Little Chef

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Little Chef
Type Restaurant Franchise
Genre Chain of 192 roadside restaurants
Founded Reading, England in 1958
Founder Sam Alper
Headquarters Sheffield, England
Website Official website

Little Chef is a chain of 186 roadside restaurants in the United Kingdom, founded in 1958 and owned by the UK private equity group RCapital, typically found on A roads and several on motorways. Its previous owners were The People's Restaurant Group Ltd, a company belonging to British catering entrepreneurs Simon Heath and Lawrence Wosskow, but which went into administration on 3 January 2007 [1]. Little Chef's headquarters are in Sheffield. Many branches are located next to a Burger King, a Travelodge, or within Moto service areas (franchised). Some larger branches also have a Coffee Tempo!

Contents

[edit] History

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Caravan manufacturer Sam Alper[2] opened the first Little Chef, with only 11 seats, in Reading in 1958. It was modelled after roadside diners he'd seen in the United States. By the late 1960s, it had become part of Gardner Merchant, itself a subsidiary of Trust Houses, which merged with Charles Forte's hotel and catering empire in 1970 to become Trust House Forte.

By the 1980s, Little Chef was established as catering for a wide variety of travellers from sales representatives to family groups. Innovations in the 1980s included the opening of the Little Chef Lodge hotels alongside some Little Chefs (later rebranded as Travelodge) and the opening of Little Chefs at Trust House Forte motorway service areas. In 1987 these service areas became known as Welcome Break after the acquisition of the smaller Welcome Break group of motorway service areas and the Happy Eater roadside restaurants, Little Chef's main rival at the time, as part of the break-up of Imperial Group. Under Forte ownership Little Chef and Happy Eater retained their separate identities.

In 1996 the catering and broadcasting conglomerate Granada successfully mounted a hostile takeover for the Forte group. Granada converted the Happy Eater chain into Little Chefs by the end of 1997, and opened Little Chefs at most of its motorway service areas. The Welcome Break chain was sold by Granada, the Little Chefs at those motorway service areas becoming a similar table service restaurant, Red Hen. In 2000 Granada merged with the catering group Compass Group Holdings to form Granada Compass plc, but the two demerged in 2001 leaving Little Chef as part of Compass. At about this time some Little Chefs began serving Harry Ramsden's meals, a cross-branding exercise by Compass who also owned Harry Ramsden's, though this ended in June 2004.

The private equity business Permira bought Travelodge and Little Chef from Compass Group in December 2002 for £712m, forming a company called TLLC. Those Little Chefs at Moto motorway service areas - formerly the Granada motorway service areas, and owned by Compass until 2006 - are owned by Moto and operate as franchised outlets.

In 2004, designers engaged by Permira tested a slimmer version of the rotund chef on the logo, in order to 'healthify' its image. Permira claimed that, this outraged the public and the idea was abandoned. It is more plausible however that funding constraints were behind the abandonment of the rebranding.

In 2005, the company was sold to The People's Restaurant Ltd, which went into administration in early 2007. In January of that year, 192 branches were saved in a rescue deal which received much publicity (see below). More recently (December 2007), a number of sites not leased from Travelodge or Arazim (Little Chefs two main landlords) have closed as Little Chef has not been able to reach agreements with these individual landlords. These closures have further reduced the chain to 186 sites, leaving only one restaurant operational in Cornwall where once six traded. With many of the franchised Little Chefs at Moto service areas expected to close as the end of that agreement in 2009 the chain will be further reduced - a far cry from a company which at its peak operated over 400 restaurants.

[edit] Competition & decline

From its inception to the mid-1990s, Little Chef had relatively little competition from other chains of eating houses. In the early 2000s the business was seen to be one in decline, variously attributed to owners from Granada onwards having extracted too much money from the business without investing in updating the format and the infiltration of the roadside market by fast food groups such as McDonald's, KFC or Burger King. Granada and then Compass had opened several Burger Kings within or adjacent to their Little Chef sites. A further challenge to Little Chef was the rise of pub chains such as Wetherspoons in town centres, offering a standard menu aimed at the business customer during the day, and of roadside pub chains such as Brewer's Fayre which catered both for the business and family markets. Also, newly refurbished service stations proved to be very popular, offering more choice such as Marks & Spencer and the ever fashionable coffee houses. It would seem that Little Chef completely ignored all the competition it was faced with.

As mentioned above, the format had changed very little. Restaurants still looked like they belonged in the 50s and although this may seem quirky, it wasn't the case as many of them just looked run-down and out of date. Customers complained of poor quality food, poor value for money and disillusioned staff. However, the prices kept rising, much to customers' annoyance, earning the brand the nickname 'Little Thief'. With recent emphasis on healthy eating, customers have been reluctant to visit a Little Chef, unless for nostalgic reasons, as they believe the food to be unhealthy. These problems have given Little Chef an unenviable reputation. It is also true that motorists have 'moved on'. Many are no longer willing to sit down and spend a long time over a meal - they would rather grab a healthy snack to take out and get on with their journey.

In 2005 it was announced that 130 underperforming restaurants were to be closed, reducing the chain to 234 restaurants. Prior to that, however, Granada had been gradually reducing the number of restaurants, from well over 300 at one time. During 2005 Travelodge Hotels Ltd (the new name for TLLC) made various announcements about the sale of some or all of the restaurants, until in October the chain was sold to The People's Restaurant Group Ltd, who planned to modernise the restaurants and introduce self-service.

Changes introduced during 2006 included the opening of coffee shops under the name Coffee Tempo! within several larger branches. These 'grab and go' units were developed by Nick Smith, who joined Little Chef as development director after leading the design and implementation of the Wild Bean Café format at BP petrol stations, under the guiding hand of BP Development Guru Thomas Snape. Little Chef also introduced a takeaway menu; both initiatives were aimed to increase the appeal of the brand to customers unwilling to spend a long period waiting for table service.

Furthermore, The People's Restaurant group slashed menu prices, in an attempt to get more custom. Unfortunately, the idea didn't work; the only result being less money going through the tills.

[edit] Rescue deal

In January 2007 it was widely reported that Little Chef was taken into administration.[3][4]

The company was rescued on the 3 January 2007 by RCapital, a UK private equity group, who have paid less than £10m. However, 38 of the 235 branches were not included in the sale, and were closed immediately;[5] the remaining restaurants are continuing to operate normally.

The new owners have admitted that they have a huge task in front of them, although they insist Little Chef does have a future with a great deal of potential. Although the general public are fond of the brand, development is needed to get customers back through the doors. It was announced in March 2008 that celebrity chef Heston Blumenthal is set to star in a Channel 4 reality TV style program to re-vamp the little chef chain. [6]

[edit] Menu

Traditionally, a staple of Little Chef's menu has been all day breakfasts, although some can only be bought before 11am. Nearly all the menu consists of traditional British food. Main meals options include beefburgers, steaks, haddock or cod, all with chips. Pasta meals were introduced in the early 1990s. Salads are also available. For dessert, pancakes have always been the most important feature. There is also a children's menu and a new takeaway menu.

Prior to the company going into administration, the People's Restaurant Group had begun to modernise the Little Chef menu, introducing 'subs' and panini. A special feature of Little Chefs has always been the availability of a free orange lollipop for each diner on leaving.

[edit] Trivia

  • Little Chef was the eponymous subject of a song by Frazier Chorus in 1989.
  • The Little Chef was the subject of an episode of Max and Paddy's Road To Nowhere, in which it was robbed by someone joining them.

[edit] References

  1. ^ BBC NEWS | Business | Little Chef enters administration
  2. ^ http://findarticles.com/p/articles/mi_qn4158/is_20021011/ai_n12653053/pg_1 Sam Alper's obituary
  3. ^ Little Chef chain fights to stave off bankruptcy | Business | The Observer
  4. ^ Why Little Chef hung his hat up | The Sun |HomePage|News
  5. ^ BBC NEWS | Magazine | The road to recovery
  6. ^ Heston Blumenthal to transform Little Chef - Daily Telegrah News. Retrieved on 2008-03-27.

[edit] External links

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