The Bird & Bird Real Estate team undertakes a lot of work for VQ Limited, a London-based restaurant brand which has a number of USPs. Associate Emma Brindley-Raynes recently interviewed Simon Prideaux, Managing Director of VQ Limited, to get his insights into current market trends in the F&B sector and the company's strategy in the pre-Brexit economic climate.
1. Can you tell us what makes VQ different from the other restaurant brands out there?
The VQ brand has been going for some years. I worked for VQ a number of years ago, left to pursue some of my own ventures and then returned in 2012 because I really believed in the brand. VQ stands for Vingt-Quatre and is a 24-hour dining destination - this is what makes us stand out from the competition. We relaunched the brand before the 2012 Olympics and in the first year alone we saw a 30% growth in the business.
2. You've worked in the F&B sector for a number of years - in your experience, how has the sector changed since you started out?
The sector has changed hugely, and for a number of different reasons. The key ones include an increase in competition in the casual dining sector, in no small part due to the increase in the last decade or so of investment of private equity funds. This means that the choices that customers have has gone up. Walking down most high streets people will have a choice of cuisines that they can pick from, so it's key to provide a good offering.
There has also been a change in consumer attitudes. The customer wants to have a unique experience when dining out and it is up to the restaurants to provide this.
3. We've been working together on some new sites for VQ, all of which have been in hotels. What is it about hotel locations that appeals to the VQ brand?
There are a few different factors. The first is the VQ brand itself. We serve food 24 hours a day and this ties in well with what hotels are looking to offer to their guests, who are also looking for more experiential travel. F&B is something that hotels find notoriously difficult as of course it is not their speciality and that's where VQ can come in. It works both ways - we help the hotel give its guests a great eating experience and in return, we have an in-built customer base.
One of the challenges when putting an independent restaurant in a hotel is making sure you don't put people off who are non-hotel guests - that's why VQ sites have their own entrance - we are part of the hotel experience but we really have our own identity.
4. When working with a new hotel partner, what are the key things VQ looks to do to ensure alignment between the hotel owner and VQ?
The key things for us have always been about relationships - communicating effectively and always keeping dialogues open and people up to date during the entire process, from the negotiation of the deal and the lease right through to the day to day running of the business. To ensure good alignment both parties really need to trust each other as we reflect on the hotel and they in turn reflect on VQ.
5. The casual dining sector is going through a period of adjustment – what do you think are the reasons for this?
Well, the influx of private equity funds does mean that a number of the chain restaurants have been purchased at high prices and have expanded very quickly as the business model relies on quick and high profits levels. Combined with the increase in competition on the high street and the smaller margins in running restaurants, the market has become quite challenging.
6. What do you think are the reasons for decreasing restaurant margins?
Certain key costs have increased a lot - these include food prices and wage bills - which may of course also be impacted upon by Brexit, depending on the deal that is done. The increased competition and the economic climate also mean that the consumer is more aware of pricing. Increasing prices can really have a negative impact on the customer base so restaurants avoid doing this.
7. How are new technology disrupters affecting VQ?
The biggest technology disrupter has undoubtedly been the Deliveroo/Uber Eats phenomena where people want to be able to eat restaurant quality food in the convenience of their own home - we even had one person whose order consisted of a single packet of ketchup. We've really embraced this and delivery now accounts for a large percentage of our business. This obviously has some challenges - we serve good quality food at a reasonable price and with a varied menu that means there's something for everyone at any given time of day - and we want to keep it that way. But delivering food can of course impact on how it tastes after the delivery process so we are always looking at ways to improve this. It always surprises me that our third best seller for delivery is a full English breakfast as I wouldn't have thought it travels well - but it's super popular, particularly on a Sunday morning!
8. What's on the horizon for VQ in the next 2-3 years?
We are looking to continue to expand into hotel sites - we strive to ensure that the VQ brand is known for both quality and consistency. As we expand consistency becomes more of a challenge - which is why we carefully consider any new sites and have built up a really great team who share our values and vision for the VQ brand going forwards.