Business Profile: Gaucho

By William Drew

- Last updated on GMT

Related tags: Gaucho, Argentina

L-R HR director Tracey Smith, chief executive Zeev Godik and operations director Martin Williams
L-R HR director Tracey Smith, chief executive Zeev Godik and operations director Martin Williams
By combining high-value product with high-octane style, Gaucho Group has hit on a lucrative formula. But how does it maintain its appeal and values across a growing chain?

Anyone who thinks it’s nigh on impossible to make decent money out of steak should take a gander at the Gaucho Group. “At our busiest, we can do more than 1,000 covers in one day in Swallow Street,” says operations director Martin Williams of the four-floor flagship restaurant in London’s Piccadilly. The Argentine-themed business also boasts an average spend per head of £60-£65. You do the sums.

Granted, that’s an exceptional day in an enormous 330-cover restaurant, but Gaucho’s 14 UK sites – 12 in London, one each in Manchester and Leeds – are rarely anything except busy. And while food costs will be higher than most, and margins therefore tight, overall turnover for 2010 is estimated to top £45m on the back of like-for-like sales up a juicy 8 per cent. Gaucho also has the added advantage of owning its own vineyards in Argentina, with wine director Phil Crozier blending house wines under the Selection G label for the group’s celebrated Argentine-only wine list.

But how can a chain operation command such a high customer spend, equivalent to that of many revered high-end independent restaurants? Precisely because it doesn’t think or behave like a chain, according to Williams. “We are very much against the flat-pack chain mentality. Instead we see ourselves as a boutique group of restaurants, each very different and each reflecting the personality of the ‘managing partners’, as our GMs are called,” he says.

Gaucho Broadgate, for example, is a slightly bling and showy restaurant geared towards celebratory cocktails and fun nights out, while Gaucho City – just down the road – is sophisticated and discreet, more suited to business deals or quiet lunches. “We encourage these differences as much as we can,” adds Williams.

The sites do share some key signature traits, however, not least in the luxuriously appointed interior styling, complete with high-impact cowhide leather on seats and walls, dark wood furnishings and chandeliers aplenty. The menu is also consistent across the group, comprising a vast range of Argentine steak cuts, ceviches and empanadas, baked cheesecake and freggo ice cream, along with a classic South American cocktail list.

Perhaps most importantly, they also share a significant if intangible asset – a vibrant company culture that places training and service right at the top of its agenda. And that emphasis inevitably stems from the very top, specifically in the form of founder and chief executive Zeev Godik.

Leader of the pack

Godik founded Gaucho mark 1 way back in 1976. The young Dutch national was travelling through western Europe before studying when he experienced Argentine steak at a restaurant in Germany. He teamed up with the chef to open Los Gauchos in Amsterdam, and successfully expanded throughout Holland during the ’80s.

In 1994, by now somewhat disillusioned with the franchise nature of the business he’d spawned, Godik moved to London to open Gaucho Grill in the basement of the Swallow Street site. Since then the group has grown steadily to its current 14-strong UK portfolio, rebranding from Gaucho Grill to Gaucho and taking over all four floors of Swallow Street along the way.

Last year it opened in Leeds – the group’s second non-London outlet after Manchester – and made its international debut in Beirut. It is looking at further sites in major UK and Irish cities, such as Edinburgh, Birmingham and Dublin, though growth will remain steady; it has opened only one or two restaurants per year for the past decade.

The group is also on the point of trialling a mid-market offshoot called CAU, run as an entirely separate operation. The first manifestation opens in Guildford this July, pitched as a more accessible steakhouse chain suitable for regional towns as opposed to larger cities.

“We don’t want there to be any cross-branding, but CAU is a casual-dining offer to compete with the likes of Côte and Jamie’s Italian. It’s younger, funkier, very cool… with an accessible international wine list and a very different style,” says Williams.

The Gaucho management focus, however, is firmly on international development, with Gaucho Dubai opening in September and further possibilities in the Middle East, Far East and even South America. But Godik and his team are determined they will not dilute the brand through franchises or joint ventures and that the all-important company values shine through.

“In both Beirut and Dubai we have taken key people from the UK who understand the Gaucho culture,” says the group’s ebullient HR director Tracey Smith. “We need to ensure the culture is strong enough to drive through standards. So everyone in the overseas teams will still go through the extensive academy training process that all our staff experience in the UK.”

Despite his personal charm, the media-shy Godik leaves the talking to Williams and Smith, but still leads from the front in inspiring all his staff. “Zeev challenges himself to know everyone’s name and details about them – and he challenges us to do the same,” says Williams. “He’s brilliant at creating a culture where people want to work for him, where they feel part of the vision.”

This almost evangelical approach is reflected in the depth of focus on training and development. And it’s vital to giving Gaucho a commercial edge, says Williams. “If staff have knowledge and passion for the product, that’s contagious and it generates sales. The receptionist should be able to talk as passionately about our beef as the waiter or chef.

“We want to host a dinner party for our guests, so from the moment they are with us we treasure them and guide them through an amazing overall experience,” he adds.

Competitive advantage

Despite the rise in popularity and recent expansion of newer players in the London steak sector, such as Hawksmoor and Goodman, Gaucho doesn’t appear to be feeling the pinch. “It’s good for all of us that steak is being talked about. People know a lot more about it: guests used to want steak and red wine, now they’ll ask for a spiral-cut rib eye and a Malbec from Mendoza,” he says.

Gaucho works with seven leading cattle ranches in Argentina, orchestrating the journey from farm to restaurant. All the meat arrives wet-aged and pre-butchered in the UK.

“The competition means we have to focus on improving, and that’s a good thing. The décor of the restaurants and the service is where we have a USP, so we’re pushing that even further.”

The restaurants also trade on their unique celebration of a country some 7,000 miles away. The strict Argentine food-and-beverage focus is matched by the cocktail list, the 1930s Buenos Aires-style interiors and the staff knowledge. All the head chefs and managing partners spend some time in Argentina with consultant chef Fernando Trocca visiting cattle ranches, vineyards and restaurants.

“Buenos Aires is a great party place, while Mendoza is friendly, family-oriented and incredibly hospitable,” says Williams. “We aim to provide a unique blend of those elements at Gaucho.” Judging by the sound of tills ringing, Godik, Williams, Smith and their amigos are making a fair fist of it.

Related topics: Business, Restaurants, Business Profile

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