?
I think health and wellbeing is absolutely top of the agenda. We know that people with underlying health conditions were particularly vulnerable to Covid-19 and a lot of that was linked to diet. I feel an obligation to really assess that and take it on board, but we need to do that without losing the brand DNA of Fridays and the taste profile of Fridays.
Do you see the changes as a means for TGI Fridays to expand its market appeal?
We are massive for families and previous management set store for being a family business – we're now just seeing how we add to that. There's the date night market, which we'd like to be seeing every night of the week, and the organiser-led parties.
We're not trying to take out any of the old. The family market is massive for us and we're already starting to see that come back, in small groups of course. But, there's a time of the day when families are in and there are parts of the day when the families go: there's an opportunity to bring in more of the partygoer and that's what we're focused on. We're a business that operates from lunchtime to late at night and we want to make sure we're maximising that time.
One thing I've learned through years in business is the value of data and we'll be making all our decisions based on what our guests are saying, be that existing guests, new guests we're trying to attract or those who have stopped using us who we want to come back.
We'll be making all our decisions based on what our guests are saying
You led Malmaison and Hotel Du Vin through a recession. Are there lessons from these experiences that can be applied now?
I think patience is a massive virtue in these times. While I'm a leader, we will also be looking at what everyone else is doing and there will be a bit of following. The financial crisis was the last thing I led a business through and that did not cause business to freeze for four months, so the outcome of Covid-19 will be quite different.
Planning is everything and government support has, I think, so far been pretty fantastic, but I just ask for more time from them to get things back to where we need to get it.
How long do you envisage it being before market conditions pick up to previous levels?
We have been able to open restaurants so we're moving forward again, but we're not predicting anything like full-year 2019 levels. If this trajectory were to continue and we had no road blocks or second spikes, our projection is that we will not really resume our full-year 2019 numbers until quarter four of 2021.
We're taking a long-term view on it, but it's really far too early to say and we need to make sure we have a continually improving trajectory in terms of the lowering of restrictions and consumer confidence. I was out in stores and around shopping malls on Monday and Tuesday [6-7 July] and there's no question that volumes are down. There are people being welcomed into shopping malls, seeing the rules and regulations and getting back in their cars because they were just not ready for it. This is all crystal ball gazing and we don't have all the answers, we just have to follow government guidelines, be patient and do what we do as best we can.
Do you feel optimistic?
There's a Winston Churchill quote we use in the business, it's sort of our mantra: ‘One thing is for sure, our yesterday will not be our tomorrow'. We want to get ourselves to the point where we are the casual dining lead in the UK, but we're not out of the woods and our tomorrow is not clear yet. There is still a big black cloud, particularly over the casual dining part of the industry. Getting people to come back into casual dining with the restrictions around social distancing and the loss of tables is tough, but we're still having fun.
Robert Cook joined TGI Fridays as chief executive on 2 December from Virgin Active, where he had held the position of UK chief executive since 2016. The appointment marked a return to the hospitality sector for Cook, who played a major role in the development of lifestyle hotels in the UK, initially as chief executive of Malmaison and Hotel du Vin for nine years, then as chief executive of De Vere Hotels Resorts and Village Urban Resorts, and as chief operating officer at Macdonald Hotels and Resorts.
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