YO! Sushi chief executive Robin Rowland talks to MCA on the back of publication of the company’s full-year results.
He discusses the impact of Brexit on trade, why he does not believe that the rapid rise of delivery is a “game-changer” for the sector and discusses the first progress of the first YO! Sushi Bar. He explains why he thinks the group – which will hit the 100-store milestone next year – now has the potential to grow to at least 150. He also talks about the group’s openings in Boston and New York in the next few months and its other international openings. He also talks about further strengthening the senior management team, with the search for a marketing director launched.
Trading
The company does not reveal like-for-like sales performance but Rowland said it had consistently outperformed the Coffer Peach Tracker in the current year. He said trading over the past few months had been strong, although admitted this was against fairly weak comparatives last year.
He said: “We’ve gone through a period of restructure I’m encouraged by results, particularly in the last couple of months. It’s more about the good work in terms of restructuring the business, with a new operations director and a new people director starting next month. We are going to be recruiting a new marketing director as well. If you include me, that’s four out of the eight on the exec team which has changed. It certainly seems to have produced good momentum.”
Rowland said so far the company had not seen any fall-out from Brexit. In terms of wider consumer trends he said weekends were an increasingly important period for attracting families.
In the last full financial year – to November 2015 – sales grew by 10.5% to £83.7m with EBITDA up 13% to £11.3m. During that period five new sites were opened in the UK, with a further four company-owned restaurants launching in the States and the same number of international franchise stores were unveiled.
Growth plans
Rowland said the currently 90-strong company is likely to be at 95 by the end of the financial year and will hit the 100 milestone in its 20th year next year.
He said: “When I started in 1999 I thought it would be wonderful if we got to 100 restaurants. That’s going to happen next year and now the figure in the forefront of my mind is 150. That’s the next goal to hit.
“But I’m very clear that there’s no prizes for opening restaurants that don’t work. There’s nothing more tragic than opening sites just for the vanity of it. You want to open profitable restaurants and that has to underpin all our expansion goals.”
International expansion
Rowland said the group would be adding to its currently five-strong US estate before the end of the year – with Boston Seaport due to open in October, followed by New York West 23rd Street the following month.
International franchise stores are due to open in Dubai’s Burjuman Mall, Sydney Airport and Paris’ Charles De Gaulle Airport.
Types of sites
“We have got four types of sites: transit locations – airports and railway stations – and they’re doing well. We’ve got concessions – with Harvey Nichols and Selfridges and the like – which are also doing well. We’ve got shopping centres where you might not expect us to be doing as well but performance has been good. The ones that are mixed – still in growth but it does vary - are the standalone destinations. The key to YO! Sushi is high foot traffic. As long as you have a prominent high street location that is well frequented we do just fine.”
Delivery
Rowland said the group’s take-out and delivery services were continuing to increase in popularity but still represented only 10% of the business.
We’re not a slave to take out and delivery. It will grow but it’s not our core business. I don’t want it to grow past 15% because then I think it changes the kind of business you’re running.
“I’ve spent a lot of time in New York and there it’s the way people live their lives. I don’t think it’s a game-changer, I think it’s just us catching up with the States.”
YO! Sushi Bar
YO! opened its first YO! Sushi Bar in Chelmsford at the end of last year – featuring a separate cocktail bar alongside the 72-seat conveyer belt.
Rowland said the experiment had proved successful with customers but stressed that there were no plans to repeat it at present.
He said: “It was a site-specific experiment. I’ve got no hang-ups about stamping that across the sites. We didn’t put a bar into our most recent three sites – Harrogate, Newcastle and Bournemouth although we have made drinks more prominent.
“It’s a bit premium and it’s nice thing to go to before you sit down for some food. It’s a nice meet and greet place. We don’t have large units so we don’t often have the option of putting a separate bar in. We had a bit more space in Chelmsford.
National Living Wage
YO! was one of the company’s which extended its offer of the National Living Wage to under-25s when it was introduced in April. Rowland said he “cannot understand” firms that did not do the same.
He said: “NLW was an ethical stance. I thought we should send that message. Like everyone else we have had to look at our rotas and manage our costs more carefully but we haven’t put our prices up. We have been growing our sales to the point where it’s evening out again.”
Challenges
On potential obstacles for the sector over the next 12 months, Rowland said: “The cost of goods is a key one for us because we buy overseas is a challenge and that makes it challenging with the weakening pound.
“The other one – and I know it’s like a stuck record - is the war for talent. Coming back in it was obvious to me that we have a massive opportunity to be an employer of choice. With Jo Childs (people director) coming in we are committed to becoming a go-to employer. Everyone needs to get their head around this in a meaningful way.”
