Jon Knight, chief executive of the Jamie Oliver Restaurant Group, tells Emma Lake how he plans to rethink and relaunch the restaurant chain with a fresh focus from its celebrity chef owner
Bruised, a bit bloodied but optimistic for the future, Jon Knight, chief executive of the Jamie Oliver Restaurant Group, has dusted himself off after six months that have seen the closure of 12 sites and the business entering a company voluntary agreement (CVA).
We meet in Jamie’s Italian in Oxford, where preparations are under way for a celebration of the brand’s 10th birthday. The George Street restaurant was Jamie’s Italian’s first site and opened to great fanfare in 2008, with customers queueing round the block.
A decade on, Knight has been the only operator to speak publicly about the decision to pursue a CVA, acknowledging that his group lost its way and failed to meet the expectations of the celebrity chef’s enthusiastic fans.
Knight describes the decision as the toughest he’s ever made, but insists there is still a reason for a party: “We haven’t spent much time in the past seven months celebrating and we thought it was important to say we have been here for 10 years. We’ve been through some tough times, but now it’s about standing up and saying we’re on a good path. We know what we’ve done and we know what we’ve got to do to make it better.
“The casual dining industry in the UK is an amazing one and we should be enormously proud of it. There are always people at the top of their game and others who are not quite where they want to be. All I want to do is getus back in a position where we can compete with our competitor set, and where we’re offering great choice and accessibility to customers. For us, it’s about fixing Jamie’s Italian.”
He says the task of “making it better” is even more daunting than the CVA. The agreement was a process to put the business on a sustainable financial footing, and he says that once the creditors had agreed the plan, with more than 98% approval, the real work began.
Knight, along with food and beverage director Ed Loftus, is in the middle of a country-wide tour speaking to Jamie’s Italian gold card holders (a loyalty scheme for diners) to discover what needs to be done. He describes the process as “an awakening”, with regular customers telling the pair that they did not know the group made fresh pasta at every site each morning, or that the food was carefully sourced to be sustainable, responsible and authentic. They were also told that the menu was not delivering inspiring Italian cuisine or bringing Oliver to life.
The latter was an issue Knight had already highlighted, telling the Casual Dining Show in February: “We lost touch with Jamie, there was a growing disconnect between what Jamie was doing on TV and in his books – people weren’t experiencing that in the restaurants.”
Four months on, Knight says: “Our unique selling point is Jamie and we’ve got his name above the door. Everyone knows him, every-one’s got an opinion on him, he’s so well-known, why wouldn’t you use him? So we are using him, and he is absolutely loving it. He loves cooking with the guys, he developed the menu with Ed and his handwriting is all over everything – it’s great, I couldn’t ask for more.”
Oliver’s input has included television appearances on the likes of ITV’s Good Morning Britain and This Morning as well as the BBC’s Saturday Kitchen. On top of this, the chef publishes social media posts explaining to his 20 million Twitter, Instagram and Facebook followers why they should visit his restaurants.
His posts, which include a weekly video in which he introduces and prepares a dish being offered at his restaurants, seem to be having an impact. When Oliver featured a new dish, Jamie’s steak tagliata, it became the best-selling item by two to one.
But with the challenging climate for restaurants in the UK, it would be remiss not to ask why the celebrity chef is committing so much of his time to a loss-making area of his business empire (Jamie’s Italian reported pre-tax losses of almost £10m in its last filed accounts for 2016), rather than focusing on his many other profit-making enterprises?
Knight explains: “Because of the chefs, because of the people, because he has an absolute affinity with all of the restaurants and he doesn’t want to see them fail. He absolutely hates how hospitality can be so inhospitable sometimes. He’s 100% committed. He could have walked away at any stage through this, but he hasn’t. He loves it – it’s in his blood.”
The ‘crisis on the high street’ has been covered extensively in the press, but Knight views the period as one of “correction” and hopes to see a far more resilient sector emerge from the other side. He explains: “If you look at the pub industry, not so long ago it was struggling. So absolutely, this sector can come around. I think we’ve been very busy blaming lots of factors that are out of our control, whereas what we’ve got to do is create a business that is robust and can stand on its own two feet while waiting for that period of certainty to come.”
Factors such as business rates, food price inflation, consumer confidence, falls in the value of the pound and, of course, Brexit have been cited repeatedly as businesses announce their intention to renegotiate terms with landlords and close sites that have been rendered loss-making, but Knight is adamant that the end of the high street is far from nigh.
He says: “I look at the number of people walking past our doors on any particular day and if you were able to convert them, there’s enough traffic to sustain a restaurant.” The business of converting that footfall has started with staff.
Both Knight and Loftus acknowledge that the CVA hit morale, particularly given the intense and enduring media interest, which included headlines detailing £71.5m of debt – described by Knight as “irresponsible”. He explains: “You can take a snapshot of any business and there is an amount that is owed to people. We pay all our suppliers within terms and we’re still trading. If we hadn’t pulled people through, I’m not sure what the incentive would be to trade with us. Even in the darkest days of the CVA, every single person was paid on time, in full – there was never a question about that. Our tax is paid up.”
To improve morale, the group has invested in training for all employees with a focus on enhancing the customer experience and ensuring staff understand its strategy. Loftus says: “The team need to feel like they’re being invested in and to feel that commitment has been a big thing. Great restaurants, great service, great sales – that’s what we want; that’s what we think should be our reason to exist.”
Lean and keen pricing
The food and beverage director’s key focus is working with Oliver to develop a new menu that communicates the stories behind dishes and suppliers, excites customers, hits accessible price points and meets the requirements of the celebrity chef’s healthy eating campaigns.
Hitting price points was key for Knight and Loftus, who are eager to move away from the sector’s reliance on discounting to drive footfall. The well-received steak tagliata dish was born out of a desire to have a competitive steak offer and it is priced at £15.50; £2 has been knocked off the price of the restaurants’ original beef burger; and margarita pizzas and several pasta dishes are available for less than £10.
Loftus explains: “It’s giving people an opportunity to enter into the menu at a good value price point and, once they’re in, to hear about the great stories. We don’t want people to feel intimidated by pricing, although our best-selling dishes are the more expensive offers, such as lobster ravioli and seafood linguine.”
Jamie’s campaigning also needs to be considered carefully. The celebrity chef has launched a bid to halve childhood obesity by 2030 and he has called for an end to the use of cartoon characters to promote unhealthy food. Accordingly, Jamie’s Italian’s children’s menu is 100% organic, every dish meets nutritional guidelines and contains at least two portions of fruit or vegetables.
But these credentials don’t stop a seemingly endless stream of headlines, including: “Jamie Oliver’s own Italian restaurants serve meals bursting with fat and sugar”, “Jamie Oliver outed for promoting sugary muffins” and “Hands off Tony the Tiger, Jamie. Nanny-state food policy isn’t gr-r-reat!”. How much of a problem is media criticism like this?
Loftus says: “He’s not banning things –that’s where the media tend to put a spin on it. It’s about education and offering the right choices. He’s not 100% healthy all the time – nobody can live their life like that – and I don’t think he pretends to.” Knight adds: “The one person who never seems to be affected is Jamie, because he genuinely believes what he’s doing is right. You see the strength he takes from his own personal convictions and what he’s trying to do for the public around informed choice. But, yeah I do get bloody annoyed, it does your head in.”
From the high street to the high seas
While Knight works to increase the number of people walking through the doors, the group is continuing to pursue opportunities away from the UK high street. Earlier this year the group announced an exclusive 10-year deal with contract caterer Aramark to move its concepts into workplaces, the first of which is set to be launched “imminently”.
Knight says: “A lot is predicated on how well we open that first one; I think that will go really well and give us the fuel to open more. There’s no reason not to achieve a double-digit number of sites by the end of 2019.”
The group also has partnerships with travel caterer SSP with plans for two new openings in UK airports as well as its first foray into out-of-Europe airport space. It also has a relationship with Royal Caribbean, which opened the sixth on-ship Jamie’s restaurant in June. Internationally, the business is also continuing to grow, thanks to Oliver’s global reach, with 20 openings planned this year.
Knight says these income streams give him “the breathing space” he needs to fix Jamie’s Italian, but he has no plans to stand still in the UK market: “I haven’t gone through this and taken the guys through all that pain to just stand still. We have a growth strategy. I don’t think you’ll see us opening new restaurants for maybe 18 to 24 months, but that’s appropriate and that’s about us re-establishing and learning again as we grow regarding our financial stability and customer base.
“The nice thing is that it’s not just the negatives, we’ve got some positivity back in the business and we’re enjoying it.”
Jon Knight on…
“I think the market has been too tactically led on discounts and promotional activity for too long. The only way you can find a better discount is to discount again and then you’re in a spiral.”
“I know how these external factors are affecting my business and my restaurant chain. As an industry, if we all work together, and we work collaboratively, then I’m sure we’d get a better response than doing it piecemeal. I don’t think we do enough of that.”
…the chef shortage
“As an industry we’re all suffering and there’s lots more competition, lots of openings and people paying silly money. Not that people aren’t worth paying well for, but to pay a third more than the going rate is untenable. We’re doing the best we can and putting money into training and investment in staff to improve retention.”
“The reason we did the CVA was to put ourselves on a better financial level of robustness, which we’ve done. If we were doing that as an industry and people were listening, then you might not see what we’re seeing on the high street.”