Chief executive Steve Holmes says he is set to capitalise on the good property deals he expects will result from the contraction in the casual dining market and is eyeing further expansion for all four brands under the Azzurri banner – ASK Italian, Zizzi, Coco di Mama and Radio Alice.
The growth plans follow Azzurri’s latest results for the year to 1 July, in which group sales increased 8.5% to £279.8m. Azzurri does not report like-for-like sales but Holmes says all four brands are in growth and that the group was performing ahead of the Coffer Peach Business Tracker.
Adjusted EBITDA remains in line with last year at £37m, while EBITDA margin fell slightly to 13.2% from 14.5% the prior year.
Expansion plans
Expansion has continued at the group with 15 successful new site openings, made up of eight Zizzis, three ASK Italians and four Coco di Mamas, with further investment in the existing estate with 33 refurbishments. The total estate at the end of the year stands at 290 restaurants.
Ireland is a key area for growth, with the third Zizzi in Dublin due to open at the start of next month. “Ireland is exciting,” says Holmes. “We’ve got our third site opening in the weeks at Liffey Valley, to west of Dublin. We’d like to do more there.
There is still plenty of opportunity to grow pasta-focused Coco di Mama brand in London before venturing into the regions, he adds. “For Coco di Mama, we see a lot more scope in London before we head out of the capital. There’s lots of opportunities in the City heartland.
“We don’t have anything in Canary Wharf for instance. I’d also love to do travel hubs with Coco as I think the proposition would suit it perfectly.”
Over the past year, Azzurri has evolved the Coco offer to be ‘Italian to go’, by offering a broader of high-quality Italian food-to-go dishes that complement its existing coffee and pasta offer. It is launching a breakfast carbonara, for example, in response to what it says is people wanting pasta earlier in the day.
“I’m fascinated to see how it’s received,” he says.
As well as physical expansion, Holmes says that delivery will continue to be a key growth driver. The group recently moved to an exclusive partnership with Deliveroo and is currently operating two Editions sites with Radio Alice.
Fresh look and taste
Azzurri says it has invested in its estate across both design and menu innovation in the past year to try and remain fresh in the overcrowded Italian sector. New initiatives this year have included incorporating digital moving elements into the bespoke artworks created for each new Zizzi.
The company also opened a 'next-generation' ASK Italian in Leeds, created by Turnerbates Design & Architecture. The restaurant features the brand's largest floral wall installation, which is overlaid with an illuminated map of Italy.
The company has also increased its vegan offering, which launched 18 months ago and which now accounts for 8% of all main courses sold. Other new dishes have included purple basil pesto Genovese, which involved the group planting its own field of purple basil in Italy, and Ruby chocolate cheesecake, which led to Azzurri acquiring all the Ruby chocolate in the UK for the next six months.
However, it says that balancing cost pressures and maintaining value credentials for the customer remains a key challenge. “We don’t want to pass on price unless we have to, so most of the price increases over the past 12 months we’ve tried to offset ourselves,” says Holmes.
On discounting he adds: “I don’t look at promotions as a bad thing. They are good for consumers and as long as they are used in a targeted way, they are good for business.
“We have spent some time personalising the offer, so we have put some money into a new CRM platform this year which gives us the ability to personalise our email communication to people.”
However, Holmes admits that Zizzi’s partnership with Sainsbury’s, with a trial of a takeaway counter at the Balham supermarket, was “a bit too early”, with demand proving to be lukewarm to date.
“We were trying to see whether there was an appetite for another occasion – that of grocery shoppers wanting restaurant quality food replicated at home. It’s growing but not spectacular.
“It will come but at the moment when people are in a supermarket they are very much in grocery mindset.”
This story is based on information that first appeared on BigHospitality’s sister website MCA. To subscribe to its breaking news feed, click here