Why there’s plenty to be positive about

It seems Novus and Duke Street, which earlier this year bought the Wagamama chain, have been in and out of talks for the past six months, with the private equity firm finally walking away over failure to agree on a price.

The fact that Novus’s owners let the offer pass and haven’t instituted a formal sale process suggests they have a fairly optimistic view of both the company’s and the market’s future prospects – and value.

The Duke Street approach is also significant in that it was for a business trading in the usually discredited alcohol-led late-night scene. Of course, Novus is no back-street pub operator. It runs some of the busiest bars and stylish venues in one of the world’s hottest cities – London.

Nevertheless, it is a big vote of confidence.

The truth is that people still want to go out to eat, drink and be entertained – despite what you might hear from the national media. Figures from the Coffer Peach Business Tracker have shown positive like-for-like growth throughout this year, with the pub and bar end of the sector actually doing better generally than casual dining.

Likewise, the latest Peach BrandTrack consumer research (see page 10) shows that both the numbers and frequency of people eating-out has remained fairly solid. There has been a weakening of the over 45s market, but the under 25s market which looked wobbly last autumn has stabilised and the core 25-35 market seems as strong as ever.

The trick, of course, is getting the right offer, to the right people, at the right time – giving them a real reason to go out.  Novus is among those operators that has invested in its sites, such as the flagship Piccadilly Institute in the heart of the West End or the more bohemian Foundation Bar in Covent Garden. It has introduced more private dining rooms, bookable booths and function areas across its 55 sites, coupled with investment in digital marketing.

It’s also broadened its appeal, being much more about entertainment, such as comedy. It is about selling drink – but not cheap drink.

It, of course, has the advantage of trading in London (it claims an 18% share of West End bar business and 21% of the City’s), as well as targeting that 25-35 age range. The average age of its customers is 29, and according to ceo Steve Richards, 30th birthday parties is a big money spinner. But he also says his out-of-London Tiger Tiger venues are also doing well.

Novus, which recently bought the Balls Brothers wine bar business, says it has seen like for likes in double digit growth over the last 12 months.  

Its experience should encourage everybody to keep faith, even when all around looks grim. But the real story is to keep evolving, looking for new opportunities and investing in the business.

Casual dining may be feeling a little squeezed by a resurgent pub restaurant market at present, so it’s good to see the likes of Cote pushing the quality and value boundaries, Giraffe expanding with a more grown-up proposition and established mainstream players like Pizza Hut and Café Rouge introducing new menus and approaches, as well as new looks in the coming weeks.

There’s always something to go for. Our latest BrandTrack research shows a potential opportunity for casual dining brands in the after 8pm segment, for example – something that Novus already knows all about.