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The group behind the Zizzi and Ask Italian casual dining chains is betting on its less expensive brands to deliver growth, as cash-strapped consumers increasingly choose value for money when dining out.
Azzurri, which is owned by TowerBrook Capital Partners, acquired Irish burrito chain Boojum last year and the main franchise rights in the UK and Ireland for California-based Dave’s Hot Chicken earlier this year, both at undisclosed prices.
Chief executive Steve Holmes said he would expect such fast casual restaurants — where food is freshly prepared but served at a counter — to generate half of group profit by about 2030, because they “hit on that sweet spot of quality, affordability and value”.
Both Dave’s Hot Chicken and Boojum are “high-quality, good value for money and [have] big portion sizes . . . that’s just resonating with consumers at the moment, especially when we’ve come out of the back of a cost of living crisis and people are coping with high inflation”, Holmes told the Financial Times.
He said while he still believed in the growth of casual dining — with two new openings for Zizzi taking it to 138 stores and one new Ask opening giving it 66 outlets in the year to June — “the quick service restaurant section of the market is going to be able to grow more quickly in the future than perhaps full-service casual dining”.
The number of fast food stores in the UK has grown 2.8 per cent in the year to October, while casual dining outlets declined by 4 per cent, according to data provider Meaningful Vision. Chicken shops were the biggest driver of growth with a 7 per cent increase, the research company said, backed by bullish expansions of players such as Wingstop and Popeyes.
Holmes said both the chicken and the Mexican markets in the UK are underpenetrated compared with the US and other countries. He added the company will be rolling out up to 60 Dave’s Hot Chicken sites over the next seven years, following its first opening earlier this month in central London, while reaching about 30 Boojum outlets over the same period, up from the current 17.
His comments came as Azzurri, which also owns Italian food-to-go stores Coco di Mama, more than doubled its ebitda in the year to June to £32.1mn, according to results that will be announced on Wednesday. The company’s revenues increased by 18 per cent to £303.1mn.
Holmes said 2024 has been a “challenging year” for consumers given inflation and the recent Budget but predicted that consumers would feel they were better off next year. “Inflation is not as high as it was in 2024 . . . I think you’ll see them prioritising eating out and social experiences once again,” he said.
The group, which was sold by Bridgepoint in 2020 in a £70mn prepack administration deal, has reorganised itself to allow each of its restaurant brands to be run independently by their own directors. Azzurri as a group helps in areas such as procurement and supply chains to drive profitability.
Located in city centres, Coco di Mama had its “best year of trading since Covid”, benefiting from workers returning to the office, Holmes said. In October it launched a business selling sandwiches in 600 Sainsbury’s shops.
