Julian Metcalfe: Itsu close to competing with big beasts of QSR

Itsu is preparing to roll out its next generation of restaurants, which have an evolved format with more hot dishes, evening-friendly lighting and a suburban, family friendly proposition.

Founder Julian Metcalfe said some of the sites, such as one forthcoming in Wood Green, would have no sushi at all – a major departure from the brand’s origins serving professionals in central London.

Speaking at MCA’s Food to Go Conference, Metcalfe said out of the 18 new sites itsu plans to open this year, about eight will come under this “completely new format”.

“I really hope they will feed teenagers and young people and families better than we ever have before,” he said.

“They will have much better lighting, a much better menu, new equipment. Some of them don’t even have any raw fish at all.

“It’s a really interesting use of technology, all new equipment and maybe 100 new hot dishes. Much better food, everything’s made to order.”

Wood Green for example will have about 80 covers, with an average spend of £6.80.

Metcalfe downplayed itsu’s 2023 opening target of 18 as “not a huge amount” – but said it allowed the brand to keep innovating and moving forward.

He said he was inspired to expand the brand because of the consumer demand for nutritious, affordable, fresh food: “It’s just huge, it’s never been so great.”

But he acknowledged building and operating a successful food to go brand was “very demanding, very exhausting”.

“On a good day, we do it okay. Sometimes we do really well. Other times, you’ve got to keep opening to keep learning.

“I love opening new stores because I love the feeling of being able to give people opportunity and promote people. It’s wonderful. When you start closing more than you’re opening, it’s depressing. Not a good feeling at all.”

Franchise partners 

The entrepreneur, who also co-founded Pret a Manger, likened franchising to raising a child and sending them off into the world.

He said building a formula, structure, training and auditing strong enough to hand over a business, was “kind of nirvana”.

“It’s always eluded me,” he said. “Pret a manager has only just started franchising recently, and I don’t know how successfully.

“I’ve always wanted to be able to build something strong enough so that other people could run it.

“It’s a bit like what you wish for your children when they’re 18 or 21 and they build their confidence and skills. There’s few things in life more wonderful than seeing your children grow stronger than you ever thought they could be.

“It’s the same for itsu. Can we build something strong enough that other people can run it and maybe better than us? That’s the plan.”

The brand has four or five franchise partners and has opened 10-15 stores with them so far, with plans for further expansion in France and Belgium.

“They’re [franchise partners] remarkable, I really admire them because they’re taking someone else’s vision and someone else’s business and growing it.

“We do need to find a couple more really remarkable partners.”

One of the first partners for itsu was Heart with Smart, the management team behind Pizza Hut Restaurants.

Metcalfe said the Jens Hofma-led team was “in a in a rut” with Pizza Hut and needed to find something new to work with.

Together they have converted three Pizza Hut Restaurants sites into itsu, with sites in Aberdeen and Edinburgh, and one coming up in Glasgow.

The first opening was in Reading in between a McDonald’s and KFC.

“They [Heart with Smart] were really excited by it, and I remember thinking God, this is going to be a train crash,” Metcalfe said.

“I thought, are we really ready to compete next to these two brands? The answer was no, we weren’t ready then and we’re not ready now. But we will be soon.”

Once the new format store is nailed down, Metcalfe hopes to bring it to more Pizza Hut Restaurant sites. Getting all the elements right has been a challenge though.

“When you have a bad day you think, Christ, I’m going backwards in life.

“I’m sitting here aged 60 something, almost every day for months at this one store, trying to get the equipment right, to get the relationship between the technology right, and listen to the manager and the team. Reinvent, reinvent, reinvent.

“It’s fun! I spent two days building a pen holder. We’ve been serving millions of people a year there’s nowhere to put the pen. It’s just ridiculous.”

People & technology 

The self-deprecating founder suggested it was no longer affordable to have lots of staff, as it didn’t allow enough investment in product.

“I don’t think having 14 charming, well trained, committed, proud members of staff in a line at 12.30 is doable anymore.

“It was a very strong instinct of all of us at itsu that after Brexit, the challenges we face are enormous on trying to find motivated wonderful members of staff who we can afford to pay.

To reduce its labour burden, itsu has put in some 600 kiosks across its estate, a third iteration of the technology.

“On the whole, young people like using kiosks. Apparently they even prefer it.

“It does allow us to not have chaos, when the kiosks work. It has taken us about 10, 15, 20 designs to get it right.

“The one which open in two weeks is the best so far. The one we opened last week is a bit clumsy.

“I prefer to use a kiosks now – and I’m terrified of them.”

Investment in technology will allow itsu to pay the staff it does have better and invest more in food.

“In the end of the product is everything,” he added. “If we have people who can help you pay and select your food, and collect it from someone who is engaged and proud to serve you, that’s great,

“Then we can put the money into the making of the product, which is where it should go, frankly.”

QSR competition 

Metcalfe said it would not have been possible to challenge KFC and McDonald’s with a predominantly sushi offering, hence the continued evolution towards more hot food.

“We used to sell 75 different sushi boxes and now we sell about seven.

“For me, the great challenge is can we serve efficient, nutritious, affordable food using brown rice and vegetables, noodles and bao?

“It is such an amazing challenge to be able to rise up to and take on KFC and McDonald’s.

“I mean, they’ve had a pretty free run at it for the last 40 or 50 years.

“I’m not mad, I know how difficult this is. But I’m not going to stop just because it’s difficult.”