Fish-and-chip shops have been battered by the coronavirus — but this chain pivoted to online orders and sales soared

Fish-and-chip shops have been battered by the coronavirus — but this chain pivoted to online orders and sales soared

23 Jun    Finance News

James Lipscombe was holed up in his house in Bishop’s Stortford, nursing a wife sick with the coronavirus disease, looking after two small children and running his business remotely, when the government announced the country was going into lockdown.

The managing director and owner of Chesterford Group — one of Britain’s biggest fish-and-chip chains, with 40 shops across the south, southeast and southwest of England — was forced to close all of his shops to walk-in customers, leaving Lipscombe in the biggest crisis of his career.

The company, which serves around 50,000 people a week, was burning through £150,000 in cash and, without quick action, would run out of funds in three months and go bust in less than six if it didn’t receive more government support.

That is when Lipscombe, came up with “Project Phoenix” — a three-pronged plan that would allow him to overhaul the business and reopen just two weeks later to operate in a sector that had been upended by the pandemic. “We blew up our business model and made quick-fire decisions to preserve not only the business but the mortgages of 600 people,” Lipscombe says.

The 39-year-old immediately put 550 of his staff on furlough using the government scheme, and secured a £2 million loan from HSBC HSBA, +0.49% to keep the business ticking over while he planned the reopening of his venues. The group operates under three brands: Churchill’s Fish & Chips, fishnchicken and Bankers Fish & Chips.

He then contacted the U.K.’s Environmental Health Office to look at creating new, safer ways of working to curb the spread of the coronavirus.

Read:Plastic screens and makeshift grocery stores: How one restaurant chain is surviving the coronavirus crisis

This included sanitizing all surfaces in the restaurants every 30 minutes and checking on all employees every day before they came to work. Lipscombe created “bubble teams” so that workers only interacted with employees within their assigned groups.

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Next: a complete digital makeover.

Before shutting down, just 17% of Chesterford’s sales came through digital channels, while 4% were via click and collect, and 13% were delivery order. The remainder came from walk-ins.

With additional investment, Lipscombe scaled up the group’s existing technology, which was already in use in around 60% of the restaurants, so that all 40 venues could offer delivery and click-and-collect options, as well as walk-in services.

Since May 5 — just five weeks after reopening all stores — delivery sales have grown by 440%, and click-and-collect orders have soared by 900%.

‘Within two weeks of reopening these two shops, we were back to taking £25,000 a week in earnings — the same money we were taking pre-COVID-19.’

— James Lipscombe, Chesterford Group

Establishing a social-media strategy formed the third plank of “Project Phoenix,” as Lipscombe set about using Twitter TWR, -3.69% and other platforms to communicate the new business model to customers and to educate locals about how to use the company’s new mobile app.

Chesterford’s flagship restaurant in Bishop’s Stortford, Hertfordshire, was the first to reopen, followed by its shop in Pitsea in south Essex.

“Within two weeks of reopening these two shops, we were back to taking £25,000 a week in earnings — the same money we were taking pre-COVID-19,” Lipscombe says.

That wasn’t only good news for Chesterford but also for thousands of Brits, who still name fish and chips as the national dish, with nine out of 10 proclaiming it as their firm favorite, compared with chicken tikka masala, which is preferred by fewer than one in 20, according to a recent poll carried out by U.K. Fisheries.

There are currently about 10,500 specialist fish-and-chip shops in the U.K., outnumbering other fast-food outlets like McDonald’s MCD, +0.48% and KFC YUM, -0.49%. Annual spending on fish and chips in the U.K. is a staggering £1.2 billion.

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Owning his own fleet of delivery vehicles gave Lispscombe an edge. It meant Chesterford wasn’t reliant on delivery companies such as Just Eat Takeaway TKWY, +1.68% or Uber Eats UBER, +1.17%, some of which struggled at the start of the pandemic as restaurant suppliers were ordered to shut and people spent more time cooking at home.

“That paid dividends because some aggregators didn’t have enough drivers at the start of the pandemic and were struggling to reach the city centers where some of our restaurants are,” Lipscombe says.

Read:Grubhub’s acquisition by Just Eat creates global restaurant-delivery giant

To ensure they could meet a surge in demand from customers, Lipscombe added 10 new vehicles to his fleet, and scrounged another 10 to 15 from staff, friends and family.

“I even borrowed by mum’s car to do deliveries,” he says. “We did whatever we could to get the job done.”

Controlling his own fleet also allowed the company to effectively manage customers’ orders within a 15-minute time frame. Once a customer phones in an order, the system issues a ticket to ensure that the food is ready at the exact time for pickup.

“If the customer comes [for] 19:00 p.m., the system prints the ticket to warn the chef at 18:45 p.m. so when the customer arrives the food is still hot,” Lipscombe says.

The business was able to circumvent some of the supply issues that have hampered recovery at other restaurants, because it had enough stock of its key frozen lines stored in the coastal seaport town of Grimsby, due to Brexit planning.

Read:U.K. asks consumers to go easy on fish and chips — it’s all about Brexit, with a catch

And with a pared-down menu focused on core items, the business could quickly source the ingredients it needed.

“Because we were so busy, we had to simplify the operation down and make sure that we can provide to all our outlets.”

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Unsurprisingly, the bestselling item has been the nation’s longtime favorite: cod and chips.

The speed at which Lipscombe adapted the business enabled him to open two locations just two weeks after the lockdown. By the end of April — just four weeks after closing down the entire operation — Chesterford was back in business with all 40 stores fully operational. Around 75% of the staff have since been brought back from furlough.

The business, says Lipscombe, has changed permanently and is now positioned for a post-coronavirus future.

“The days of queuing are gone. This is a much better consumer experience. Click-and-collect sales are growing strong,” he says.

Delivery services have tailed off a bit in the past few weeks, which Lipscombe puts down in part to the price differential. “You have to charge more for delivery, and people are looking to save their pennies at the moment with the economy as uncertain as it is,” he says.

Read:McDonald’s reopens drive-through service in the U.K.

But despite help from the government and success stories like Chesterford’s, the outlook for the industry remains bleak.

That is evident from a survey published on June 4 by YPO, the global leadership community of more than 29,000 chief executives, of which Lipscombe is one, to gauge the impact that the global pandemic has had on businesses and chief executive perspectives over the past few weeks.

The survey of 2,718 chief executives across the globe showed a sharp decline in the business confidence of corporate leaders, with more than 40% of CEOs in the hospitality and restaurant sector saying their businesses may not survive the COVID-19 crisis.

“The government has done a lot to help, but it has to do something about supporting rents and provide more clarity about the two-meter [social] distancing rule,” Lipscombe says. “That could make the difference between survival and failure for hundreds of businesses and millions of jobs.”

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