Two generations after McDonald's, KFC and Pizza Hut helped revolutionise the UK high street, a new band of US fast-food behemoths are heading this way, hankering after similar success. What are we to make of it all? Tom Vaughan asks the questions
The dream: the kind of massive cultural impact their illustrious predecessors managed. The question is, will they manage it, or, as with the aborted attempts by burger chain Wendy's and Taco Bell to crack the UK scene in the 1990s, end up running back across the pond with their tails between their legs? Is the 21st century hospitality industry too established and expansive to spare space for any more ambitious American chains? Or have we, in fact, got a lot to learn from them?
Principal among this influx are burger chains Shake Shack and Five Guys (one site each in central London), Mexicans Chipotle (six in central London) and Taco Bell (two in Essex and one in Manchester, as it makes a second attempt to crack the UK) and casual dining concept Ruby Tuesday (Cardiff and Cheltenham). The most pressing question is, why now?
Danny Meyer, chief executive of Union Square Hospitality Group, which runs Shake Shack, says there is no particular reason why the company chose to launch in the UK at this precise moment, other than that it has been trying to do so for quite some time. "I don't have a magical answer except for saying that everyone on the Shake Shack team is in love with London and we made a deal that we would only open in places we loved," he says. "It took us five years to launch a second Shake Shack in New York and it has taken two years from figuring out we wanted to launch in London for us to work out how to do it."
No coincidence Sophie Carroll, associate analyst in foodservice at research group Planet Retail, thinks that there is no coincidence between Londoners' new appetite for burgers and burritos and the arrival of these US chains. "Five Guys and Shake Shack have entered the UK because they are aware the market is looking towards more premium options, especially burgers," she says. "They're both established in the US now and what's successful in the US tends to be popular in the UK."
The economics also make sense for some of the financially powerful chains to make the move across the pond, says Darren Tristano, executive vice president of food industry consulting and research firm Technomic. "Today, fast casual chains such as Five Guys, Chipotle and Shake Shack are well positioned to grow with a US model that includes strong unit-level economics to make the investment work and reduce risk," he explains.
The lower risk, says Tristano, comes from keeping costs down with a more focused menu (say, burgers and fries) and a smaller unit size, which in turn keeps rents lower. All of this means restaurants can break even at a few hundred thousand dollars less than their expected sales, should things not go to plan.
However, if these chains are being tempted over by our new-found love for typically American flavours, is there any guarantee that they won't be crowded out by an established domestic market? Jacob Sumner, UK managing director at Chipotle, says that a lot of these UK concepts are based on established US chains, which should work in Chipotle's favour. "I've met a lot of the founders of UK burrito restaurants and they told me that they are huge Chipotle fans. They ate at our restaurants when they came over to the States a decade ago and decided they wanted to do a Chipotle-style restaurant over in the UK," he says. "I'd never say that these places are a copy of Chipotle - London is a city of 12 million people so there is certainly going to be space for a few dozen burrito restaurants."
The US may well be the home of fast food, but that hasn't been a guarantee of UK success for US chains - Taco Bell launched three branches in London in the late 1980s and all had closed by the mid-1990s, while Wendy's never got further than a couple of now-defunct stores in the UK.
Audience evolution But both the customer and the brands have evolved considerably since then. "The reception of UK consumers is much more favourable and positive these days," explains Steve Gotham, project director at consultancy Allegra Strategies. "We've become more demanding of food quality, more accepting of new concepts and cuisines, and more disposed to spending and eating out."
Combine this with brands' ability to grow their market share through new techniques and it's a different landscape from two decades ago, says Tristano. "Today's younger consumers are looking for an emotional connection with brands. With the advent of the internet and social media, the opportunity to create buzz around hot brands is so much stronger and cost-effective. Corporate social responsibility is a big part of winning over the UK consumer. Generally, brands need to be approachable and not arrogant in their nature, concerned with where their food is sourced and above all incredibly friendly and flexible in satisfying the customer."
Certainly, that fits the profile of Shake Shack and Chipotle, both of which source their ingredients locally and cook from fresh in-house. What's more, the likes of Sumner and Meyer are not keen to follow an aggressive expansion plan as some of their big-name predecessors have, but prefer to grow more organically. "It would have been a mistake to come here with a set plan to have loads of Shake Shacks because implicit in that plan would be an absence of watching and listening and reacting," says Meyer. "We liken it to a sailing regatta: you accept that you have to get to a certain point but there is no straight line to get there and you have to change direction according to the wind and conditions."
One thing is essential, says Meyer: adaptation. Long gone are the days when a chain could just roll itself out with a one-size-fits-all mentality. Tristano agrees: "US brands are going to have to be careful to respect the UK consumer. This has a lot to do with the local flavour preferences and the types of ingredients, toppings, sauces and flavours that UK consumers are accustomed to eating. A brand that believes it can bring a US concept to the UK without any consumer research and market adaptation will lose credibility and respect from the customer."
The health question Gotham adds that US menus might also have to pay attention to a very un-American aspect of fast food - health. "They might not pay attention to the calorific nature of the foods. It could prove a barrier for some consumers," he explains.
While these brands will be adapting and learning from our market, it is a two-way street of information, and restaurateurs can learn a lot from the American behemoths, which have the art of fast food honed to a tee. "Every successful restaurant chain has at least one element that is unique or considered a best practice," Tristano says. "UK operators should approach US brands with an open mind towards what they can learn from them by â¨identifying the one or two elements that they do best - menu, service, decor, pricing or use of technology in service, for example."
More to the point, they are unlikely to go away: "I'm optimistic they will grow and establish a presence," says Gotham. "Whether it is 20 stores in two years as opposed to â¨200 stores in three years, I still believe they are going to form a firm base over here."
US contract caterers are also muscling their way on to the UK hospitality scene, principally in partnership with UK companies. In the past year, the likes of US-based Legends Hospitality has teamed up with events catering company Jamie Oliver's Fabulous Feasts to take over catering and hospitality operations at Manchester City Football Club, while earlier this year US catering giant Centerplate acquired UK caterer the Lindley Group.
What can US partners offer British hospitality businesses? Lindley Group chief executive Adam Elliott (pictured) explains: "It really is a two-way exchange of ideas. Centerplate has a strong balance sheet and this provides us with financial clout, enabling us to invest more capital into longer-term deals. We can also draw on Centerplate resources and expertise. For example, John Sergi, Centerplate's chief design officer, is assisting Lindley's sales and marketing team on key strategic contract renewals and concept developments."
Centerplate president and chief executive Des Hague also stresses the two-way nature of the exchange: "Take new technology," he says. "The US is more advanced in its use of Wi-Fi and contactless payment in sports stadia - in the US 82% pay for food by cash, in the UK that figure is 97%. A football fan in the US will spend an average of $15.50 at a match compared with a UK fan spending an average of £2. In the UK, however, we have a much greater focus on corporate social responsibility initiatives, so there is a great deal of fertile ground for development for both parties."
Five we sent abroad
Pret A Manger US stores: 52
As well as 13 stores in Hong Kong and five (soon to be seven) in Paris, the UK-founded sandwich king now has 52 stores across New York, Chicago, Boston and Washington DC.
Costa International stores: 1,700
The UK's contribution to coffee shops has grown emphatically since Costa was acquired by Whitbread in 1995. The chain now boasts 1,700 stores in 34 countries across Europe, the Middle East, India, China and Russia.
PizzaExpress International stores: 53
Another resounding international success story, PizzaExpress has established a firm foothold across the Middle East, China and South East Asia.
Jamie's Italian International stores: 8
In the five years since Jamie's Italian launched it has expanded at a relentless pace, and now has bases in Australia, Russia, Ireland, Singapore and Dubai.
Signor Sassi International stores: 4
An anomaly in that this UK restaurant group has more sites abroad than at home. Longstanding Knightsbridge Italian Signor Sassi currently operates two sites in Kuwait, one in Beirut and one in Thailand.
Who else is on the way?
Steers Country of origin: South Africa
Current UK units: 4
Already boasting 525 franchised branches across Africa, Steers opened its first UK store in Clapham, London, in July, and more stores are planned.
Amorino Country of origin: France
Current UK units: 4
With 95 units worldwide, the French gelato chain has slowly started to expand its UK operations, adding a fourth London store this year.
The Noodle House Country of origin: UAE
Current UK units: 0
Currently operating 20 units across the Middle East, the Noodle House has no UK sites at present but a press release last year stated it hopes to open 27 over here through a licensing agreement.
Theobroma Chocolate Lounge Country of origin: Australia
Current UK units: 0
No UK sites at present, but the 26-strong chain of franchised lounges states on its website that there are "opportunities available in the UK".
US new kids not yet on the UK block
Firehouse Subs A rapidly expanding franchise-model sandwich chain, Firehouse Subs increased its sales in the past year by $95.5m, making it the fastest-growing restaurant chain in the US.
•US system-wide sales growth: 33.6%
•US system-wide sales: $380m
•US unit count: 569 (up 19.3%)
Jimmy John's Gourmet sandwiches
Another fast-growing franchise-model sandwich chain, Jimmy John's added a massive 232 units last year and roughly 400 over the preceding two years.
•US system-wide sales* growth: 24.7%
•US system-wide sales: $1.3bn
•US unit count: 1,561 (up 17.5%)
Cheddar's This neighbourhood-style restaurant chain specialising in steak, chicken, seafood and burgers saw a strong 2012/13, and recorded the largest sales gain in the casual-dining market.
•US system-wide sales growth: 24.5%
•US system-wide sales: $545.8m
•US unit count: 129 (up 21.7%)
Buffalo Wild Wings Grill & Bar Chicken-wing specialist Buffalo Wild Wings Grill & Bar drove its estimated sales per unit up nearly 10%, the highest gain of all chains in the casual-dining category.
•US system-wide sales growth: 20.8%
•US system-wide sales: $2.5bn
•US unit count: 884 (up 8.7%)
Wingstop Another chicken specialist, this chain of nostalgic, aviation-themed restaurants focuses exclusively on chicken wings and boasted a 21% sales growth last year.
•US system-wide sales growth: 20.5%
•US system-wide sales: $450.9m
•US unit count: 533 (up 9%)
Source: Nation's Restaurant News, nrn.com
\* System-wide sales include both franchised and company operated restaurants