Speaker 1: After three years of food price hikes, US and European
Speaker 1: consumers are voting with their wallets now. Pressure on the
Speaker 1: sector has led to supermarkets and fast food chains offering
Speaker 1: more promotions and deals, including McDonald's in the US launching
Speaker 1: a five dollars value meal now here in the UK.
Speaker 1: Five Guys, which has more than nineteen hundred locations worldwide,
Speaker 1: has continued its expansion despite uncertainty around the economy. It's
Speaker 1: discuss the outlook for the industry with John eg Bertie's
Speaker 1: chief executive of five Guys in the UK and Europe. John,
Speaker 1: thank you so much for joining us. A lot more
Speaker 1: fun talking about burgers and milkshakes and anything else that's
Speaker 1: going on in the world right now. It's going well
Speaker 1: because you're expanding.
Speaker 2: Yeah, So five Guys we have two hundred and seventy
Speaker 2: stores in Europe now one hundred and seventy in the UK.
Speaker 2: We'll be opening about fifty stores a year, so at
Speaker 2: a million to a million and a half investment per store,
Speaker 2: that's a significant vote of confidence in the future here
Speaker 2: in Europe.
Speaker 1: So what's your biggest concern right now? What's top of
Speaker 1: mind of things you wor is planning is it staffing,
Speaker 1: is it food price inflation?
Speaker 2: Well, of course the UK consumer and the European consumer
Speaker 2: has been under a lot of pressure of late. And
Speaker 2: how do you provide a value proposition to the cut
Speaker 2: to the consumer in this market?
Speaker 1: And the good thing.
Speaker 2: For five Guys is that we have the highest value
Speaker 2: for money fries for example, in the business the generosity
Speaker 2: ounce for ounce is the best in terms of quantity
Speaker 2: in terms of value for money for the fries is
Speaker 2: the competes with all the QSRs for example. So yeah,
Speaker 2: providing customers with great value for money. Five Guys has
Speaker 2: a lot of free stuff as well. We have free
Speaker 2: pe nuts, free refills, free fifteen, free topping. So the
Speaker 2: headline price may be higher than the qs R, but
Speaker 2: when you add it all up, the value proposition is
Speaker 2: pretty compelling at five cups.
Speaker 1: Is it worrying for your margins? I mean, given you
Speaker 1: you also pride yourself of saying you provide very high
Speaker 1: quality ingredients that I imagine have gone up quite a
Speaker 1: lot in terms of expense in the last three four years,
Speaker 1: but you haven't passed on that to consumers.
Speaker 2: Yeah, So for other brands, the playbook whenever you have
Speaker 2: an environment like this would be to shrink the product
Speaker 2: and to compromise on the quality of the ingredients, and
Speaker 2: of course five Guys would never do that, So we
Speaker 2: have to focus on providing fantastic customer service along with
Speaker 2: the great product. In five Guys is a treat. So
Speaker 2: you're not going to go to five Guys every day
Speaker 2: or you know, multiple times a week necessarily, So when
Speaker 2: you go to five Guys, you want to have the
Speaker 2: best burger. You can have fantastic customer service, great milkshakes,
Speaker 2: and perfect fries. So we've got to focus on making
Speaker 2: sure that you get that.
Speaker 1: And it's true you go around the country and actually
Speaker 1: go and like quality tests every day you're having multiple
Speaker 1: burgers or multiple bites of burgers just to make sure
Speaker 1: that they all taste the same.
Speaker 2: So we're very operations driven and I'm fully certified to
Speaker 2: make burgers and fries. I can cook your burger next
Speaker 2: time you come in. And being able to know our
Speaker 2: standards and cook to standards. We don't have timers, we
Speaker 2: don't have any cooke to we have to actually know
Speaker 2: the standards that we're cooking to. So we're all certified
Speaker 2: in the kitchen and that's really the focus of the
Speaker 2: business is on burgers and fries and taking care of
Speaker 2: hungry customers.
Speaker 1: Is it? You know, is staffing an issue? Are you
Speaker 1: Are you finding enough people that want to work? Yeah?
Speaker 1: Of course.
Speaker 2: You know, having great crew is so important in the
Speaker 2: food business. It's all about passion because you want to
Speaker 2: know that people who are cooking your food actually care
Speaker 2: about the product that you're getting. So making sure that
Speaker 2: we have people who are not only certified to make
Speaker 2: the product, but actually care about the food that you're
Speaker 2: going to be eating is essential.
Speaker 1: But competition must be high. I mean there's like a
Speaker 1: you know, talent war even for like wagers and people
Speaker 1: that are at that high standards. Do you have to
Speaker 1: pay more? How do you retain them? Yeah?
Speaker 2: So, first of all, we pay more than the minimums,
Speaker 2: so we pay more to start with, and every time
Speaker 2: you learn something new at the business, we increase your
Speaker 2: pay as well. We also have invested millions into learning
Speaker 2: and development, so we can take you from a crew
Speaker 2: member to being a senior leader in the business with
Speaker 2: you know, hundreds of employees working for you. So that
Speaker 2: learning and development journey is something we've really take pride in.
Speaker 2: So seventy five percent of our store managers are come
Speaker 2: from our crew base now, so that's part of the
Speaker 2: journey we've been under.
Speaker 1: It is a UK market different to other European markets,
Speaker 1: so do people buy and consume burgers and fries differently
Speaker 1: on the continent.
Speaker 2: Every country is a little different. We and we're surprised
Speaker 2: by every country that we open in. We just opened
Speaker 2: up in Port of Banous in the south of Spain,
Speaker 2: did one hundred and seventy thousand pounds in the first
Speaker 2: last week in trade, which was three or four times
Speaker 2: what we thought we would. We just opened up in Wimbley,
Speaker 2: which we thought, you know, all of the kind of
Speaker 2: high volume sites in the UK would probably have been done.
Speaker 2: But when Taylor Swift played we did one hundred and
Speaker 2: eighty thousand in a week worth of business there. But
Speaker 2: when Harry Styles takes Olivia Dean for a burger two
Speaker 2: of five guys, that really helps and drives people in
Speaker 2: to go.
Speaker 1: That's something to try. Are there any new countries that
Speaker 1: you want to be in Ashup?
Speaker 2: We're going to open Portugal next year, so we're looking
Speaker 2: at Lisbon looking for a prime pitch site. We always
Speaker 2: want to open up in a kind of flagship location,
Speaker 2: so we're looking for the perfect site in Portugal.
Speaker 1: We have a number of very talented food critics here
Speaker 1: and I remember two years ago it was all about
Speaker 1: the burgers. I mean, there were a number of burger
Speaker 1: chains that were opening in the UK because it was
Speaker 1: a hot new thing coming from the US. Is the
Speaker 1: space still very crowded or is it less crowded in
Speaker 1: Europe compared to the UK.
Speaker 2: Well, a number of the US better burger brands have
Speaker 2: come to the UK and opened and then closed shop
Speaker 2: and gone back home. We've been very fortunate that we
Speaker 2: have been able to open up in the pretty much
Speaker 2: every pitch in the UK, and that's really given us
Speaker 2: a great defensive position. And now across Europe as well,
Speaker 2: we have thirty five plus stores in Germany, France and
Speaker 2: Spain as well, taking those prime flagship locations. For the
Speaker 2: better burger segment.
Speaker 1: Do you use AI or tech to streamline and to
Speaker 1: get you know, better customer orders or better service?
Speaker 2: We haven't figured that out yet. We are looking at
Speaker 2: Kiosks for the first time because we wanted to be
Speaker 2: as famous for customer service as we are for great
Speaker 2: burgers and fries, and we weren't sure to do kiosks
Speaker 2: really fit into with that strategy. But there are a
Speaker 2: lot of young customers particularly who really want a digital experience.
Speaker 2: Our best till operator is no competition for them for
Speaker 2: a great Kiosk. So we're providing that digital journey now
Speaker 2: and investing in that strategy.
Speaker 1: But Kioso is it less It's less expensive for you,
Speaker 1: I imagine, But I feel like everyone is doing it.
Speaker 2: You know it may be, but we're not doing it
Speaker 2: for that reason. We're doing it to delight the customer,
Speaker 2: and there are there is a customer subset that wants
Speaker 2: a digital journey.
Speaker 1: I mean, indulge me. Who's like your perfect customer? Apart
Speaker 1: from the celebrities, I can can bring other people.
Speaker 2: Do you eighteen to thirty five year old looking for
Speaker 2: either something fun to do in an evening out, some
Speaker 2: place to take your family when you're shopping, going to
Speaker 2: a movie?
Speaker 1: All those are great.
Speaker 2: Occasions to think about five guys and go for a
Speaker 2: and fry.
Speaker 1: Do you feel like you need to have a healthier
Speaker 1: proposition because of everything that's going on in the in
Speaker 1: the I guess nutrition world, right, even the nest slaves
Speaker 1: and union leavers are trying to cut calories to give
Speaker 1: customers a healthier journey.
Speaker 2: We're working hard to come up with some better alternatives
Speaker 2: to the burger and fries, but we want to make
Speaker 2: sure that it's the same caliber quality so that when
Speaker 2: you come in, you go that's best in class. So
Speaker 2: we're not going to offer anything until we're confident that
Speaker 2: we have that level of product. But we do and
Speaker 2: we will extend the product line in the business.
Speaker 1: Do you have a say on the new products that
Speaker 1: go online? Well, the Morell.
Speaker 2: Family, the Morrell family, there actually are five guys and
Speaker 2: they actually have to approve anything that we would we
Speaker 2: would serve, but we're working hard to convince them.
Speaker 1: Any closures.
Speaker 2: We have closed one site in Lahavre in France, which
Speaker 2: was I guess a casualty of Brexit, But other than that,
Speaker 2: we're opening stores rather than closing them.
Speaker 1: And has it changed the way There's been a little
Speaker 1: bit of a pattern that's taken a lot of people
Speaker 1: by surprise. You know, post COVID, it's people went out
Speaker 1: a lot more. I know, people stop going out, I mean,
Speaker 1: is it going really fast? I feel like the cycle
Speaker 1: of how we entertain and go out changes rapidly.
Speaker 2: No, it has and you know we are social creatures
Speaker 2: in the end, and people going out and being able
Speaker 2: to be together again, it has been a powerful trend
Speaker 2: and it's been great to have people back in the
Speaker 2: stores for us because seeing your food cooked in the
Speaker 2: open kitchen and being there with your friends and family
Speaker 2: makes a huge difference for JN.
Speaker 1: Thank you so much for joining us. That was John Eckbert,
Speaker 1: the chief executive of five Guys in the UK and Europe.