Is Jamie’s Italian in trouble?

So, what was the biggest story trending on the BBC website and many other media outlets last week?

It may surprise you, but it was the news that Jamie’s Italian – the fast growing restaurant chain owned by Jamie Oliver, is closing 6 UK branches. They currently have 42 in the UK, which is not a bad tally since they only opened the first site in 2008.

There are however a few reasons why this may not be the indicator of a slowdown that many have commented on.

As all restaurant owners will know, it is very difficult to know how well a restaurant will perform when you first open. There are just too many factors to predict.

How do you decide on a location for a venue?

The background of some of our team at Venue Marketing is in customer and prospect data analysis. One of our team was involved in the original analysis of where to put the ‘new’ Wembley Stadium. The original proposals were to knock down the ‘old’ Wembley Stadium and replace it, but the location of the replacement was not fully decided.

Some of the options were London, Birmingham or the North West. In terms of audience, many football fans are actually northern based. With large teams like Liverpool, Everton, Manchester United and Manchester City, Newcastle United, and countless others, there was an argument that it should be as convenient as possible for fans and located in the North West.

The Midlands location however, was a potential compromise, as it would be ideally located for fans from all over the country and esaily accessible by all means of transport.

However, the reality of the situation is that the Stadium needed to be paid for – and this means it needs to be located to suit every audience and particularly those who are likely to make the business a success commercially.

That doesn’t just include fans, but companies, international visitors, international businesses and so on. On that basis, it obviously made sense to look at all those factors. As a result, the powers that be obviously decided that it made more sense to demolish the existing stadium and rebuild on the same site – which was by all inidications the most expensive option by far, but evidently, the most likely to yield a return on the huge initial investment.

What about restaurant locations?

It is only natural for a business which is rapidly growing, to evaluate their portfolio of sites once they are established, to look at which may be the highest performing and also those which are not performing as well. In fact, it may be the turning point, where it becomes a mature business – ready for the next stage.

Let’s not forget that Wetherspoons, Restaurant Group and many other large hospitality operators regularly close their lowest performing sites, in order to invest in those that are performing better. It also enables them to acquire new sites in other areas to refine and improve their portfolio.

Let’s not forget that although the Restaurant Group closed 33 Frankie and Benny’s sites at the end of last year, it doesn’t seem to have affected their plan to grow from 500 to 1,000 sites over the next decade. Are your plans the same?

So – how is this relevant to smaller restaurant operators?

Well, if you only have one restaurant, you can’t simply close your underperforming site. Even if you have 10 sites, it may not be an option to write of the investment you have made in those sites, so you have no choice but to make them work as well as you possibly can. That means making sure that you are maximising every single element of the business.

In fact, if you only have one site and it is underperforming you probably need to take a similar approach to the large operators, but on a much smaller scale.

What can I do to make sure we are maximising our performance?

How often do you look at what is working in your restaurant and change the underperforming elements, while investing in the areas that are performing better?

• Are there dishes on the menu that rarely sell, or get negative feedback from customers?
• Are there areas of the venue that people don’t tend to use – but could be repurposed to make them more useful?
• Could we make relatively small investments in the look and feel of the venue, that could radically improve the ambience?
• Are the staff failing to make the most of their interactions with every customer, to bring them back to our venue again?
• Are we struggling to collect and manage information about our customers, that we can use to engage with them and bring them back?
• Do we find it difficult to find the time to engage online with our customers on a daily basis?

Funnily enough, we deal with dozens of restaurants on an ongoing basis, so we know that for most restaurants and venues, the answer to most, if not all of the above questions is YES.

We work with those restaurants to put those different elements in place and in many cases – we actually do the above for them using our team of experts! Our team can be contacted on 01772 978 101 if you want to chat about how we can do it for you.