Grill’d on the front burner

We’d never actually suggest that booze is a good way for an entrepreneur to get through this downturn, but for Simon Crowe, founder of healthy burger chain Grill’d, it has become an important part of his recession-busting strategy.

While fast-food typically does well in a downturn, Grill’d’s burgers are a bit more upmarket, retailing for around $10. But the company has moved quickly to grab those customers looking to trade down from full-service restaurant to a cheaper alternative by adjusting its offering.

As well as adding alcohol into the chain’s product mix, Grill’d has added kids’ meals and expanded its offering to including entrees. But the biggest change is in the area of service, where Grill’d has moved to offer table service to all dine-in customers, rather than just calling out their order number and making them come and get their food.    

“We see that in this economy, people are coming from full-service restaurants and are really in search of value,” Crowe says. “When we look at what value equals and we know that we look at product, value and service. We’ve put our products on a pedestal, so we are not going to change that. We weren’t going to move on price, so we realised we need to dial up on service and present a restaurant offer rather than the takeaway offer.”

As well as growing sales, the company has stepped up its cost control, using its complex point-of-sale IT system to monitor store performance and manage sales-to-staff ratios on a half-hourly basis.

“Rostering tools are crucial. We know that convenience is a big part of what our offer is, so we know that 10 minutes is the maximum a customer should wait. We need to scale our labour up and down to meet that goal.”

The strategy is working. Crowe expects revenue will hit $27 million in calendar 2009, with the company’s 24 stores (12 are company-owned, 12 are franchised) averaging annual turnover of over $1 million.

Careful growth

The chain, which was established in the Melbourne suburb of Hawthorn in March 2004, had been content to concentrate on the Melbourne and Brisbane markets, but took the plunge into Sydney in March by opening a store at Crows Nest.

“We’ve been paranoid about Sydney,” Crowe admits.

“The marketplace is different there. Property is more expensive, sites are lot smaller, geographically it’s a lot harder to get around. We recognise that the word-of-mouth will be slower to spread because of the geography.”

Crowe says initial feedback and trading results have been good, and the company will aim to open three to five stores in Sydney by the end of the year, with well-heeled suburbs such as Bondi, Coogee, Mosman, Neutral Bay, Paddington, Newtown, Glebe, Balmain and Darlinghurst among the likely targets.

Most franchisors are expecting a boom in the number of potential franchisees as unemployment rises and former workers are looking to spend their fat redundancy cheques, but Crowe is wary.

“We’re not making decisions based on who’s got cash. To be honest, we need people who have a young attitude, who are hands on.”