WEBVTT - Five Guys UK and Europe CEO John Eckbert Talks Expansion

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<v Speaker 1>After three years of food price hikes, US and European

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<v Speaker 1>consumers are voting with their wallets now. Pressure on the

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<v Speaker 1>sector has led to supermarkets and fast food chains offering

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<v Speaker 1>more promotions and deals, including McDonald's in the US launching

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<v Speaker 1>a five dollars value meal now here in the UK.

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<v Speaker 1>Five Guys, which has more than nineteen hundred locations worldwide,

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<v Speaker 1>has continued its expansion despite uncertainty around the economy. It's

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<v Speaker 1>discuss the outlook for the industry with John eg Bertie's

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<v Speaker 1>chief executive of five Guys in the UK and Europe. John,

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<v Speaker 1>thank you so much for joining us. A lot more

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<v Speaker 1>fun talking about burgers and milkshakes and anything else that's

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<v Speaker 1>going on in the world right now. It's going well

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<v Speaker 1>because you're expanding.

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<v Speaker 2>Yeah, So five Guys we have two hundred and seventy

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<v Speaker 2>stores in Europe now one hundred and seventy in the UK.

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<v Speaker 2>We'll be opening about fifty stores a year, so at

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<v Speaker 2>a million to a million and a half investment per store,

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<v Speaker 2>that's a significant vote of confidence in the future here

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<v Speaker 2>in Europe.

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<v Speaker 1>So what's your biggest concern right now? What's top of

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<v Speaker 1>mind of things you wor is planning is it staffing,

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<v Speaker 1>is it food price inflation?

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<v Speaker 2>Well, of course the UK consumer and the European consumer

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<v Speaker 2>has been under a lot of pressure of late. And

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<v Speaker 2>how do you provide a value proposition to the cut

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<v Speaker 2>to the consumer in this market?

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<v Speaker 1>And the good thing.

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<v Speaker 2>For five Guys is that we have the highest value

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<v Speaker 2>for money fries for example, in the business the generosity

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<v Speaker 2>ounce for ounce is the best in terms of quantity

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<v Speaker 2>in terms of value for money for the fries is

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<v Speaker 2>the competes with all the QSRs for example. So yeah,

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<v Speaker 2>providing customers with great value for money. Five Guys has

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<v Speaker 2>a lot of free stuff as well. We have free

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<v Speaker 2>pe nuts, free refills, free fifteen, free topping. So the

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<v Speaker 2>headline price may be higher than the qs R, but

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<v Speaker 2>when you add it all up, the value proposition is

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<v Speaker 2>pretty compelling at five cups.

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<v Speaker 1>Is it worrying for your margins? I mean, given you

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<v Speaker 1>you also pride yourself of saying you provide very high

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<v Speaker 1>quality ingredients that I imagine have gone up quite a

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<v Speaker 1>lot in terms of expense in the last three four years,

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<v Speaker 1>but you haven't passed on that to consumers.

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<v Speaker 2>Yeah, So for other brands, the playbook whenever you have

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<v Speaker 2>an environment like this would be to shrink the product

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<v Speaker 2>and to compromise on the quality of the ingredients, and

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<v Speaker 2>of course five Guys would never do that, So we

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<v Speaker 2>have to focus on providing fantastic customer service along with

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<v Speaker 2>the great product. In five Guys is a treat. So

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<v Speaker 2>you're not going to go to five Guys every day

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<v Speaker 2>or you know, multiple times a week necessarily, So when

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<v Speaker 2>you go to five Guys, you want to have the

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<v Speaker 2>best burger. You can have fantastic customer service, great milkshakes,

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<v Speaker 2>and perfect fries. So we've got to focus on making

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<v Speaker 2>sure that you get that.

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<v Speaker 1>And it's true you go around the country and actually

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<v Speaker 1>go and like quality tests every day you're having multiple

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<v Speaker 1>burgers or multiple bites of burgers just to make sure

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<v Speaker 1>that they all taste the same.

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<v Speaker 2>So we're very operations driven and I'm fully certified to

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<v Speaker 2>make burgers and fries. I can cook your burger next

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<v Speaker 2>time you come in. And being able to know our

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<v Speaker 2>standards and cook to standards. We don't have timers, we

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<v Speaker 2>don't have any cooke to we have to actually know

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<v Speaker 2>the standards that we're cooking to. So we're all certified

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<v Speaker 2>in the kitchen and that's really the focus of the

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<v Speaker 2>business is on burgers and fries and taking care of

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<v Speaker 2>hungry customers.

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<v Speaker 1>Is it? You know, is staffing an issue? Are you

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<v Speaker 1>Are you finding enough people that want to work? Yeah?

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<v Speaker 1>Of course.

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<v Speaker 2>You know, having great crew is so important in the

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<v Speaker 2>food business. It's all about passion because you want to

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<v Speaker 2>know that people who are cooking your food actually care

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<v Speaker 2>about the product that you're getting. So making sure that

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<v Speaker 2>we have people who are not only certified to make

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<v Speaker 2>the product, but actually care about the food that you're

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<v Speaker 2>going to be eating is essential.

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<v Speaker 1>But competition must be high. I mean there's like a

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<v Speaker 1>you know, talent war even for like wagers and people

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<v Speaker 1>that are at that high standards. Do you have to

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<v Speaker 1>pay more? How do you retain them? Yeah?

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<v Speaker 2>So, first of all, we pay more than the minimums,

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<v Speaker 2>so we pay more to start with, and every time

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<v Speaker 2>you learn something new at the business, we increase your

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<v Speaker 2>pay as well. We also have invested millions into learning

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<v Speaker 2>and development, so we can take you from a crew

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<v Speaker 2>member to being a senior leader in the business with

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<v Speaker 2>you know, hundreds of employees working for you. So that

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<v Speaker 2>learning and development journey is something we've really take pride in.

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<v Speaker 2>So seventy five percent of our store managers are come

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<v Speaker 2>from our crew base now, so that's part of the

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<v Speaker 2>journey we've been under.

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<v Speaker 1>It is a UK market different to other European markets,

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<v Speaker 1>so do people buy and consume burgers and fries differently

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<v Speaker 1>on the continent.

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<v Speaker 2>Every country is a little different. We and we're surprised

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<v Speaker 2>by every country that we open in. We just opened

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<v Speaker 2>up in Port of Banous in the south of Spain,

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<v Speaker 2>did one hundred and seventy thousand pounds in the first

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<v Speaker 2>last week in trade, which was three or four times

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<v Speaker 2>what we thought we would. We just opened up in Wimbley,

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<v Speaker 2>which we thought, you know, all of the kind of

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<v Speaker 2>high volume sites in the UK would probably have been done.

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<v Speaker 2>But when Taylor Swift played we did one hundred and

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<v Speaker 2>eighty thousand in a week worth of business there. But

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<v Speaker 2>when Harry Styles takes Olivia Dean for a burger two

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<v Speaker 2>of five guys, that really helps and drives people in

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<v Speaker 2>to go.

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<v Speaker 1>That's something to try. Are there any new countries that

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<v Speaker 1>you want to be in Ashup?

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<v Speaker 2>We're going to open Portugal next year, so we're looking

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<v Speaker 2>at Lisbon looking for a prime pitch site. We always

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<v Speaker 2>want to open up in a kind of flagship location,

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<v Speaker 2>so we're looking for the perfect site in Portugal.

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<v Speaker 1>We have a number of very talented food critics here

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<v Speaker 1>and I remember two years ago it was all about

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<v Speaker 1>the burgers. I mean, there were a number of burger

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<v Speaker 1>chains that were opening in the UK because it was

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<v Speaker 1>a hot new thing coming from the US. Is the

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<v Speaker 1>space still very crowded or is it less crowded in

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<v Speaker 1>Europe compared to the UK.

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<v Speaker 2>Well, a number of the US better burger brands have

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<v Speaker 2>come to the UK and opened and then closed shop

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<v Speaker 2>and gone back home. We've been very fortunate that we

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<v Speaker 2>have been able to open up in the pretty much

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<v Speaker 2>every pitch in the UK, and that's really given us

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<v Speaker 2>a great defensive position. And now across Europe as well,

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<v Speaker 2>we have thirty five plus stores in Germany, France and

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<v Speaker 2>Spain as well, taking those prime flagship locations. For the

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<v Speaker 2>better burger segment.

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<v Speaker 1>Do you use AI or tech to streamline and to

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<v Speaker 1>get you know, better customer orders or better service?

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<v Speaker 2>We haven't figured that out yet. We are looking at

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<v Speaker 2>Kiosks for the first time because we wanted to be

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<v Speaker 2>as famous for customer service as we are for great

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<v Speaker 2>burgers and fries, and we weren't sure to do kiosks

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<v Speaker 2>really fit into with that strategy. But there are a

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<v Speaker 2>lot of young customers particularly who really want a digital experience.

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<v Speaker 2>Our best till operator is no competition for them for

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<v Speaker 2>a great Kiosk. So we're providing that digital journey now

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<v Speaker 2>and investing in that strategy.

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<v Speaker 1>But Kioso is it less It's less expensive for you,

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<v Speaker 1>I imagine, But I feel like everyone is doing it.

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<v Speaker 2>You know it may be, but we're not doing it

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<v Speaker 2>for that reason. We're doing it to delight the customer,

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<v Speaker 2>and there are there is a customer subset that wants

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<v Speaker 2>a digital journey.

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<v Speaker 1>I mean, indulge me. Who's like your perfect customer? Apart

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<v Speaker 1>from the celebrities, I can can bring other people.

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<v Speaker 2>Do you eighteen to thirty five year old looking for

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<v Speaker 2>either something fun to do in an evening out, some

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<v Speaker 2>place to take your family when you're shopping, going to

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<v Speaker 2>a movie?

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<v Speaker 1>All those are great.

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<v Speaker 2>Occasions to think about five guys and go for a

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<v Speaker 2>and fry.

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<v Speaker 1>Do you feel like you need to have a healthier

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<v Speaker 1>proposition because of everything that's going on in the in

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<v Speaker 1>the I guess nutrition world, right, even the nest slaves

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<v Speaker 1>and union leavers are trying to cut calories to give

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<v Speaker 1>customers a healthier journey.

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<v Speaker 2>We're working hard to come up with some better alternatives

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<v Speaker 2>to the burger and fries, but we want to make

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<v Speaker 2>sure that it's the same caliber quality so that when

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<v Speaker 2>you come in, you go that's best in class. So

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<v Speaker 2>we're not going to offer anything until we're confident that

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<v Speaker 2>we have that level of product. But we do and

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<v Speaker 2>we will extend the product line in the business.

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<v Speaker 1>Do you have a say on the new products that

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<v Speaker 1>go online? Well, the Morell.

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<v Speaker 2>Family, the Morrell family, there actually are five guys and

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<v Speaker 2>they actually have to approve anything that we would we

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<v Speaker 2>would serve, but we're working hard to convince them.

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<v Speaker 1>Any closures.

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<v Speaker 2>We have closed one site in Lahavre in France, which

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<v Speaker 2>was I guess a casualty of Brexit, But other than that,

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<v Speaker 2>we're opening stores rather than closing them.

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<v Speaker 1>And has it changed the way There's been a little

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<v Speaker 1>bit of a pattern that's taken a lot of people

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<v Speaker 1>by surprise. You know, post COVID, it's people went out

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<v Speaker 1>a lot more. I know, people stop going out, I mean,

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<v Speaker 1>is it going really fast? I feel like the cycle

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<v Speaker 1>of how we entertain and go out changes rapidly.

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<v Speaker 2>No, it has and you know we are social creatures

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<v Speaker 2>in the end, and people going out and being able

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<v Speaker 2>to be together again, it has been a powerful trend

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<v Speaker 2>and it's been great to have people back in the

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<v Speaker 2>stores for us because seeing your food cooked in the

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<v Speaker 2>open kitchen and being there with your friends and family

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<v Speaker 2>makes a huge difference for JN.

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<v Speaker 1>Thank you so much for joining us. That was John Eckbert,

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<v Speaker 1>the chief executive of five Guys in the UK and Europe.