Keeping it real
24 December, 2011
by Peter Martin
Pressure to maintain cultural identity is acute as it targets 100 sites
There’s a conflict at the heart of Carluccio’s, and one that chief executive Simon Kossoff is all too aware of, writes Peter Martin.
In some ways, it’s a compliment to the enduring popularity of the Italian restaurant operation and the warmth and ownership that regular customers feel. It is also a curse that afflicts many successful brands bent on expansion.
“The conflict is actually in the minds of our guests,” says Kossoff. “It’s between how they see us, and want us to stay, and the growth path of the company.
“The fear is that as we expand, we will lose our identity. So, how can we grow and maintain the perception of a being that cut-above-the-average restaurant with all the authentic Italian heritage?”
For Carluccio’s the imperative to get bigger is a constant. Kossoff has been with Carluccio’s from the start, teaming up with Antonio and Priscilla Carluccio in 1997, before, two years later, launching the Carluccio’s chain. In that time, he has seen it expand from one to its current 57 UK and six overseas restaurants, bursting out of its London heartland to outposts in Glasgow, Dublin and the Gulf.
Last year, the Dubai-based Land- mark group bought the company in a £90m deal and now the foot is even harder on the accelerator. The rate of growth has risen from five or six restaurants a year up to a new target of at least 10 a year.
So the pressure to maintain Carluccio’s cultural identity is more acute – as it targets as many as 100 sites. Kossoff says it is all about brand integrity – and as he told the audience of industry peers at the Peach 2020 conference, that is number one priority.
Brands are an integral part of the eating-out scene these days. Consumers increasingly recognise them and use them, but there is also a public percep- tion that as they grow they will almost inevitably lose their essential values and personality – and that is even truer of more upmarket offerings.
Kossoff believes this is much more of a problem for restaurant brands than say a big fmcg name - probably, because it’s all down to the nature of the experience.
“Carluccio’s started as a hand-crafted family business, and we’re still trying to give that family feel,” he says. To that end, the business is not surprisingly engaging founder Antonio Carluccio much more again, even though he no longer has a stake in the group. His recent BBC TV series and book, Two Greedy Italians, with fellow chef Gennaro Contaldo, all help through association to underline the restaurant chain’s heritage and authenticity.
But it’s what restaurant teams do at a local level that is really important, says Kossoff. Since March last year, Carluccio’s has run 300 separate events for the public across the country, from 50 people at a Sardinian dinner to eight making Christmas gifts.
The 90-minute edible gift making classes, for example, have focussed on making traditional sweets, includ- ing truffles, Baci di Dama (biscuit ‘kisses’) and Mostarda di frutta (an Italian condiment made of candied, spiced fruit). Attendees pay £20 each and leave with a beautifully wrapped, home-made present.
Restaurants hold regular Cucina Italia cooking classes, as well as I Bambini fun children’s cooking lessons. Wine tastings, opera evenings and jazz evenings are also part of the mix.
“These are the sort of things that don’t directly drive the bottom-line, but are essential for building and maintaining our identity,” says Kossoff. And for that they are invaluable.
The problem many high street brands have is that customers will often say they prefer independent restaurants, even though they know they may not be as good. Carluccio’s has even done the research that shows how customers distinguish between branded and local restaurants.
While Carluccio’s is putting the “local” into its restaurants, Kossoff says: “We are still very proud of our brand – what it does and what it stands for.” He sees it as walking a tight-rope.
Carluccio’s people are crucial to getting this right, he says. “We have a culture of people that aren’t robotic.” That certainly goes for managers, who are expected to show initiative, especially in making contact with their local customer base. This is especially important when they are opening in new areas outside of London. “We’ve been very successful with our new site in Chichester, but recognize it works in a different way to our more metropoli- tan locations,” adds Kossoff.
The “people thing” is also high on Simon Kossoff’s priority list, although he visibly winced when I described it as “social responsibility” before the audience at the Peach 2020 conference. He wants to make it clear that what he and Carluccio’s do is not about corporate CSR box ticking. The causes he and the company get involved in have to be real and relevant to both customers and the Carluccio’s team.
Sustainability is part of that. Carluccio’s is the largest group to be a member of the Sustainable Restaurant Association, and he is convinced it will be a major issue with the public going forward.
People want to relate to brands differently these days, he says, and are concerned about how brands and businesses behave. He is also clear about the potential power that social media can have here too. “We haven’t started talking about sustainability yet,” he adds, “as we still have work to do on hitting the mark on sourcing.”
Charity work is something else that Carluccio’s has become synonymous with, but Kossoff has a cautionary tale for others: “Priscilla and I both wanted to do something different to help cultural team building. She wanted to do something around cancer and I wanted to do something for children.”
But, he adds, neither gained any resonance with the 20-somethings working on the floor. It was then that they landed on Action Against Hunger, a cause all could relate to. It quickly gained momentum and is now enshrined in the team culture. As a result Carluccio’s has raised £750,000 for the charity.
He says: “We also learned that if you get engagement, you raise money. Not the other way round.”
Carluccio’s is also keeping things fresh and relevant by developing the offer out in its restaurants. New sites are getting a different feel, with newly opened Glasgow and the Spitalfields store in London, among others, testing the new Aperitivo bar concept.
Carluccio’s aim is to extend all day trading, and although it is already pushing breakfast business in a number of its locations, the weakest area has been the evening. “People came to us for pasta and glass of wine before the cinema, but they weren’t really coming to us for a restaurant experience. So we’ve tried to shift the offer. In some sites the deli area during the day, with fresh food and cakes and other branded products, is being stripped back at 5pm to become a bar where you can sit and have a beer and snacks then sit down for a three-course meal.”
Kossoff knows that Carluccio’s faces even more change down the road as it pushes to that potential 100-site target, including more overseas. That will put more pressure on him and the management team, which he recognises will need to be strengthened, and on the brand itself to keep delivering the essential Carluccio’s experience.
Simon Kossoff is working on those issues, but he knows where the tensions are likely to be.
FOOTNOTE: Carluccio’s international?
New owner Landmark Group is a conglomerate with extensive retail and hospitality interests, and was already the Carluccio’s franchisee for the Middle East. At the time of the deal, Carluccio’s had one franchised restaurant in Dublin and three in Dubai. Since then, Landmark — which remains its franchisee in the Gulf — has opened two more in Qatar and Kuwait, with further openings in the pipeline in Abu Dhabi, Dubai and Kuwait.
The Far East in general and China in particular are high on the list, with India a possibility down the line.
Unlike private equity firms, Landmark is, Kossoff told The Times recently, normally a long-term holder of businesses and pointed out that he and his management colleagues have all committed to “at least” seeing through the five-year plan drawn up after the takeover. Kossoff and Carluccio’s have a busy future ahead.