Burger chain Five Guys eyes accelerated expansion after seeing opportunity in pandemic
“We’re just really early days still,” explains Five Guys’ UK CEO John Eckbert.
The US-founded burger chain expects to ramp up its UK expansion plans after the pandemic has opened up real estate opportunities – but dark kitchens would only ever be “temporary.”
Alongside Carphone Warehouse founder Sir Charles Dunstone, Eckbert was responsible for launching the chain in the UK. The Murell family had opened the first burger restaurant in Virginia in 1986 and the first London site, in Covent Garden, opened on 4 July 2013.
Now, the casual dining chain has 130 stores with the firm eyeing “another 85 markets that we can see are good,” [within the next five years,] Five Guys’ UK CEO John Eckbert told CityA.M.
Food and beverage brands have lost units during the pandemic, due to closure or impossible rents, which Eckbert said “represented opportunity.”
“We have doubled the new store openings,” he explained. “Our budget will call for 25 new stores and we should be in good shape to hit that next year.”
“Our strategy is to accelerate into the challenge of the pandemic. We see opportunity in the availability of stores and as the challenge of the pandemic to our industry is felt, because of our optimistic view of the future, we’ve been trying to take advantage of what we think is an increasingly favourable property market,” he added.
“There are surprisingly some significant gaps in our coverage of London, for example, Victoria and Paddington are two examples of areas we don’t have a store in.”
The brand is reticent to introduce a dark kitchen element, claiming venues offer the “best opportunities” for growth.
Dark kitchens
However, Eckbert said the firm would look at so-called ghost kitchens “on a temporary basis,” in areas without a store.
“They work if you want an asset light growth strategy but we’re fortunate people like to come into our restaurants.
“Ultimately we love a customer facing presence,” he added, as venues could offer delivery services for at-home diners too.
The chain pointed to “curbside collection” as one way the company had battled the tough trading period, with delivery platforms seeing an uptick in sales since the start of the pandemic.
Accounts filed to Companies House for 2020 revealed profit after tax was £1.8m for 2020, compared to a £0.7m loss in 2019.
However, the demand for delivery services had faded upon the opening of stores, with delivery sales making up around 30 per cent of total sales now.
“We’ve seen a real reversion of preference for in-store dining but delivery is here to stay and will continue to grow,” Eckbert said.
“We have all been accustomed to using delivery apps as part of our lifestyle. There’s a permanent element to the delivery element of our food repertoire.”