Perhaps it is the prosaic corporate name. Maybe it’s the perception that it runs unexciting, Seventies-throwback brands. Or possibly it simply prefers a more understated approach than some of its rivals. Whatever the reason, The Restaurant Group seems to pass under the public’s radar.
Yet the bald statistics are compelling. TRG has 475 restaurants, a market value of approaching £1.5 billion, sales last year of £635 million (up 10 per cent) and underlying earnings of £117 million. It will open up to 50 new restaurants in the current financial year, creating another 1,300 jobs. And its target is to double in size over the next eight to ten years.
Danny Breithaupt, who was promoted to chief executive in September last year, admits that while “the average person in the street” will have heard of its brands, they may not have heard of TRG. Even Frankie & Benny’s, the company’s biggest, accounting for 248 of its restaurants, is “a bit of an unsung hero”, despite serving 75,000 people a day.
“At The Restaurant Group, we’ve never shouted about our success very loudly, but that’s a cultural thing — but now we have got something to shout about and the time is right to talk up what we do and what we want to do. So maybe in the future we will be heard of a little bit more.”
Its other long-established brands — Chiquito, a Mexican chain, and Garfunkels — also attract sneers in some quarters, yet both punch above their weight. Which begs the question of how the company manages the difficult trick of making a silk purse out of what some snootier commentators regard as a sow’s ear.
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One factor is that, unlike most of its rivals, TRG steers clear of the high street, where competition can be fierce, trading patchy and rents uneconomic. It focuses on sites benefiting from a captive or semi-captive audience, cinema-based leisure parks and airports, with railways station concessions also set to become a target. Even its growing chain of about 50 pub-restaurants eschews the high street.
With roughly half of its eateries on leisure parks, trading is dependent, to some extent, on the quality of the cinema film release schedule. However, while Mr Breithaupt is looking forward to a series of upcoming blockbusters, including new James Bond and Mad Max movies, he claims that the attractions of the location for diners go well beyond the cinema. “Free parking is a big factor for people; it’s easy, it’s well lit and there’s usually security. You can get in and out of the restaurant with the family really easily and you don’t have to worry about the car and where you’re going to park.”
According to Mr Breithaupt, a key plank of the group’s ability to outperform higher-profile rivals has been its staff and the culture developed under his predecessor Andrew Page. “If you don’t put the infrastructure in, if you don’t have the people with you, if you don’t have the personnel with you, then you’ll fail.”
Having navigated its way through the recession almost without a blip — “we managed to deliver year-on-year growth consistently” — and, crucially, without resorting to the damaging voucher discounts that rivals have struggled to wean themselves off, Mr Breithaupt reckons that TRG is set fair to benefit from the improvement in the trading backdrop.
“It isn’t fixed and I certainly don’t think that the economy is back to how it was in the good old days, but it is getting better. When you see petrol prices coming down and the supermarket price wars kick in and add in a little bit of wage inflation and more people in work, I think you do start to see a bit more disposable income coming through.”
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If there’s one person who knows what motivates a workforce, it should be Mr Breithaupt, because his career in restaurants has included almost every job imaginable. Embracing Norman Tebbit’s model for people to get on their bike and look for work, he walked into a Bella Pasta restaurant in Oxford 24 years ago and was given a job washing dishes. Two days later he was promoted to making pizzas and within a couple of years he was running a Bella Pasta in Birmingham.
“I have worked at every single level of management. The restaurant industry is a fascinating industry because it’s the one business where anyone can come in, at any level, and, if they’re prepared to work and they’ve got the ability, then they can go as far as they want.”
Some commentators have expressed concern that Mr Breithaupt, no doubt keen to stamp his mark on the business, is putting his foot on the expansion accelerator just as an influx of ambitious new rivals, such as Five Guys, the American burger chain, have started bidding up premiums and rent levels. If he’s worried about the impact of these new kids on the block, he isn’t showing it.
“Five Guys is a different offer,” he says. “When you look at a leisure scheme outside London, what you want is balance. You want some fast casual, you want a family dining-orientated theme, you want something that’s a little bit niche. Five Guys is an order-at-the counter offer and you’re in and out within 20 to 25 minutes. It’s not a restaurant experience.”
TRG itself has a newish concept with plenty of buzz about it. Unusually, Coast to Coast American Restaurant & Bar has been developed from scratch by the group, whereas most big public companies in the sector tend to acquire fledgeling brands from entrepreneurs that they can get behind and roll out on a wider scale. There are thirteen Coast to Coast outlets, with another seven in the pipeline this year and Mr Breithaupt, who had a big hand in its development, describes it as “probably the jewel in the crown” for the company, with scope for at least 100 over the medium term.
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Whereas Frankie & Benny’s is aimed at the family market, Coast to Coast is targeted at a more adult audience looking for a night out. Mr Breithaupt says that the performance of Coast to Coast also has given the company the confidence to push ahead with the development of further new brands. One possibility is Joe’s Kitchen & Coffee House, a casual dining concept with a Friends-style ambience. The original Joe’s is underneath TRG’s head office in Southwark, near London Bridge, and it runs a small number of similar outlets within its airport concessions business, but later in the year it will start a proper trial of two or three more Joe’s units to see whether it has real legs.
He admits to running an eye over recent acquisition possibilities, including Strada, but buying brands is not a priority. “We’ve got more brands that we can develop and build ourselves,” he argues. “Why go out and buy something where you don’t really know you’re going to get, when you’ve proved that you can develop something from scratch?”
Given that his predecessor cited the “relentless” nature of the job when announcing his retirement last year, the father of two daughters might have been expected to take steps to ensure he does not fall into the same trap. Some hope.
“My working day starts at half- seven in the morning and finishes at half-nine or half-ten at night. Then at the weekend I’m dragging the family around to look at either our restaurants or competitors. It’s an obsession. It is my life.”
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Q&A
Who is your mentor? I don’t have a single mentor. I have always taken my learnings from whoever I have worked with, good or bad
Does money motivate you? Absolutely not. What motivates me is developing young talent and watching them thrive and succeed
What was the most important event in your working life? Walking into Bella Pasta in Oxford 24 years ago and asking for a job
What does leadership mean to you? Leadership for me is picking people up by the bootstraps and taking them with you, ensuring that they feel very much part of the journey and that they are able to use their skills to help get there
How do you relax? Spinning classes at my local gym and driving, as it gives me good thinking time
What gadget must you have? Always the latest iPad
What is your favourite television programme? The Wire, Ray Donovan
CV
Age: 47
Education: Christian Brothers School, Springs, South Africa; Ormskirk Grammar School; WR Tuson College, Preston (now Preston’s College)
Career: 1991: Whitbread Restaurants, rising from kitchen staff, Oxford Bella Pasta, to restaurant manager through to operations manager, south; 2001-present: The Restaurant Group, initially as operations director, Caffè Uno; 2003: operations director, then deputy managing director then MD, Frankie & Benny’s; 2012: managing director, TRG leisure division; 2014 group chief executive