Speculation this week that Pizza Express could go the way of restaurant chains such as Jamie’s Italian has shone a spotlight on the deepening malaise in the UK’s casual dining sector. But it also offers a cautionary tale on the perils for any brand not investing sufficient resources in evolving and re-evolving over the longer term.
Earlier this year, Pizza Express revealed a pre-tax loss for 2018 of £55.8m (40% bigger than the loss suffered the previous year) despite also reporting a rise in sales and turnover at the end of April. Then it reported underlying profits falling 7.7% to £32.4m in the six months to the end of June 2019.
But the critical figure to look at is its debt pile – reported to stand at £1.1bn by the end of last December. So now the firm looks set for debt restructuring, but sources close to the company insist it’s not in danger of collapse.
At first glance, you could be forgiven for thinking that Pizza Express hasn’t done badly when it comes to focusing on brand development in recent years.
In 2011, it introduced a new black and white logo (inspired by the black and white striped shirts worn by traditional pizza makers) while staff were retrained to provide a more personalised, less systematic experience. It also announced plans to redesign all new restaurants, taking into account their local area.
Next, in 2017 – three years after being acquired for £900m by Chinese group Hony Capital – it redesigned its restaurant interiors to better compete with younger, independent rival chains. Four new concepts were launched to suit different locations, areas and demographics – heritage, high street, urban and retail.
In March this year it revealed a significant brand refresh to better demonstrate its pioneering origins. Integral to this strategy was the development of ZA – a new, fast casual dining offering with an all-day menu and selling pizza slices which opened on London’s Fenchurch Street.
Yet despite all this, Pizza Express doesn’t feel like a brand that’s truly moved with the times.
The market for casual dining has grown rapidly in recent years. Choice for the consumer has expanded rapidly, fuelling ever-rising consumer expectations of dining experience, quality and range. There’s now huge demand for great experiences, and the Instagram generation is fuelling the growth of ‘eatertainment’.
To succeed, casual dining brands increasingly need to feel, look and act like they are a part of the current culture – like Nando’s, or relevant and authentic – like Franco Manca. Yet for all the recent tweaks, dining in a Pizza Express feels like it has felt for the past 20 years.
Yes, it’s kid-friendly. But what more does it mean? My sense is not a lot, and in today’s high street no-one can afford to be vanilla.
Furthermore, Pizza Express was early to use digital to push out price promotions – a tactic it also uses with discount offers distributed inside pizzas sold through supermarkets as part of its at home range. Which begs another question: How likely are diners to visit Pizza Express without a price promotion? And without one, is the in-restaurant dining experience still worth the full price?
Ask anyone what dining in a Pizza Express is actually like, and I doubt anyone will mention the upgraded interiors or logo design tweaks.
To understand what casual dining brands like Pizza Express could and should do more of, consider today’s consumers’ preference for newness, experience, authenticity and craft. Now think about the rise and rise of craft beers and hip brands like BrewDog. ‘Good’ no longer looks safe and familiar. Instead it’s grown to mean generic.
The lessons from all this are simple; changes in the cultural landscape can come at brands quickly. Relevance can be lost fast. Yes, Pizza Express may well have just last month (September) been named as the UK’s favourite casual restaurant brands in a YouGov poll, but was that because of its unrivalled experience or, thanks to its 470 restaurants UK-wide, ubiquity?
Looking ahead, one can only hope that once Pizza Express has successfully restructured its debt, it thinks beyond cosmetic tweaks to properly address the need to meet today’s consumers’ ever-rising dining experience expectations. And fast.
Rob Sellers is managing director at GreyBASE. He tweets on @RobSellers