Big ideas for Little Chef

11 November 2005
Big ideas for Little Chef

New Little Chef owners Simon Heath and Lawrence Wosskow are men in a hurry.

Next Thursday (17 November), just a month after buying the 235-strong chain for £52m from venture capitalists Permira, they plan to unveil a 1m signage and PR campaign based on a new menu and advertising slogan: "Something is changing."

Other plans include opening or reopening 10 sites by Christmas and, from next year, the roll-out of a new "grab-and-go" format.

It is certainly an ambitious agenda for the two former owners of the Out of Town restaurant group but, says Heath, they have little choice but to be bold.

"We recognise that there are problems with this business and they need to be sorted out," he stresses.

Certainly, the chain has been dogged in recent years by a reputation for tired, poor-quality and overpriced food, all served up in rather grim surroundings.

Jonathan Doughty, group managing director of consultancy Coverpoint, agrees. "They are going to have to take Little Chef from being a distress purchase to being a desirable purchase," he says.

Little Chef began life as an 11-seat snack bar in Reading, Berkshire, in 1958, quickly expanding to become an ubiquitous sight on Britain's trunk-road network.

The chain, which employs some 4,000 workers, was bought by Permira from Compass, along with budget hotel chain Travelodge, in January 2003 for £712m.

Under the latest transaction, Heath and Wosskow's People's Restaurant Group will take control of the restaurants, including 113 sites co-located with Travelodge. Permira retains control of the hotel chain.

So what's going to change under the new regime? First, says Heath, it's the menu. While the big fried breakfast will still be important, there will be more lighter snacks - baked potatoes, paninis and so on - on offer at different times of the day.

The next big change will be new stand-alone grab-and-go units, the first of which should be in place by January, with a target of four openings a week to reach 40 by Easter.

These will offer coffees, sandwiches and savouries and will be entirely separate from the sit-down restaurant, Heath says.

Then there is the service culture to address. Heath will have met every manager by the end of this week (11 November) to explain what the new regime will expect.

"We need to make sure people recognise how simple good customer service can be. We need to make sure that we move fast and smile," he explains.

Already a food development team has been created to work alongside and train kitchen staff who, up to now, have been little more than "functional operators", according to Heath. "This will be the first time this has happened in years," he says.

The Travelodge restaurants will also be overhauled, with a more varied evening menu, and more of them will have licences. On top of all this, the duo aim to expand the chain, growing it to some 300 sites within the next three years.

Consultant Doughty, for one, is convinced the moves, assuming they succeed, make sense. Bringing in a grab-and-go concept, in particular, he says, is vital.

"They need to have at least two formats - one, the traditional sit-down breakfast; and the other perhaps more like a Starbucks, Costa Coffee or BP Wild Bean Caf," he suggests. "They also need to bring in decent toilets."

The mention of brands such as Costa brings us, of course, to a wider trend within roadside dining: the brand tie-up.

In recent years we have seen Compass's SSP Moto brand partner with Marks & Spencer, RoadChef team up with Whitbread's Costa Coffee, and Welcome Break ally itself with KFC. Both Welcome Break and RoadChef have subsequently rebranded to Welcome Break KFC and RoadChef Costa Coffee respectively in order to circumvent rules limiting roadside advertising.

Observers, though, are less convinced that this is the direction Little Chef should follow. One of the chain's biggest selling points, argues former managing director Gerry Carroll, is its dominance on Britain's A-roads.

"There is absolutely an opportunity to have a good roadside dining offer on our A-roads," stresses Carroll. "Little Chef under a number of previous owners lost its way, but it now has an owner who cares about it."

The ferocious response to Permira's attempt to slim down the somewhat portly Little Chef logo last year is also key in understanding the potential of Little Chef's appeal.

The uproar, according to Doughty, demonstrates just how well-recognised and well-loved the Little Chef brand remains, something that bodes well for the chain - if only things inside can be improved.

"It is a very memorable brand," he says. "It is analogous in a way to Marks & Spencer, in that we like it and want to buy from it, but it has not really been offering us what we want." Only time will tell if it can.

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