By-passed by the modern world

The demise of Littel Chef says much about changing tastes and the need constantly to monitor the public pulse.

by Peter Martin

The demise of a once iconic brand says much about changing tastes and the need constantly to monitor the public pulse.

There was a time when just about every restaurant executive, not to mention consultant, had a pet theory about how to turn around Little Chef.

These days, fewer care. But, the latest set-back for the chain has nevertheless produced no shortage of analysis on what went wrong - not to mention a few plans for how it might still be reinvigorated.

It is a testament to the residual warmth that both the public and the industry has for the roadside brand. Its fall into administration even made the main TV news.

But that hasn't stopped it becoming a bit of a joke too, with its relevance to the modern eating-out market questioned. Like Berni Inn, it's remembered with a nostalgic fondness. Unlike Berni Inn, it is still around, although perhaps the best option for Little Chef, and its chubby chappy logo, would now be to lay it peacefully to rest with at least some dignity intact?

Two years ago, when Little Chef last changed hands, I was one of the many ready with a view on the even then struggling chain's future prospects.

In this every column, I mused over how Little Chef might have become the UK's answer to Denny's, the US roadside diner chain famous for its breakfasts and virtually a national institution in its homeland.

"Like Denny's it's all-day breakfast offering has been central to its appeal. But unlike Denny's, Little Chef has failed on its service levels (no polite greetings, happy smiles and instant refills here) and also in not keeping up with changing public tastes," I wrote then.

The problem was not all-day eating, with breakfast at its heart. After all that's a market that McDonalds still wants badly and, ask any airport operator, breakfast remains the core day-part in feeding the travelling public.

But what constitutes breakfast has changed, or at least widened. Unfortunately, little has changed at Little Chef in the intervening months.

My recipe back then was fairly straightforward. First, add speed and convenience to the operation. Learn from Moto and the M&S Simply Food tie-up (then in its early days) and look at integrating a convenience store element.

The marriage of Subway and Spar convenience stores in Ireland was a good example, as from the States was the Pennsylvania-based Wawa convenience store chain that sells "hot hoagies" (sandwiches), with customers making their order by touch screen, even at the gas pumps.

Second, bring in a big name, high profile and instantly recognisable brand to augment or replace the Little Chef image. Something like a Starbucks or a Subway, perhaps? With those two concepts among the fastest growing in the UK, that option must remain open. The re-branding of so many motorway services around the likes of M&S and Costa probably proves the point. If motorists have a split second to decide on whether to stop, the promise of something reassuring and reliable can only help the decision-making.

Third, with poor and erratic service and staffing, especially in the more rural sites, a big problem, look at a Nando's style counter-service operation or even drive-thru? To gain greater staff commitment give managers a real stake in the business's success, or even consider franchising to "mama and papa" teams.

None of this is difficult, just the reading of market trends. But the market has now moved on yet again.

Most motorists only break their journey if they really need to - for fuel or a toilet visit. These days, the major filling station chains have all upped their take-away food, especially coffee, and convenience store offerings. Roadside competition is so much hotter, and neccesity to stop less.

But venture into the lobby area of any Hilton or other mid-range hotel chain around the country and it will be packed with business people in small meetings with laptops open, drinking coffee and eating muffins, wraps or sandwiches.

The casual business meeting market is big, but another that has seemingly passed Little Chef by. Out of town the hotels have the trade, in town it's the likes of Caffe Nero and Starbucks. It's all about finding a coffee shop to set up office in.

There has been criticism of Little Chef's recent decision to introduce Wi-Fi in its restaurants. It wasn't actually a bad idea, just that there should have been more pressing items ahead of it on the corporate agenda.

According to to The Sunday Telegraph, the collapse of the Little illustrates the downside of Britain's buoyant buyout culture, "highlighting the way a quick succession of owners can drain the assets of a profitable company until there is almost nothing left".

It is fashionable to blame investors for many of the industry's ills, and in the pub trade much of the criticism is valid. But private finance has been one of the major catalysts for successful growth in the eating-out sector.

True, previous owner Permira took, what can best be described as, a sticking-plaster approach to upgrading the Little Chef brand. Nevertheless, many of the shortcomings of recent months have to be put down to operations and management, and in particular being off the consumer pace.

Cut-price offers seem to have been the main marketing weapon, but as the pub sector has now learned, "value" offerings in isolation don't work.

The onward march of health, provenance and the environment as major factors in the food mix can't be ignored. Just take a look at the food retail sector.

Booming food sales over the holiday period for Tesco, Sainsbury, M&S, Waitrose and Morrisons were all underpinned by a surge in sales of premium food ranges. Now we have M&S and Tesco vying for the title of the UK's "greenest" retailer, both having this month unveiled plans to go "carbon-neutral".

Marks & Spencer is investing £200m in a five-year plan that will include sourcing more food from the UK and the Republic of Ireland to cut air freighting. Tesco said it aimed to develop a carbon footprint labelling measure for all products, with new "green" labels allowing customers to compare and shop for items which required less energy to produce.

Value remains central to the Tesco promise, but in an increasingly sophisticated consumer environment the mix of consumer messages is crucial - as has to be on the money for all parts of the market.

That's a real lessons for businesses like Little Chef, with a potentially broad customer market. It's about mix, balance and range of offers - and staying in tune with consumer trend swings. Really just on experience and instinct is no longer good enough.

So what next for Little Chef, or at least its sites? There will still be 200 or so looking for a new lease of life. Perhaps, the biggest influence will be the attitude of the brand's biggest partner, the Travelodge hotel chain.

It has always been surprising that Travelodge, an aggressively ambitious company in its own arena, has not taken more control of over its own food and beverage or exerted more influence to provide a product that reflects its own modern, go-getting image?