Undoubtedly 2018 has been a tough year for the casual dining sector. Chains from Gourmet Burger Kitchen and Byron to Prezzo and Jamie’s Italian all took substantial hits to their portfolios, with restaurants disappearing from UK high streets in alarming numbers.
Among them was Carluccio’s, which announced in May it would use a company voluntary agreement (CVA) to close 34 of its 103 restaurants across the UK, affecting 500 jobs, unless rents could be renegotiated. At the time, the restaurant group explained that the CVA was necessary to “protect its strong core business and the Carluccio’s brand”.
Six months on from that and a year since the death of its founder Antonio Carluccio, the Italian restaurant chain is hoping to move on with a £10m “programme of reinvention”. This will be supported by a marketing team that has doubled in size to six people since marketing director, James Backhouse, joined from Evans Cycles in February .
The decision about which stores to axe was based purely on profitability, Backhouse tells Marketing Week. He explains that the Carluccio’s business is “quite self-critical” and while it is not prepared to blame external factors for the CVA, they undoubtedly had a part to play.
As it sources many of its ingredients from Italy, Carluccio’s costs shot up “15% overnight” as the pound slumped following the 2016 Brexit vote.
There was oversupply in a market saturated with Italian casual dining restaurant chains. Add to that the perfect storm of business rates, inflated rents, depressed consumer confidence and changes to the minimum wage and it paints a gloomy picture.
However, Backhouse is keen to stress that Carluccio’s never saw the CVA as a quick fix.
“The thing with the CVA is it’s not a case of ‘all we need to do is get out of our tail of sites and then we’re home and dry’. We don’t believe that,” he explains.
“We think very significant change is needed in most or all areas of the business, that’s what we’re working on. The CVA was the beginning of that process not a one-time thing. We’ve taken the painful medicine, we’re still taking medicine and we’re going to keep taking medicine for the next couple of years.”
Backhouse acknowledges that Carluccio’s was not perfect 100% of the time, something he intends to change.
“Is a plate of spaghetti carbonara absolutely perfect every time you eat it in Carluccio’s? No. Do we want it to be? Yes. Are we doing everything to get there? Yes. We’ve got to look at ourselves. We can’t change business rates, we can’t change the exchange rate, we’ve just got to do what we can do,” he adds.
Rebooting the brand
Carluccio’s intends to use the £10m cash injection from parent company Landmark Group to overhaul its marketing and advertising and enhance the service standards within the restaurants, as well as upgrade the food proposition and restaurant design.
This is not a rebrand, says Backhouse, but a reboot. In fact, the refurbishment of Carluccio’s existing 85 UK restaurants will be the single biggest element of the investment. The whole refresh will be based on the ‘minimum fuss, maximum flavour’ motto coined by Antonio Carluccio’s wife Priscilla, who designed the chain’s pared back contemporary style when in launched in 1999.
At the time, Carluccio’s was seen as a breath of fresh air, with queues of customers waiting outside the doors. Backhouse admits that kind of momentum is hard to maintain, especially as new competitors emerge – not just within the Italian market, but with the likes of Côte Brasserie and Bill’s at the premium end of casual dining.
There are elements of our restaurant designs or our marketing materials where if you took the logo off you would struggle to identify which restaurant it was from.
James Backhouse, Carluccio’s
“These guys have all come out in the past 20 years, so the gap between Carluccio’s and the rest of the market in terms of brand identity and overall brand distinctiveness has narrowed. We’ve gone down a bit and they’ve come up a lot,” says Backhouse.
He explains that market research still shows Carluccio’s is perceived as more premium and stylish than most of its competitors, but the gap is not as big as the team would like. The ambition is to stay at the premium end and not to move “more mainstream”.
“There are elements of our restaurant designs or our marketing materials where if you took the logo off you would struggle to identify which restaurant it was from. That’s a problem for lots of people in lots of businesses and it’s hard to get away from. But that’s a problem, we need to be different,” he explains.
Carluccio’s is now refreshing the look of its point of sale, menus and brand. There will be four menu changes a year, instead of two, allowing the restaurant to focus more on seasonal ingredients. Rather than experimentation, the idea is to shine a spotlight on regional Italian cuisine previously untasted in the UK.
The restaurant chain is also revamping the way its Deliveroo orders are packaged, which Backhouse describes as a “very fast-growing part of the business”.
To this end, the marketing team is collaborating more closely with Irving & Co, the creative agency that has worked with Carluccio’s on its retail packaging for the past two decades. Backhouse has brought the agency closer on other aspects of the marketing, which has helped keep a “thread of consistency”.
“We’ve been here for 20 years and you can’t just come in, rip everything up and start again. You could, but it would be a really high risk,” he states, “whereas we have been really successful, so we can get back to that.”
Alongside the brand reboot, a large amount of the investment has been spent on revamping the website as a storytelling channel and ecommerce platform for Carluccio’s deli arm. The timing was important given 80% of Carluccio’s ecommerce sales come in the two months leading up to Christmas.
Over a 12-week period, Carluccio’s worked with ecommerce specialist BigCommerce to relaunch the website, using the site to share the “best kept secrets” behind the business. From telling stories about its suppliers to profiling the chefs behind the food, the idea is to show that Carluccio’s is not just a casual dining concept “invented by some businessperson in the past to make money”.
Backhouse argues that it’s hard to show that experience in an email or a Facebook post, which is why it’s better to have multiple layers of storytelling.
Backhouse is no stranger to multichannel retailing, having joined Carluccio’s in February after seven years at cycling retailer Evans Cycles, a role he took on after serving as commercial director at healthy food chain Leon.
He joins a leadership team that has been in place for less than a year, including former Bill’s chief operating officer Graham Ford, who became Carluccio’s commercial director in November. Chief executive Mark Jones joined Carluccio’s in January from Goals Soccer Centres, the same month as Yo! Sushi’s Andrew Campbell was appointed CFO.
The leadership team and growing marketing department are creating a new culture at Carluccio’s, says Backhouse. While he was not aware the CVA would take place when he took on the role, he was attracted by a love of the brand.
“That’s basically my first point when taking a job, to only work for brands that I really like and I would be a customer of. And I was attracted to the fact that I could see opportunity,” Backhouse explains.
“We all have opinions on other brands but it felt like a real opportunity to move things on. There was an appetite to not just to do what we’ve been doing before. That’s exciting to me. I would get really bored if it was ‘please just do what’s happened before and don’t break it’. That wasn’t the brief.”