Bouncing back: How flagging brands can return to the top

Peter Martin discusses the peaks and dips of Carluccio's and Pizza Hut over the years with respective CEOs Mark Jones and Jens Hofma at last month's Casual Dining show.
Mark Jones, CEO at Carluccio’s

By their own admission, Pizza Hut and Carluccio’s had fallen behind the curve in casual dining—but both are now on the way back up. And at the recent Casual Dining show, their respective CEOs told CGA vice president Peter Martin how they have turned things around.

Carluccio’s had what CEO Mark Jones (pictured left) called an “annus horibilis” in 2018, going through a CVA and closing 35 restaurants. The brand is now on the front foot, he said—but it won’t be over-reaching itself again. “One of the reasons we got into trouble was because we were opening too many restaurants in too many marginal locations. When you’re focused on opening a new restaurant a month it’s a huge distraction from the core business—and we’ve not been alone in that.”

While Carluccio’s was trading fine through the day, it had lost its way on evening occasions, Jones suggested. It has responded with a ‘Fresca’ transformation plan, revisiting every aspect of its offer and repositioning itself in premium casual dining. Feedback on the first new concept restaurant in Richmond has been excellent, and more revamps are following. “It’s signalling a way for us to go forward…. We’ve thrown off the shackles,” Jones said.

Other changes have included tough negotiations with landlords and more investment in staff training and engagement. The revamp began with that CVA—but Carluccio’s didn’t undertake that lightly, Jones stressed. “CVAs aren’t management tools to restructure—they’re damaging to your brand… We were two weeks from going under, and we can look back and say we did the right thing for our employees, shareholders and brand.”

In another head to head interview with Peter Martin at Casual Dining, CEO Jens Hofma (pictured top) told the story of Pizza Hut’s revival. It has edged away from a family-oriented, value operator to a more grown-up and experiential brand. “If families are the target group you’re relying on, things don’t tend to go very well… we need to make sure we’re relevant to other groups,” he said. “We’d painted ourselves into the corner of being a functional, value brand, which didn’t offer a very compelling guest experience. Considering where the casual dining sector has gone in the last ten years, we really had to up our game.”

Pizza Hut’s investment in vibrant new restaurant design and customer engagement has paid off with an increase in average spend. But where brands can really succeed is by focusing on the fundamentals, Hofma said. “The most important differentiator—and it’s pretty boring—is consistent execution, day after day after day… that’s so often where brands go wrong.”

There is more change to come, he hinted. “We’ll be doing a lot of experimenting—we’ll be bold and thinking about how we can stretch this concept.” Delivery will be one of the things Pizza Hut grapples with in the year ahead, but Hofma said restaurants could still thrive. “It [delivery] will continue to grow… but I think people will still want to go out and socialize. It would be a huge impoverishment if going out for meals with friends and family fell away, and I don’t think that will happen.”

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