No Reservations

Taco Bell, Ruby Tuesday and Chipotle all entered the U.K. market in 2010. Aisling Balfe of Planet Retail visited the new outlets and spoke to the companies about their market strategies, synergies with U.S. outlets and plans for expansion.

Mexican fast food chain Taco Bell has been the most successful banner for parent company Yum! Brands in the U.S. in recent years and is currently pursuing an international expansion strategy. Taco Bell originally entered the U.K. in 1986, opening a unit in London’s Leicester Square and three subsequent locations across the U.K., but exited the market in the mid-1990s.

Nick Dawson, general manager for Taco Bell U.K. & Europe, says the decision to re-enter the market was driven by a belief that Taco Bell’s growing brand strength “would be easily transferable to U.K. consumers. Twenty years ago, the U.K. QSR market was very different. I think the U.K. is now more open to new concepts, consumers are both more sophisticated and more value-focused, and Mexican food has much greater visibility in the market.”

What were you looking for in an initial location?
Dawson: Our main requirements for the site were high traffic and good visibility. With Lakeside [Shopping Center in Essex] we have a big retail center that offers both of those things. It is also easily accessible from central London, which was not a primary concern, but it is definitely an added bonus in terms of reaching out to a wider market.

What has your marketing approach been?
Dawson: Taco Bell is a big brand, so we wanted to take part in big brand behavior. We advertised extensively throughout Lakeside: on the lifts, through promotional signage and even on the back of the doors in the bathrooms. Our U.K. website has launched and we have seen high consumer activity on our Facebook and Twitter sites. We believe these social media tools give us a great opportunity to communicate more about our brand to a broader audience.

How do your operations compare to those in the U.S.?
Dawson: We have the same ordering system as in the U.S., ordering at one end of the counter then picking up at the other when your number is called. Though this is not something U.K. consumers are used to, we believe it is a simple system, and something they are picking up easily. We are not yet offering the full U.S. menu, [but] the U.K. outlet offers a greater number of meal combos to make it easier for new consumers to gain an understanding of the brand and what it offers.

We have introduced digital menu boards in many of our new international markets. We believe they bring an element of modernity to the brand and we can use them to educate the consumer through advertising and promotions.

Do you have plans for any more outlets in the U.K.?
Dawson: We definitely plan to expand, and have opened a second outlet in Basildon, Essex. Eventually we would like to take Taco Bell across the U.K. In the U.S. most outlets are drive-through, which is something we eventually hope to bring to the market as brand awareness inevitably grows.

Casual dining chain Ruby Tuesday has expanded to nearly 20 countries worldwide and is continuing to pursue international growth.

Stephen Mayo, co-franchise director for Ruby Tuesday U.K., says Cardiff, Wales, was a logical choice for its first location in that “we are local to the area and already hold the franchise rights for Subway in Wales. The restaurant also has a great location within the food court area [of the St David’s Shopping Center], close to the [elevators] and escalators, so it is the first restaurant customers see when they enter the food court.”

What has your marketing approach been?
Mayo: We did a soft launch to see how things worked before we made a big noise about the restaurant opening. For this reason, we initially only opened the downstairs of the restaurant so we could perfect serving a small number of customers before branching out. Also, we did not want to presume we would be successful and were worried that we might not fill the restaurant. As it happens, we have been more successful than we could have hoped. All of this has been from word of mouth, which is even better for us.

How do your operations compare to those in the U.S.?
Mayo:We wanted to give the authentic American experience, providing the full menu of 99 items, though this is much larger than is normally offered in U.K. restaurants. Ruby Tuesday U.K. also offers free refills on soft drinks, fries and chips, and portion sizes have not been reduced, thus offering a larger amount of food than U.K. diners are used to. The reason behind this is a push on value for money, which we believe is a primary consumer concern post-recession.

We believed it was important to source all our products in the U.K. To obtain the correct products took six months, as every ingredient needed to be approved by Ruby Tuesday in the U.S. They sent an executive chef over and we presented him with a range of choices, so he could decide which best matched the Ruby Tuesday signature flavor.

Do you have plans for any more outlets in the U.K.?
Mayo: Initial plans are to roll out restaurants within Wales and southwest England, with the next location likely to be Bristol.

Fast-casual Mexican chain Chipotle is pursuing a rapid expansion strategy in the United States, and its outlet on London’s Charing Cross Road is Chipotle’s first venture outside of North America. Communications director Chris Arnold says London was chosen “because we view it as an international food city with a consumer base that is very accepting of a variety of different foods. Europe in general is more aligned with our food philosophy than the U.S.; there is a greater focus on organic meat that has been ethically raised and greater availability of sustainable ingredients.”

What has your marketing approach been?
Arnold: We did no marketing at all; we had no infrastructure, website development or advertising in place before the launch, which was the same for our first outlet in the U.S. We wanted the brand to build its own awareness. The primary aim was to identify and develop relationships with suppliers, the crew and the management team, to get a good operational structure in place to build a foundation for the future.

We have a great location with good visibility and high traffic ... so we have not found the lack of marketing to be an issue. In the opening weeks we were not particularly busy, but this was good for the in-store team to perfect operations and to help the restaurant develop. Our growth plan is not aggressive. At Chipotle we believe our food and philosophy speaks for itself — we like to do a few things but do them well.

How do your operations compare to those in the U.S.?
Arnold: The restaurant crew and operations are exactly the same as in the U.S. The two managers in the London outlet have been brought over from the U.S. to ensure operations are run in a similar fashion. Chipotle has a culture of developing people and promoting from within, so people in the current crew will eventually become managers of the London outlet.

In terms of menu, it is widely the same but with a few subtle differences. Chipotle’s menu range is very small anyway, so it did not make sense to alter the core items. In line with our ethical sourcing philosophy, all of our products are sourced locally in the U.K.

Do you have plans for any more outlets in the U.K.?
Arnold: We are looking at several other sites in London at the moment, but we do not have any current plans to expand elsewhere in the U.K. Chipotle’s expansion focus is broadly European — we are looking at a number of major cities across Europe as potential new sites. There will be a Chipotle outlet opening in Paris in 2011.

Though the U.K. is emerging from recession, spending is by no means back to pre-crisis levels. Consumers remain cautious, with value for money and brand familiarity being prominent concerns. It is interesting, therefore, that three major U.S. chains have chosen to enter the U.K. while it is still in a period of relative economic uncertainty. In order to build brand strength and operational excellence, the new entrants are choosing an initial regional focus before branching out to the whole of the U.K.

It is likely additional U.S. chains will venture across the Atlantic, but they should approach with caution. Although the foodservice market is increasingly diverse and consumers will eventually move away from a value focus, it does not mean the U.K. has a completely open-door policy for new restaurants. Chains will only be accepted on the condition that they provide innovation and quality in terms of format, menu and service.