If at first you don't succeed

01 September 2005
If at first you don't succeed

The late, great comedian Peter Cook invented a character who said that he had learnt from his mistakes - and could repeat them almost perfectly. Like him, many underperforming catering operators are reluctant to go back to the drawing board.

But not the British arm of South African chain Nando's, which, after a faltering start, now has 106 restaurants turning out more than six million grilled chickens a year, and has plans to increase this number by about 25 a year for the next three years.

The UK arm of Nando's is headed by South African businessman Robert Enthoven, whose family controls the investment firm Capricorn Ventures, which in turn has the majority holding in Portuguese-themed Nando's, with its trademark grilled chicken and spicy peri peri chilli sauces.

Back in 1992, when Enthoven first brought the brand to the UK, he positioned it as a take-away-focused operation, pitched slightly more upmarket than Kentucky Fried Chicken. But when its two pilot London sites, in Ealing and Earls Court, failed to catch the imagination of consumers, he reinvented it as a quick-service restaurant operation where customers order at the counter and collect their own crockery, cutlery and condiments but are served at the table. Since then, Nando's hasn't looked back.

The brand The Nando's brand is very informal and family-friendly, with most meals priced around £4 to £5, but it also thrives on a saucy, end-of-the-pier style of humour. Hence, the jobs link on the firm's website is labelled Karma Sutra (listing "current positions") while the staff, most of whom are under the age of 25, wear T-shirts with slogans such as "Saucy bird" and "Tasty chick" on them.

Not everyone approves of this and, in the past, Nando's advertising campaigns have ruffled feathers - one in South Africa was accused of inciting attacks on white farmers, and another in Australia was said to make light of the country's sensitive immigration issue.

But the company is unrepentant. As UK marketing director Louise Agran explains: "We take risks and we are a bit irreverent. We will do things that will upset a few people, but we please the majority. It's never done with malice. We don't like to take ourselves too seriously, and we like to have fun."

To coincide with this summer's Ashes Test cricket series, Nando's commissioned creative agency Hooper Galton to design a light-hearted marketing campaign, based around sponsoring a fictitious Portuguese cricket team, with TV ads shown on cricket broadcaster Channel 4, website content, and marketing in the restaurants, including postcards with peel-off fake moustaches.

The absence of competitors in the sector with links to the sport meant the brand could really stand out, and piggybacking an event such as the Ashes was a lot cheaper than mounting a stand-alone campaign - crucial, as Nando's has a tiny marketing budget. Most of its promotional activity is done locally using heavy branding and posters, handing out flyers, and standing A-boards outside its outlets.

Food Nando's core offering doesn't change much. What you see is what you get - grilled chicken marinated in hot, spicy, Portuguese-style peri peri sauce.

Most of that chicken comes from the UK and is supplied by Facenda, though some of the chicken breasts are sourced from the Netherlands. But Nando's does tinker with some elements, such as the bastes and dips. Recent additions include a spicy mayonnaise product called peri-onnaise and seasonal dishes such as a couscous salad.

Not everything works, though. A caiparinha cocktail sounded like a good idea but, in practice, took too long to prepare and was scrapped.

Over the years, Nando's has beefed up its drinks menu and vegetarian options, and from November its desserts will feature on a separate menu.

A key barrier with dessert sales is that customers need to queue up again to order them. To address this problem, in one-third of its outlets Nando's is trialling a table-order service.

Sites Sites vary enormously but each should be capable of turning over at least 20,000 a week. The company is set to open its largest to date on London's South Bank this month, with 180 covers, while another planned for the nearby Canary Wharf will have fewer than 70. Furnishings and layouts vary but the formula is the same, with lots of wood, terracotta and hand-painted tiles, with green and red being the predominant colours and the company's emblem, Portugal's Barcelos Cockerel, featuring heavily.

A key factor in locating new sites is that the chain can be equally at home in leisure centres and shopping centres such as the Trafford centre in Manchester and the Bullring in Birmingham as in high streets. While some outlets are family-focused, others, such as that in London's Soho, are certainly not. "We tend to appeal to everybody - well, under 50, anyway," Agran reckons. She explains: "The grey market don't like spicy."

Next year, the brand will move into Scotland and at some point will cross the English Channel. However, Agran says: "Europe is a much more difficult market for our product. I wouldn't say it was a focus but I wouldn't rule it out."

Customer relations Customer feedback comes in via a customer hotline, comments posted on the website, feedback cards on the tables, and focus groups. To reward regular customers there is a loyalty card system, and Agran reckons about 1,000 are redeemed each month. She also cites company research, conducted last year, which found that 75% of customers in London ate at Nando's more than once a month and 35% ate there once a week.

Regular customers also receive branded items, such as a calendar containing images from the company's art collection, selections from which adorn the walls of the branches.

Other revenue streams As well as a growing outside catering business supplying about 75 events each year, Nando's sells its range of spicy sauces and marinades in supermarkets, and has just launched a range of pasta sauces. Its partner company, the Grocery Company, handles the online shopping.

But Agran says that Nando's has no real plans to grow this part of the business. A more important area is to build the take-away element, which accounts for around 25% of sales. And with a new site opening every few weeks, there's more than enough to cock-a-doodle-do for now.


Human resources and staff rewards

Since signing up to the Investors in People programme, Nando's has developed an impressive record in training, development and internal promotion, with nearly half of its management having started out as cashiers or grillers.

While the focus is on staff having fun, hard work is rewarded. This year, Nando's took 150 of its central managers and restaurant managers to Brazil for a carnival.

The restaurant managers, or "patros" (Portuguese for "head of the family"), handle their own marketing budgets and are rewarded for good performance via a share incentive scheme, while the other staff, or "nandocas", get discounts at other firms, free food while working, and discounts at other times. And each restaurant has a budget to organise staff parties.

The management structure is very informal, with managing director Robert Enthoven being described on the website has Robbie Tea Boy, Argan goes by the alternative name of Louise Posh Spice. New management brought in from outside are required to do some shifts on the grills and to be approved by 80% of the kitchen staff.

All staff are encouraged to come up with ideas for marketing and operations, and are rewarded for good ones. Staff at the Harrow restaurant got free tickets to the V Festival in August, for example.

Rather than have astaid human resources policy document that would sit on a shelf gathering dust, the company commissioned South African creative agency Cross Colours to create a coffee table-style handbook for managers. It's Not Just About The Chicken uses illustrations and funny true stories, rather than relentless bullet points and subheadings, to flesh out the company's five core values of pride, passion, courage, integrity and family, and to provide guidance on areas such as finance and marketing.

Such initiatives helped Nando's make its debut on this year's Sunday Times list of the uK's best 100 employers at number 33.

And, in its own annual staff survey last year, 93% of employees said that they enjoyed working in the comapny compared with 91% in 2003.

As Argan puts it: "It's the guys in the restaurant who make it come alive. We want to motivate them and give them an experience they wouldn't have otherwise."

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