01Half year statement 2011Contents01PizzaExpress 04 Zizzi 08 ASK 11 BYRON 14 Kettner’s 16Chairman’s statement 02Gondola at a glance 03Operational review 04PizzaExpress 04Zizzi 08ASK 11BYRON 14Kettner’s 16
C1Half year statement 2011Chairman’s statement02“Gondola’s performance in H1 ofour financial year has been verypleasing against a backdrop ofchallenging economic conditions.”Our brands continue to demonstrate outstanding profitabilityand trading momentum versus the market as a whole.In today’s environment, customers are looking for value,and within this a highly enjoyable way to spend theirprecious leisure time. We remain passionately focused onproviding both and we believe that as our brands evolvetheir individual customer propositions, we will continue tolead the way in all aspects of the casual dining sector.It was disappointing that the key Christmas trading periodwas impacted by unusually heavy and sustained snowfallover a number of weeks, coming at the most important pointin the build up of seasonal trade. That said, our teams copedadmirably in difficult conditions to ensure that as manycustomers as possible were still able to enjoy their plans.Since then, H2 has started with steady trading but we remaincautious about consumer demand. Consequently, we see theoutlook for the balance of this financial year as likely to bechallenging, with spending remaining under pressure.Despite fragile consumer confidence, we are in a strongposition, and with an objective of longer-term growth,we are seeking to capitalise on this by maintaining ourambitious roll-out plans. We have opened 19 restaurants inH1 and we are on track to open over 40 by year end. Thislevel of investment, together with our extensive programmeof refurbishments and transformations, is an indication ofour overall confidence in the prospects for our business.As always, thanks must go to our loyal and hard-workingemployees who are critical to our customers’ enjoymentand thereby our continued success.Chris WoodhouseChairman
02Gondola at a glanceOutstanding brands03The Gondola Group is the market leader in theUK casual dining sector, operating PizzaExpress,Zizzi and ASK, together with the smaller brandsof Milano (PizzaExpress’ brand in Ireland), BYRONand Kettner’s. The Group employs approximately16,500 people, serving over 40 million meals ayear in over 600 restaurants.Gondola’s restaurants are positioned to offer agreat eating out experience and exceptionalvalue for money, with typical spend per head(including value added tax) ranging from£14 to £18. Gondola’s distinct brands have broadappeal and lend themselves to different occasions.Its estate of restaurants trade successfully in avariety of location types, from high street andlocal neighbourhoods, to shopping centres andretail and leisure parks.Our strategyGondola has always maintained a simple strategy to:• deliver growth in profits from the existing estate– we focus on ‘restaurant basics’ to deliver quality and value to our customers– we are using increasingly sophisticated marketing techniques to engage with our customers– we proactively manage our cost base and working capital to maintain or improve marginsand maximise cash flow• expand the estate through the roll-out of our key brands– we have maintained strong momentum in our openings programme despite the economic backdrop• develop other growth opportunities, including new concepts and other revenue streams– the emerging BYRON business is a great examplePizzaExpressZizziASKBYRONKettner’sWith its roots in Soho and jazz, thisiconic brand was founded by apassionate foodie way back in 1965,and has been pioneering casualdining on the high street ever sinceAn Italian restaurant with strongpersonality, often a place for specialoccasions, and in the process of atransformation to an exciting newbrand identityEstablished in 1993 as the first Italianrestaurant brand in the UK, ASKoffers customers great Italian foodin stylish contemporary settingsThe emerging brand that isfanatical about its simple, superbquality hamburgers, ‘the waythey should be’Iconic Soho champagnebar and restaurant384 +9Restaurants New this half year£14Average spendper head114 +5Restaurants New this half year£18Average spendper head125 +2Restaurants New this half year£17Average spendper head12 +3Restaurants New this half year£16Average spendper head£33Average spendper head(restaurant)
04Operational reviewPizzaExpress05Crowd-sourcing in the kitchenFor the first time, we used ‘crowd-sourcing’ to discoverthe nation’s next top pizza. In July, we launched ‘TheCreate Your Pizza Challenge’, asking customers fortheir favourite pizza recipes, encouraging entries byoffering the winner £5,000 and a place on our menu.53,000 people entered, including teen sensationNick Jonas, X-Factor singer Lucie Jones, entrepreneurLevi Roots and the Women’s Institute. A judging panel,led by The Sunday Times food writer Lucas Hollwegand Francesco Mazzei of the acclaimed restaurantL’Anima, decided on a five-strong shortlist. 60,000people then voted for their favourite, and the winningpizza, ‘Da Morire Pizza’ – meaning ‘Pizza to die for’– is now on the menu across all 384 restaurants. Intandem, we ran a competition internally asking ouremployees for their pizza recipes. The winning pizzafrom this competition, the Monte Bianco created bypizzaiolo Mariann at Stratford East, also went on themenu in January 2011.Below:Winner of ‘The Create Your Pizza Challenge’Our peopleThe business continues to be a people-strong culture.Most recently we created an award-winning recruitmentwebsite that has proved to be engaging and accessible toprospective team members. Programmes like this havehelped us maintain our industry-leading retention figuresby focusing on recruiting and developing individualswho are passionate about the brand and our customers.New openingsWe’ve continued to open beautiful new restaurantsacross the estate alongside our ongoing refurbishmentprogramme. A clear openings process and dedicatedteam resource have enabled us to consistently deliverstrong returns which are sustained.Bury (Rock Place)Bath (Southgate Centre)London (Herne Hill)Leeds (Headingley)Basingstoke (Festival Place)Manchester (Oxford Street)Liverpool (Victoria Street)Ennis (O’Connell Street)Stockport (Bramhall)Keeping innovation alive at the heart ofthe businessLast autumn we took one of our restaurants and turnedit into a ‘living lab’, a perfect space to try out new waysof doing things, looking at just about every aspect ofthe restaurant experience from design and service tofood and music.To do this we worked with talented creatives includingaward-winning designer Ab Rogers and Italian acousticianSergio Luzzi, who looked at redefining the restaurantspace and how we manage sound better on the high street.This resulted in a pioneering design that reducedunwanted noise by half, as verified by BBC 2’s See Hear,who road-tested the acoustics in the ‘living lab’ andreported that the decibel level had been significantlyreduced, making the restaurant half as noisy.New openingsWe’ve continued to openbeautiful new restaurants acrossthe estate alongside our ongoingrefurbishment programme. A clearopenings process and dedicatedteam resource have enabled us toconsistently deliver strong returnswhich are sustained.New thishalf year+9
04Operational reviewPizzaExpress06One of the ways we experimented with how wemanage and motivate our teams was to revisit howwe recruit, train and reward our people. We workedwith Karl James, a conversation expert, to help ourteams bring their personalities to work, and withCarrie Longton, co-founder of Mumsnet and aparenting expert, who helped us create a servicetreaty for adults dining out with children.Over the next few months we will be taking thenew elements that have worked well in the ‘livinglab’, modifying them so that they become scalable,then trialling them in other PizzaExpress restaurantsto see how they perform.Strong brand healthWe have continued to build the brand through digital,social media and external communications. Activitieslike our Create Your Pizza Campaign and our weeklyItalian Lessons on Twitter have helped substantially toincrease the number of followers in these channels andkeep positive word of mouth about the brand high.Our promotional and partnership strategy continues topioneer new ways of engaging customers, supported bythe development of increasingly sophisticated marketingand technological approaches.Beyond our restaurantsOur supermarket pizzas continued to lead the chilledpizza market achieving double digit sales growth.Over the summer we launched our first fully integratedmarketing campaign across retail and restaurant, heroingone of our signature ingredients, our tomato sauce.Supporting our communitiesIn September, Fairbridge became our ‘Charity of theYear’. Together we’re supporting young disadvantagedpeople between the ages of 13-25 to develop theconfidence, motivation and skills they need to turntheir lives around. During our year together we aimto help many young people through local fundraisingevents in our restaurants alongside donating 25p fromevery Etna pizza sold.For our Christmas Charity Appeal we teamed up withOxfam and raised £285,000, helping approximately57,000 people around the world who are living inpoverty. The six-week fundraising campaign gavecustomers an opportunity to satisfy both thecelebratory and the caring sides of Christmas in onego. It encouraged people to shop in Oxfam stores andon Oxfam online and rewarded people who spent£5 or more in Oxfam with a £5 PizzaExpress voucher.There was also a donation from sales of Christmasmenus and the Padana pizza over the festive period.Designer and Queen of Colour, Zandra Rhodes,also supported the campaign by raising funds throughsales of her exclusively designed, limited editioncampaign t-shirt.
Operational reviewPizzaExpress07We continue to focus on our environmental impact,changing the everyday habits of each of our restaurantteams. Various initiatives are in hand, addressing energysaving and recycling. Our biggest energy use is in airconditioning units and ovens, but our energy savingmeasures have covered everything from installation ofnew, more efficient, Dyson hand driers to changing ourdigital music systems to run off our office PCs ratherthan dedicated systems.The brand continues its long-term support of theVenice in Peril charity, which was set up to help therestoration of Venice. And the PizzaExpress SchoolProgramme, developed in association with EducationBusiness Partnerships, continues to engage primaryschool children across the country.InternationalIn September we bought back the InternationalFranchise business. This consists of approximately50 sites of PizzaExpress and Pizza Marzano brandedrestaurants in 12 territories including China, Europe,Hong Kong, Japan and the Middle East. Since then wehave been working closely with the franchisees to helpthem reach their growth plans.Looking aheadPizzaExpress is in a strong position going into H2.We remain focused on growing our existing estatevia world class restaurant basics, continuing our strongpipeline of profitable new openings and building ourretail business. We have robust plans for the next12 months and in particular we will continue todevelop new marketing capabilities, especially aroundcustomer understanding and promotional activityprogramming, whilst tapping into our customers’deep-rooted affection for the PizzaExpress brand
05Operational reviewZizzi08XX Transformationwell underway.
06Operational reviewZizzi09TransformationsIn H1, Zizzi opened a further five stunning newrestaurants in primary locations across the UK. This,coupled with seven transformations, contributed to astrong start to the new financial year. Despite a muchmore challenging trading environment, Zizzi has heldits own and continues to perform well, particularly inthe new and refurbished restaurants. The revitalisedbrand proposition is clearly resonating with customersand we are becoming increasingly confident that wenow have a well defined and differentiated experienceto offer.New openingsGlasgow (West End)PinnerInvernessLondon (One New Change)London (St. Giles Plaza)TransformationsIn H1, Zizzi opened a furtherfive stunning new restaurantsin primary locations across theUK. This, coupled with seventransformations, contributedto a strong start to the newfinancial year.Each new restaurant is supported by an aspiring talent.In the case of Glasgow, West End, we collaboratedwith four young graduates from the Glasgow Schoolof Art who only started on their illustrations once therestaurant opened its doors to the public. This idea,Tela Vota (Italian for blank canvass) captured theimagination of diners and media alike and therestaurant not only looks incredible but has alsobecome a local talking point. In Inverness we workedwith a ‘writer in residence’ and at St. Giles, a youngceramicist worked on the spectacular white tree, thecentrepiece of the restaurant. Another developmentwas the introduction of ‘Sessions at Zizzi’, a showcasefor aspiring musicians. Our restaurant at St. GilesPlaza proved to be the perfect central London location,being close to the heartland of jazz in the city, and thisis now a regular feature.Fresh talent and menu innovationOur fresh talent programme continues to inspire andattract great publicity. An exciting new developmentis how this ambition has extended to our menuinnovation. Kitty Travers, a young artisan ice creammaker, has created a range of all natural Gelato usingmilk and cream sourced exclusively from an organicdairy co-operative in Wales. The Italian-inspired rangeis proving to be really popular and by working with us,Kitty has been able to apply her considerable talents,previously only enjoyed through her homemade gelatosold at farmers’ markets, to full-scale production. Ourcollaboration has also provided a sustainable solution forthe organic dairy farm, Calon Wen in Carmarthenshire.New thishalf year+5
08Operational reviewASK12A new propositionIt has been an exciting H1 for ASK as we havegrowing confidence and clarity behind our newcustomer proposition, which is now present in seventransformed sites and two new sites. Driven by a brandvision to become ‘Italian Lovers’ by caring obsessivelyabout every detail of the restaurant and executingthat vision in a fresh, bold, genuine way, the newproposition transforms all aspects of the restaurant.The new menu reflects a range of contemporaryand classic dishes with an emphasis on really fresh,authentic ingredients prepared with pride and passion.The restaurant interiors, inspired by Milanese design,are simple, stylish and individual with bright confidentcolours and warm wood finishes. Great importanceis placed on motivating our people in order to havehappy restaurant teams that are excited about ourfood and vision. They are encouraged to deliver aservice style that is friendly and efficient, bringingtheir personalities to work.Rolling out the new propositionBehind this growing confidence, key elements ofthe proposition will be introduced across the estatein H2 – the new menu, key pieces of furniture andsmall wares. In addition, six more restaurants will becompletely transformed by the end of the financial year.Already in restaurantsIn September, we introduced ‘Amici’, our new serviceproposition, into all of our restaurants, a warm friendlyservice style that is natural and genuine – very differentfrom traditional robotic steps of service. We aretracking our progress through a new Mystery Dinerreport and have made significant step changes since itsintroduction. Coupled with delivering Amici we rolledout a new personality-based approach to recruitment.A phased roll-out of the menu starts with the launch ofour new pastas in March. New dishes include Linguinealla Genovese and Ravioli Marittimo, made withcrayfish, crab and poached salmon. The launch willbe supported by fresh new creative and promotionalmaterials across integrated media.Building our core businessThe core estate has been supported by an ongoingprogramme of activities both inside and outsiderestaurants. Our rotating specials menu has showcasedsome fantastic Italian favourites, as have our seasonaland weekend set menus. Externally we continue toexecute a variety of promotional campaigns primarilyvia our database (now over one million people).Helping othersWe continued our partnership with Great OrmondStreet Hospital, generating donations from sales of ourCelebrity Cook book as well as from sales of Celebritypasta dishes on our specials menu. Over £175,000 hasbeen raised to date which has helped fund a new wardkitchen at the hospital. Team members from restaurantsthat sold the most celebrity pasta books, won theopportunity to join in the fun at the Great OrmondStreet Hospital Christmas party together with over2,000 children and parents.Growingthe familyWe have successfully opened twonew ASK Italian restaurants inthe first half of the financial year– Solihull and Dorking. Upcomingplans include new restaurants inBolton, Norwich and Horsham.New thishalf year+2
Operational reviewASK13Growing the familyWe have successfully opened two new ASK Italianrestaurants in the first half of the financial year –Solihull and Dorking. Upcoming plans include newrestaurants in Bolton, Norwich and Horsham.Next stepsIt is an exciting time for ASK, as we continue toexpand our proposition across other areas of themenu (wine, kids, hot drinks), develop even greaterpersonality to our brand identity via our in-restaurantand marketing communication, and build strongerrelationships with our customers via new and existingmedia. In addition we continue to recruit, train andengage our teams in meaningful ways that reinforce ourpassion for food and develop a culture of ‘Italian Lovers’across the business
09Operational reviewBYRON14XX BYRON – the way ahamburger restaurantshould be.
10Operational reviewBYRON15BYRON continued its rapid expansion in H1,successfully opening three London restaurants at OldBrompton Road, Cheapside and Earl’s Court Roadbringing its total estate to 12. The brand continues towin critical and popular acclaim for its individualapproach to restaurant design and launch marketing,which includes use of social media and databasemarketing.Work continued on developing the brand positioningand personality which resulted in a successful test ofnew signage, website, menus and associated materials,which will now be rolled out to the whole estate.Our mobile hamburger unit (The Shack) completedits first season, serving proper hamburgers at festivals,street parties and private events – proving to be aninnovative vehicle for raising brand awareness andcommunicating our values, whether in a field on theIsle of Wight or the car park of a London pub.In November, we partnered with the moustachegrowingcharity Movember to raise money for prostatecancer, introducing a reward scheme for fundraisers anda hamburger special from which we donated proceeds.Over 1,500 Movember fundraisers participated in thescheme, helping to raise awareness and funds. BYRONraised £25,000 for this worthwhile charity.Our continued success relies on developing andmaintaining robust processes to deliver operationalexcellence as the business grows. Programmesto maintain and improve food quality, serviceexcellence and team recruitment and developmentwere all introduced during the period, which we willcontinue to refine and evolve in the coming months.The future for BYRON is exciting. Our energy willbe focused on continuing to grow the business at a pace,establishing this young, energetic and ambitious brandon the high streetExpansionBYRON continued its rapidexpansion in H1, successfullyopening three London restaurantsat Old Brompton Road, Cheapsideand Earl’s Court Road bringing itstotal estate to 12.New thishalf year+3
11Operational reviewKettner’s16XX A ‘Grande Dame’of Soho dining.
12Operational reviewKettner’s17Kettner’s has been a house of aristocratic indulgencesof all kinds since 1867 and now we can all enjoy itsunique offering. Its three core businesses – thechampagne bar, brasserie and function rooms – haveall continued to perform well with record sales overthe Christmas period.The function rooms continue to grow from strengthto strength, attracting corporate functions for media,beauty and professional services companies togetherwith private parties and wedding receptionsGrande DameKettner’s has been a houseof aristocratic indulgencesof all kinds since 1867.Record salesover theChristmas period
Gondola Group LimitedFifth Floor, 2 Balcombe StreetLondon NW1 6NWwww.gondolagroup.co.ukDesigned and produced by Further