Julian Metcalfe: ‘Itsu is still pretty sloppy’

On taking Itsu out of London

Julian Metcalfe: In business, you sometimes get into a cycle. We were very good at fast lunchtime business. We had a lot of people from Pret and we tended to continue with the same thing. As we were driving round the M25 we kept finding these marvellous sites.

Maybe it was a bit short-term because we probably should have been opening beyond. Now, that’s what we’re doing, in Woking, Guildford, Bath, Edinburgh. It’s astoundingly exciting. St Albans was one of our most successful openings ever, it was extraordinary.

On partnering with Heart with Smart, the team behind Pizza Hut Restaurants.

I’m not a regular customer of Pizza Hut, but the team came to us. They’re a very capable, wonderful management team. The big question was could some of these Pizza Huts become itsu?

Its working beautifully. As a challenge its really quite incredible to open an itsu in between a KFC and McDonald’s in a retail park. That’s a stretch. For me, the idea of opening an itsu in the middle of nowhere was a dream. We shared that ambition and we did it. They have hundreds of extraordinary locations.

On securing investment from Bridgepoint

They’re a minority shareholder and we knew them well via Pret. They’re a really good bunch of people. They brought relationships, professionalism and discipline.

Money is not the biggest issues in our industry, it’s people, it’s menu, it’s creativity. There’s always money somewhere if you have a good business.

We swapped out one shareholder with another. A few years ago, I said if we’re going to take an outside shareholder, let’s find someone that adds unbelievable value, where you’re in awe of the brilliance of their track record. You hope they’re going to solve all your issues and soak up their brilliance like a sponge.

I found this one-off individual who had been tremendously successful in their career. The problem was they didn’t know anything about our business at all, and he was very intolerant of everything to do with the business. It didn’t really work very well.

He’s still a very brilliant man but changing him for Bridgepoint was fantastic. You often think there’s a perfect fix out there – but there isn’t. You’ve got to do it yourself.

On evolving the food at itsu

If you’re opening in between McDonald’s and KFC, you can’t do it with sushi, clearly. The building of hot food for £7 is so fundamental - and it’s extremely difficult. There’s a harmony between the equipment, the menu, the people - it’s really illusive. We’re now at 55%-60% hot food, whereas we were 5% a few years ago.

As for sushi, no one is going to build a fast-food success from sushi, even if it adds a certain panache and joy. We’ve gone from a selection of 85 different sushi options, down to 16. That’s a whole different subject – how do you do that without losing all your customers.

On extreme focus

Who would have thought a chocolate drink place could be as cool and successful as Knoops? I really admire businesses that are extremely focussed.

Whenever you drift and do a bit of this and bit of that you always regret it. Business that are great are the ones that are unbelievably focussed.

After the second Pret, we wasted 15 years messing around with it. Everything about it was right, it was perfect, but we weren’t strict, we allowed it to be all frayed at the edges by businesspeople who know more than we did about money. They took us away from the simple vision and dream.

It stared tasting like a spreadsheet. We were very weak and pathetic. We kept on hiring people that were much more capable and mature than us.

On ruthless efficiency

It’s so depressing the idea of ‘ruthless efficiency’. But for those of us who struggle with our P&L, efficiency is incredibly important. If you study KFC, the guys who’ve been very successful over a number of decades, they’re very efficient.

At the moment, Itsu is still pretty sloppy. Pret was really sloppy – agonizingly sloppy! When you get covid, New York wages and all sorts of other issues, you can’t be sloppy.

Efficiency isn’t a romantic thing to talk about, but it’s bloody important. We use robots from Japan, and though they cost £100k, they do they work of five people, they don’t get sick, they don’t need holiday

On prices and inflation

It’s very important that we keep our prices within boundaries. Its fundamental to remain competitive. We’re all getting poorer, it’s frightening. As much as we resent Amazon, there are lessons to learn.

We have had a 2% price increase. I don’t get involved in pricing, I would fight to have no price increases at all, but that’s obviously not sustainable. How long we can continue at 2%, I’m not sure. It’s clearly a massive issue for all of us this year and next, on top of all the issues we face. It’s really bad

Many of our costs have basically doubled. I think the only way round it is you battle with prices and portion sizes, but you also have to come up with creative solutions. There’s value in something which is beautiful and outstanding. It’s our job to make something worth it.

On omnichannel and retail

I’m not a fan of licencing. We keep seeing products popping up in supermarkets with high street names - but most will be licences.

The reason Itsu grocery exists, is it was very difficult for our supply team to do the job they needed to do, to go to Japan and Korea and develop the right miso, as they were too busy delivering food to 80 stores. It was too much!

We wanted crispy seaweed thins, and it was a case of flying over to Korea and doing a deal and buying a container of them. They sat in a port for two weeks because we didn’t know what to do with them. We learnt bloody quick.

We now have 60 or 70 people in our grocery team. Its very creative and very exciting. It came from a dream of doing our own thing and supplying our restaurants with better quality food. You can’t buy proper gochujang here, you have to go to Korea

On having another big idea

It would probably take untold thousands and thousands of hours to develop a new concept. It’s taken 15 years of complete mess and mistakes to even get to where we are now.

I don’t know why it’s so difficult. Some people manage to crack it, I find it very hard.

I certainly couldn’t come up with a third, though I am working on one! The second one isn’t nearly finished yet, and the first one is stumbling. Pret’s having a terribly hard time with Covid.

It’s got to be standout, it’s got to be its own thing. There isn’t a formula, it’s a dream. You keep pursuing it.

On the future for itsu

It’s been a long journey. Itsu today has not that much to do with itsu from ten years ago. It’s tiring. Very few people can grow a business all the way through.

The most important thing is to enjoy each day of the journey. If you have the vision to change something, to do something interesting, its takes 20 or 30 years.

Our future is to work on the detail every single day. Create that whole kaizen – that Japanese idea of continuous improvement. The opportunity to what you do better is endless, it’s so exciting

People are going to want food to go forever, there are many opportunities – I don’t think we’ve touched the surface.