19 October, 2012
Red Hot World Buffet is leading rapid growth in the all-you-can-eat buffet sector. Peach Report meets co-founder Helen Dhaliwal to uncover the secrets of its success
The scale of Red Hot World Buffet has to be seen to be believed. At the Manchester branch where Peach Report meets co-founder Helen Dhaliwal and her team, a good proportion of the vast expanse of 525 seats are filled on a rainy Wednesday lunchtime, while enormous food zones serve up a startling array of some 300 different items from countries around the world.
The business numbers are equally eye-opening. Now up to seven restaurants, of which Manchester is the biggest, the company employs some 725 people and projects turnover of around £5m per site this year. Some 11,000 people a week come through the doors in Manchester alone.
The stats have made other operators sit up and take notice, and they have not escaped the notice of private equity outfits. At the time of going to press, Red Hot was seeking to finalise a deal with one that will help push it on to an ambitious target of 25 UK sites by 2015. “We could do it ourselves, but it will be much faster [with private equity funding]—and it will be useful to us to have specialist knowledge and help on board,” says Dhaliwal.
A better buffet
Red Hot was launched in 2004 by Helen and husband Parmjit Dhaliwal, together with his late brother Kal. Having established and exited the Shimla Pinks and Jimmy Spices concepts in the Midlands, they spotted the potential for a broader offering and invested their own money and bank borrowings in a £400,000 Nottingham launch. An average of a restaurant a year has followed since, and Red Hot now claims that, in turnover terms, it has the leading restaurant in each of the cities it has launched into. It is a sign of how far it has come that that first restaurant has long outgrown its original site is now crossing Nottingham to a much larger spot at the Cornerhouse development.
The pan-cuisine formula was a way to help Red Hot stand out, says Dhaliwal. “We had plenty of experience in Asian food, but to give it an edge we thought we’d put in Italian and Mexican too. When we first talked about what we were going to do, some people said if they wanted Indian or Italian or Mexican food they’d go to an Indian or Italian or Mexican restaurant—but when they came in and saw the variety the penny quickly dropped.”
Red Hot has been one of the operators doing most to pull the image of the all-you-can-eat buffet upmarket ever since. Once the preserve of Chinese restaurants turning out soggy piles of cheap processed food to students fuelling up for the day, the quality of buffets has improved out of all recognition. All Red Hot’s food is freshly prepared on site each day from ingredients delivered locally rather than centrally, and presentation at its service points, divided by country, is carefully considered. “We really want to change the definition of a buffet,” says Dhaliwal.
Mastering the logistics
As it is with the public, operators’ views of buffets are changing fast, with more and more realizing their potential, among both standalone concepts and pubs. But Dhaliwal thinks there is still a misconception that they are an easy option in operational terms. “A lot of people think they can copy us, but they’ve learned some tough lessons about things like pitches and logistics. Buffet restaurants are much harder to run than a la carte places—the amount of preparation and organization that goes in to them is astronomical.”
Determining the right levels of food supply is one of the biggest challenges—though operations manager Ramesh Singh says no restaurant has run out yet. Pricing is another complex issue, set by Red Hot on an algorithm that takes in levels of footfall, staff, dishes served and local competition, and varying according to location, daypart and day of the week.
Buffet restaurants also have to balance the needs of a vast array of customers—in Red Hot’s case taking in families to shoppers to parties to corporates, says Dhaliwal. “There’s no such thing as a typical customer.” Demand shifts through the day—salads and sushi tend to be more popular by day, for instance, with Indian and Mexican to the fore in the evenings—and it is intriguing to watch Manchester customers’ different approaches to the buffet concept. Most still pile their plates high with a startling collation of items, and Dhaliwal says some first-timers are under the impression that they can only make one visit to the counters—recalling one customer who perched a slice of cheesecake on top of a mound of hot food for fear of missing out.
That sort of confusion about the concept has led Red Hot to invest in more floor staff, who at Manchester now number 100, against 40 chefs. It might seem a surprising ratio for what is essentially a self-service operation, but the company says customer experience in a concept like this is as important as the quality of food. Like many operators at the moment, Dhaliwal namechecks TGI Friday’s as the one to follow on service and atmosphere, and thinks businesses scrimp on staff at their peril. “People might perceive buffets as saving money on staff, but if you saw the array of people we have here you’d soon change your mind. It’s like a military operation.” Many staff, especially its professionally qualified chefs, come from India—Singh says a tightening of work permit regulations has not yet affected recruitment, unlike at some Asian restaurants—and Red Hot is big on staff motivation, running awards evenings and other incentives for high performers.
Here to stay
With more openings in the pipeline, Dhaliwal’s business is as hot as its name suggests right now. But as food trends come and go, might the popularity of this and other buffet operators be a flash in the pan? “Is this sustainable? Without a shadow of a doubt,” she says. “You only have to look around to see who’s copying us to realise that this sort of thing is here to stay.”
The offer of Red Hot and others certainly fits well into these value-conscious times. Customers on a budget like the confidence of knowing what they will spend on their meal before they venture out, and the ability to take whatever they wish automatically instills a strong sense of value for money—even if it might not delight anti-obesity campaigners. Like many food trends it probably owes much to the US market, where the all-you-can-eat formula has been entrenched for much longer.
But other factors are at work too. Easy and quick self-service makes buffets a convenient proposition for time-pressed customers, while the freedom of choice is very appealing to those who might feel intimidated by restaurant menus. And Dhaliwal stresses quality and freshness as key drivers too—factors that are reinforced by live cooking stations around the Red Hot restaurants to turn out made-to-order dishes. “We think what we offer is great value. People assume that because it is all-you-can-eat the quality of food will be inferior—but what they get is usually much better than they expect.”
Dhaliwal and her team have a hitlist of locations for more openings, determined, as might be expected for an operation on this scale, by size. Group general manager Saj Bajpai says Red Hot needs sites with a minimum floor space of 10,000 to 15,000 square feet to make an impression, in towns or cities with a population of at least half a million people. The company is expanding at its existing sites too, with a trial of takeaways and deliveries at its Milton Keynes restaurant and a new all-you-can-eat breakfast offer, pitched at office workers and hotel guests; Bajpai admits sales have been slow so far, but is happy to let it find its feet. The giant Manchester restaurant has meanwhile extended onto a second floor for overflow and corporate bookings.
Can the concept work in London too? Red Hot is looking at sites in the M25 corridor, though not centrally, where rents are “crippling,“ says Dhaliwal. “London is definitely on the plan—we’re just not sure when.” She adds that landlords are now approaching her about sites—an indication, along with the private equity interest, that Red Hot has made its mark. “A few years ago we were banging on their doors—now it’s the other way round. It’s a huge compliment.”
More from the buffet bar
Red Hot is certainly not the only player in the buffet sector—in fact, it is not even the only player in the family. Amrik Uppal, a Dhaliwal relative and another collaborator on Shimla Pinks, is now CEO of Jimmy’s World Grill, which has eight restaurants and three more scheduled soon. Sister brand Jimmy Spices meanwhile runs five sites in and around its Birmingham home, though the switch of name indicates the broader geographical spread of the company’s food now. It is not short on ambition either, having just spent £1m on a new central distribution hub and head office in the Midlands, and plans to double its estate over the next couple of years.
Another brand to watch is Cosmo, which mostly limits itself to Asian food but is no less bold in its plans. Its 13 sites so far include what it claimed late last year was the UK’s biggest restaurant at Croydon, with more than 800 covers over 22,000 square feet, 300 dishes and 10 live cooking stations. But its status as the UK’s largest only lasted a few months until the opening of Bristol’s trans-global and all-you-can-eat Za Za Bazaar with 1,000 covers. Size isn’t everything in buffet restaurants—but it certainly counts for a lot.
As the spread of unlimited salad bars to the likes of Pizza Hut and Harvester shows, the all-you-can-eat concept is increasingly appealing to eating-out’s biggest brands. But it is in the leading pub-restaurant groups that some of the most interesting buffet trends are emerging.
For Mitchells & Butlers, Toby Carvery and Crown Carveries have been among its most reliable formats through the economic downturn, with their bottomless vegetable counters a big selling point. As at Red Hot, both are now pushing into takeaways and all-you-can-eat breakfasts and, via the Toby Roast Sandwich Express brand launched earlier this year, lunchtimes too.
Over at Whitbread, Brewers Fayre has extended its theme nights into a more comprehensive Buffet Place concept across its nearly 200 sites, with each night of the week bringing a different cuisine, from Chinese on Monday to a carvery on Sunday. Its Taybarns brand, perhaps the most value-conscious of all buffet operators, has seven locations, though an expansion mooted a few years ago has not yet materialized.
Why are pub groups embracing buffets? Because they play well to their image as good value, hospitable places to eat. Peach BrandTrack research earlier this year found that Crown and Toby were among the eating-out brands most commonly associated with the words ‘generous’, ‘friendly’ and ‘honest’, and their marketing campaigns have reinforced the impression of being inclusive, welcoming places. With most buffets it is the generosity of serving that is the key appeal, and pub-restaurants are perfectly placed to deliver it.