When Carluccio’s closed 30 restaurants last year, it faced an identity crisis. July saw the group follow casual dining brands including Jamie’s Italian and Prezzo in shutting sites through Company Voluntary Arrangements (CVA), with few outsider observers surprised that the growth of increasingly interchangeable Italian chains had come to a head. But Carluccio’s CEO Mark Jones, who joined the business in 2018, says it marked a turning point. “That was an existential moment for the brand,” he says. “We would not have survived otherwise.”
Jones has been clear about what he thinks went wrong at Carluccio’s. The company spent too much money opening marginal sites, and not enough on refurbishments, staff training, and trying to keep the brand fresh. Now the group, which celebrates its 20th anniversary this year, is undergoing a major rethink. As a condition of its CVA, Carluccio’s owner Landmark, the Dubai-based retail and hospitality group, has begun a £10m Fresca scheme to overhaul its 70 remaining UK restaurants. “This isn’t just about a refurb, this is a fundamental repositioning of the brand,” says Jones. “But we’re trying to fix our business while casual dining is in the doldrums.”
The sudden and rapid collapse of Jamie’s Italian last month, just over a year after it narrowly avoided administration, has dispelled the myth that a CVA can permanently save a sinking ship. Jones is clear that there are holes in the safety net. “A CVA is not a management tool to be used lightly or to deal with more fundamental issues. It doesn’t fix your brand or your sales. It actually damages customer sentiment.”
It’s easy to draw comparisons between Jamie’s Italian and Carluccio’s. Both closed around a third of their UK restaurants under CVAs last year. Both are linked to the legacy of their eponymous chef founders. Both expanded in the restaurant boom years of the 2000s-2010s and struggled to maintain a niche in an increasingly crowded market.
Learnings from the fall of Jamie
So can Carluccio’s succeed where Jamie’s failed? Over the past year Oliver’s restaurant group struggled to update its offer, which – despite a PR emphasis on its “high quality produce” - had become increasingly distanced from what the chef stood for. It also stuck to its Italian focus in a crowded market. It is notable that only Oliver’s three Gatwick Airport sites, which include the more generic Jamie’s Diner and Jamie’s Coffee Lounge, are still standing following a sale to SSP.
Carluccio’s Fresca pilot began earlier this year using the Richmond restaurant as a test-bed, which has been informed using diner feedback through Yumpingo – a smartphone tool placed on tables that allows users to rate everything from food to ambience.
The rethink has seen the brand move away from its ‘rigidly Italian’ menu to include more steak, fish and French wines. “We resisted avocado for 20 years but finally gave in and that was the right thing,” says Jones. “Poached eggs and avocado is now our second highest selling breakfast item.”
Not everything has been so well received. Diners’ comments on the ‘sloppy’ appearance of a lasagne dish led to a rethink of its presentation. “It’s exactly the same product presented in a different way, but it’s fundamentally improved the ratings it’s getting,” says Jones.
Investment has also gone in to improving the overall service and environment. The formerly plain walls in Richmond have been replaced with colour and framed pictures, with plants adorning sideboards and hanging from the ceiling. Jones is critical of the "canteen-style" set-up of the Carluccio’s of old, and the tableware, seating and crockery has had a plusher update. The aim was to shift the brand towards the feel of a full-service restaurant, and he says it’s paying off.
“We started with a business that was declining on the prior year, now it’s growing strongly. Sales and TripAdvisor ratings have dramatically improved. We were weaker on Friday and Saturday nights, which have now become an important part of weekly sales.”
The Fresca redesign is now being rolled out to at least five further restaurants, starting with Carluccio’s sites at Heathrow Terminal 5 and Bluewater shopping centre. The group’s London Waterloo restaurant will follow later this summer, before the Fresca menu is introduced to all its sites – including the three in Marriott hotels - in late September.
“We have a number of restaurant formats so we’re keen to get evidence of Fresca working in every location,” says Jones. “This isn’t a case of just turning up with a refurb."
There have also been changes at the top, most recently with the appointment of Matt Dale - formerly of Bill’s - as head of food operations. Other recent hires include Graham Ford (also ex-Bill’s) as commercial director, Hilary Ansell (Gordon Ramsay Group) as marketing director, Marco Barletta (Franco Manca) as operations manager, Lee Goodridge (Busaba Eathai) as operations director, and Dominika Rusnak (Ivy Collection) as Fresca openings manager.
So will this rethink be enough to ensure Carluccio’s avoids the same fate as Jamie’s? Jones is sympathetic to the high-profile collapse of the restaurant group but admits it has added to the already gloomy sentiment around casual dining.
“We don’t crow about Jamie’s and have contacted them directly to see what we can do to help people find employment. All these things help inform where we’re heading. The surprise to all of us was that every single one of [Oliver’s] restaurants except for the airports shut. Where other businesses have gone in to administration there’s been a chance to rescue them in some way. I’m sure the details of that will come out over time, but those sudden high-profile events damage sentiment across the whole sector.”
Jones acknowledges too that there are learnings to be taken from the industry-wide spate of CVAs last year. As such, Carluccio’s has no immediate plans to begin opening new restaurants before its brand overhaul is complete. But what does the future hold, after the difficult past year?
“It’s obvious that the days of rapid expansion are over,” says Jones. “Mature brands with 50-70 sites can’t open one restaurant a week or month anymore, with the honourable exception of some of the millennial-focused groups like Wagamama or Nando’s.
“We had to deal with a growing tail of sites that were losing money, and we have. But we’re not in any way complacent. We know what a tough market it is. The salutary lesson here is that your brand has to evolve. I’ve been honest in saying I don’t think the Carluccio’s brand had moved rapidly enough with the market. [The past year] has been a very cautionary tale and unfortunately, we’ve learned a very harsh lesson.”