Little Chef owner fears brand may disappear with sale

27-May-2013 - Last updated on 01-Aug-2024 at 11:19 GMT

Little Chef could disappear altogether, RCapital has said after it emerged that bidders for the business would probably re-brand the sites

Little Chef owner RCapital has warned that the Little Chef brand could disappear from our roadsides forever after it emerged that fast food and coffee shop operators are bidding for the business.

The private equity firm, which bought Little Chef out of administration in 2007, put the business on the market last month after completing what it called a 'long-term critical rebuild strategy'.

So far bids for the 83-strong estate are thought to have come from the likes of Costa, Starbucks, KFC and McDonald's who would re-brand sites, leading to fears the slimmed-down Little Chef brand could disappear altogether.

In a statement, RCapital said that although it had returned the restaurant chain to profit, diners had 'voted with their feet' and were increasingly choosing to eat at rival fast food chains.

It said it had hoped a new buyer would be able to take the business and the brand 'to the next stage' but that the market was changing with fast food and coffee shops becoming ever more popular.

“It is not a surprise that the majority of the offers for Little Chef are from companies that may want to re-brand the estate," it said.

“RCapital has a deep affection for the Little Chef brand and it is hoped that some Little Chefs will remain on Britain’s A roads even if some sites are re-branded.”

'Iconic' brand

Little Chef opened its first 11-seat site in Reading in 1958, growing to 234 restaurants by 2007.

RCapital bought 196 of the sites out of administration in 2007 and, under chairman Ian Pegler, bought in Heston Blumenthal the following year to help create a new concept restaurant.

The restaurant in Popham, Hampshire was a success, entering the 2010 edition of the Good Food Guide and the concept continued to be rolled out to sites in York and Kettering with another 10 restaurants to include menus inspired by those created by Blumenthal.

New chairman Graham Sims, ex-retail director at BP, replaced Pegler in 2011, with further plans to refresh the brand; upgrading signage, adding electric vehicle charging points, pushing the 'Good to Go' takeaway concept and entering a partnership with Lavazza to better appeal to a changing customer base.

However, in January 2012, it closed 67 sites and moved its head office to Norfolk, leading to the loss of 600 jobs. Just over a year later the 83-strong estate was put on the market.

BigHospitality was invited by BBC Five Live and BBC West Midlands yesterday to talk about Little Chef.

Listen to the Five Live programme here.

Listen to the BBC West Midlands programme here