This has been a dark and depressing week for much of the world – especially for many retail, hospitality and leisure businesses in England who have been forced to close their doors at a time of year that would usually be the start of peak Christmas trading. Against this backdrop, it was therefore a real pleasure to catch up with Andy Laurillard earlier this week, the CEO of Thai restaurant chain Giggling Squid, which is one of the few hospitality business thriving in the current climate – with turnover up over 20% year-on-year. In a far-reaching conversation, Andy talked me through the elements of their business model that have made Giggling Squid so robust to the pressures of Covid-19, and his predictions for the overall restaurant sector going forward.
Giggling Squid was founded in Brighton in 2002 by Andy’s wife Pranee. Not a fan of the Thai restaurants on offer in the town, Pranee was inspired to take matters into her own hands and create her own restaurant. From these humble beginnings, the business has grown organically to 36 restaurants across the UK, with a focus on high-quality Thai tapas and curries cooked by expert Thai chefs. Giggling Squid has come a long way since its menu was first drawn up by Andy and Pranee in their small Brighton cottage; in September, the company opened its biggest site to date, an 8,000 square foot flagship restaurant in Cambridge.
Andy tells me that national expansion at Giggling Squid happened at break-neck speed – but always retaining a high degree of caution: “We just didn’t have the money to make any mistakes on the wrong properties, nor did we add significant cost by creating a huge head office function.” As part of this, the company opted for an expansion strategy revolved around local high streets and market towns in the South of the UK – and this decision, in hindsight, has proved invaluable during Covid-19.
“We didn’t rush into central London,” Andy said, “but mainly because we were constrained by the resources we had available. We followed our noses, saw what was working, and moved on from there. We did look at sites in London, but the numbers didn’t work – it just felt like it would be too much of a risk. Every site needed to be profitable, so opting for the market town approach was more risk-averse approach.” As a result, the Giggling Squid restaurant estate today is concentrated in ‘commuter towns’ across the South of the England – where their customers have been based during lockdown, and are likely to be spending considerable more time going forward. Levering their restaurant estate close to the customer, by equal parts accident and design, Giggling Squid has been one of the restaurant sector’s few success stories during Covid-19. “My CFO put it nicely,” Andy told me, “he said ‘we’ve been dealt a good hand, but we’ve played it very well’.”
“My CFO put it nicely,” Andy told me, “he said ‘we’ve been dealt a good hand, but we’ve played it very well’.”
During lockdown, Giggling Squid speedily pivoted their restaurants to provide more delivery and takeaway, and revenue from these channels has increased fivefold (from just 11% of turnover pre-Covid-19). “Takeaway revenue was 500% up in some places,” Andy told me, “and some sites were selling more food as takeaway than they were as restaurants.” Despite being in a good position to pivot to takeaway – Andy noted that curries travel well and are equally as enjoyable by takeaway than in a restaurant – there were still significant operational challenges to overcome. “When you’re running a restaurant,” Andy explained, “people visit all week. But with deliveries, the peaks are very high – it’s really only an hour and a half on a Friday and Saturday night – so navigating that was tough.”
To make their estate Covid-19 safe for diners, Giggling Squid needed to reduce restaurant seating capacity to 61% (in some restaurants as low as 40%), and obviously, over the last few weeks, needed to close their restaurants at 10pm. Despite this reduction in capacity, they managed to keep dining numbers relatively constant over the course of a week, benefitting from changed working patterns, with people using their ‘saved’ commute time to go out for a meal: “People live where our restaurants are. When we reopened, we noticed that more and more people were coming to eat at lunchtime, or around 5pm.”
Strong leadership has also played a key role in enabling the business to pivot – and Andy tells me that trusting his senior team to do the right thing was a central element of Giggling Squid’s success. “A key move has been empowering the team,” he told me. “The most important decision a leader will ever make is who to have work for you, and we have a senior team drawn from some of the best hospitality businesses out there. Trusting them to make the right call was vital. Pushing decision-making down into the management teams means you can be nimble and agile – and often, they know the situation far better than yourself. Don’t second-guess yourself too much… it’s all about letting go.”
Throughout the crisis, Andy also focused on doing the right thing by customers, colleagues and suppliers alike. As a business they are very proud that they haven’t had to make a single redundancy throughout Covid-19 – and, in several cases, paid invoices in advance to key suppliers to ensure that they had the liquidity to stay afloat during the early stages of the crisis: “When our key suppliers were struggling, we had the ability to step in ensure their survival – and this has been invaluable as we have increased our volume in the rebuild phase.”
“The most important decision a leader will ever make is who to have work for you, and we have a senior team drawn from some of the best hospitality businesses out there. Pushing decision-making down into the management teams means you can be nimble and agile.”
Additionally, they have creatively leveraged the furlough scheme to rotate all workers on and off: “We didn’t want people sitting at home for months on end with nothing to do – so we rotated everyone around. It meant we kept very close to all our people throughout, and we didn’t have a mass exodus of chefs and other key team members going back to their home countries”. Their care and consideration of colleagues has translated into improved customer service over the period – with team members very motivated to get back to work and serve customers: “Morale in the business has never been as good as it is today… and this has translated into overwhelmingly positive customer service over the period – rewarded by four months of massive tips for employees, which of course helps!”
Our conversation then turned to the future of the restaurant sector. I wondered what changes he sees in the months and years to come?
“This is a time for smaller players to seize the momentum,” he predicted. “Right now, the businesses bidding for key sites in town centres are operators I’ve never heard of, who have the sort of local offering that people are looking for. Rental prices have never been lower: previously rents were always too high for budding restaurants to consider… but not anymore.”
Indeed, a recent change to planning laws looks set to change the face of our local high streets, lifting restrictions designed to stop the oversaturation of hospitality businesses in town centres. “As soon as the money comes pouring back into the sector, I think we’ll see more and more restaurant openings – many displacing existing retail stores,” Andy said. “But winning businesses will need to set themselves apart.
“Restaurants will need a highly differentiated proposition to stand out from the crowd, and one that balances high quality food with competitive prices. Considering we’re going into a recession, customers won’t want to pay £12 for something they can get from a shop for a fiver. There will definitely be a flight to quality.”
Of course, going into Covid-19, most businesses in hospitality didn’t have the strong hand of cards that Giggling Squid has benefitted from. However, we can all learn a lot from the speed and agility of some of their pivots – and indeed the original strategy that set them up for success going into this period. If you live near one of their restaurants, do enjoy one of their curries this weekend!