All posts by Thomas Farrell

The rise and fall of the Little Chef empire (1958 – 2018)

Little Chef was the largest restaurant chain in Britain. At its peak it boasted 433 outlets, but this has since been reduced to around 70.

The first Little Chef restaurant was opened in 1958. Sam Alper (1924 – 2002) and Peter Merchant had been inspired by diner caravans they had seen in America, and introduced the concept to Britain.

Alper had a background in caravan manufacturing, and the first outlets were portable prefabricated roadside snack bars. Outlets could be built, assembled and opened within a matter of hours.

Little Chef was acquired by Trust Houses, a hotel operator, in 1961.

By 1964 Shell-Mex and BP had discovered that opening Little Chef outlets next to its petrol forecourts helped to boost fuel sales.

Outlets began to be built from brick from 1965. The Little Chef brand guaranteed consistency for weary travellers in unfamiliar locations. There were twelve outlets in 1965, and 28 by the end of 1968.

In 1970 Trust Houses was acquired by Forte to form Trust House Forte, a large catering and hotels company. The new owner had the necessary funds necessary to roll out a rapid expansion of Little Chef.

As it was difficult to acquire roadside planning permission, Trust House Forte acquired a large number of existing transport cafes, and converted them to the Little Chef format.

A typical Little Chef meal cost 35p in 1972. It was around this time that the “Fat Charlie” logo was introduced.

Due to rapid expansion there were 174 outlets by 1976. Ten years later there were 250 outlets. Little Chef was the largest restaurant chain in Britain by 1986, with more outlets than Berni Inn.

In 1986 the Competition Commission found that a significant proportion of customers were locals, not commuting drivers. Little Chef was innovative and forward-thinking, providing high chairs and baby food when most British restaurateurs regarded children as irritants rather than potential customers. Meanwhile, strict roadside planning laws preventing new buildings effectively worked to maintain the company’s monopoly.

Trust House Forte acquired Happy Eater, Little Chef’s only major rival with 90 outlets, in 1986.

Little Chef was acquired by Granada, an operator of motorway service stations, in 1996. Granada hiked prices, charging £7.95 for a full English breakfast in 1996! The high prices did not guarantee quality: even the omelettes were frozen and then reheated.

Granada described Little Chef in 1996 as “tired and neglected”. Management Today described the chain in 1997 as “perhaps the most neglected part of the old Forte empire”.

Under Granada the total number of restaurants expanded to 433 (68 of which were Happy Eater outlets) by 1999.  Granada also began to franchise Burger King in some of their existing outlets. Upon conversion, Burger King outlets would see double the turnover of former Little Chefs.

In 2002 Little Chef was serving 30 million people a year.

Little Chef was the first branded roadside restaurant chain in Britain, and had few competitors until the motorway service stations began to improve exponentially in the mid 2000s. They now offer a range of desirable high street brands such as Burger King, W H Smith and M&S Simply Food. Meanwhile McDonald’s have vastly extended their drive-thru presence and offer faster service and lower prices.

In 2013, a Kuwaiti private equity conglomerate acquired the company. In 2014 there were only 72 outlets.

The remaining outlets were sold to Euro Garages in 2017. Euro Garages lost the rights to the Little Chef brand after one year, and all remaining outlets were converted to the EG Diner fascia.

Greggs in central London

Gregg’s is nationwide British bakery chain. Why are there so few Greggs outlets in central London?

There’s certainly no shortage of commuters looking for lunch, or tourists looking for a quick snack. McDonald’s, EAT, Pret and Starbucks all maintain a strong presence.

Living in the provinces, I have always been impressed by the sheer quantity of Greggs outlets. In central Leeds and Newcastle, large cities, one never need be more than one minute’s walk away from a steak bake or sausage roll.

So why so few outlets in central London? Yes, the chain has northern origins, but that didn’t hinder McDonald’s or Starbucks, with origins even further afield.

The chain is essentially a fast food retailer: largely calorific products served quickly and cheaply. And Burger King, KFC and McDonald’s are very successful in the capital. People clearly aren’t afraid of unhealthy food.

Is the rent too high to make the low cost retailer profitable? Greggs outlets have very limited seating, so I hardly see how this could be an insurmountable problem. In Bread: The Story of Greggs, Ian Gregg, the former chairman of the company, states that before the 2008 economic crash, rivals were overpaying for sites in central London. But if that is indeed the case, then what has prevented the chain from expanding in the area since the economic crash, now that rents are lower?

Lets look at the individual USPs of its rivals. McDonald’s offers seating, Starbucks offers comfortable surroundings, Pret offers speciality coffee. The Greggs proposition can actually be fulfilled through small supermarket concessions. In actuality, many small supermarkets in central London already offer a hot pasty/sausage roll selection. How does Greggs improve on their rival? Well the Greggs product will be fresher, as they bake their food throughout the day. So freshness, convenience and price are the USPs that need to be drawn upon. Greggs also needs to smarten up its existing central London outlets in order to place distance between itself and its reputation as downmarket junk food.

The marketing of Lea & Perrins

There are two key marketing strategies at work behind the almost mythic reputation of Lea & Perrins’ Worcestershire sauce.

1.) the “secret” recipe The website states that there is a secret recipe, known only to a “privileged few”. Heck, if the secret recipe tactic works for Coca-Cola and KFC, why not us? But the truth is, *every* corporate recipe is a secret. You don’t know the recipe for Walker’s Roast Beef crisps or Knorr’s Chicken Seasoning, do you?

So one of the products major differentials is hardly a differential at all. Okay, I hear you say, we don’t know what Worcestershire sauce is! Well that’s hardly a secret. In fact, the company have been quite open that the sauce is principally vinegar and a soy sauce substitute (acid-hydrolyzed vegetable protein). Also included are salted anchovies, tamarinds, chillies, shallots, garlic, onions, ginger, molasses, sugar, cloves and “various fruits”.

2.) the idea of “craft”, small-scale, “vintage” traditional production. There is no reason to assume that the methods are more traditional than anywhere else. For example, the ingredients are no longer matured in wooden barrels: plastic and metal containers have taken over. It’s hard to see it as a craft product when it’s just vinegar and soy sauce with some crazy ingredients thrown in for good measure. Although I do love it with chilli con carne… And in the US, it still comes wrapped in paper, as it has been since the 1850s. Although the paper is no longer necessary to avoid bottle breakages, the tradition has endured. It gives the original Worcestershire Sauce a USP. Understand that I don’t mean to do down the marketing tactics behind Lea & Perrins’ famous product. In fact, I think it’s all the more impressive that tried and tested marketing techniques have been utilised so effectively without losing its sense of authenticity or becoming a “me too” brand.

The rise of “craft”

The notion of craft and premium quality food and drink did not arise from the ether. In this post I attempt to trace its roots in recent history.

With the end of post-war rationing in Britain, a range of super-premium restaurants with a focus on local provenance opened in the North West of England. Beginning with Sharrow Bay in 1960, they catered to a very small segment of the population, but their growth indicated a desire for authentic, quality food.

In the 1970s the British public were enamoured with the wave of packaged and processed products: Watney’s Red Barrel ale, yoghurt, frozen food etc. They were expensive, but people were prepared to pay a premium for it because it was new, and perceived as “better”.

The late 1970s and 1980s saw the growth of the real ale movement, which advocated small scale production, locality and traditional production methods. But the provenance doesn’t even have to be your localness: just provenance in general seems to suffice. One had only to witness the growth of Whitbread’s Stella Artois in the 1980s and 90s, a beer marketed with French language advertisements, despite being brewed in the UK, and with origins in Flemish speaking Belgium.

Another interesting example is Jack Daniel’s whisky. With a monochrome label and adverts, the product was able to successfully foster a small scale image, “craft” image. This consumer “backlash”, as it were, stems from a new-found consumer cynicism. The consumer knows that most products they buy in their supermarket are owned by multi-national conglomerates. Many people do not like giving their money to perceived faceless corporate entities. Any product that seems to defeat or circumnavigate this system, and treat the consumer like an adult, seems to be on to a winner. People will pay far more than net worth for a perceived craft product because it makes them feel good for two reasons: supporting local or craft production, and avoiding the multinationals. I don’t think this applies to the whole population, but I think it applies to a good number.

The examples are endless, but I will give just one more: Yorkshire Tea. The name “Yorkshire” implies traditional craft methods and localness. The name isn’t faceless and bland like competitor brands PG Tips and Tetley Tea. The brand wears its provenance proudly, and isn’t ashamed of its local origins. The brand came from nowhere in the 1990s to becoming the third highest selling tea brand in the country by 2007. It wasn’t until 2000 that it became a nationwide supermarket staple. The brand has a surprisingly modern heritage: I doubt that many of its consumer base would estimate that the brand was only launched in 1977. Meanwhile rival brands such as PG and Tetley patronised the audience with television adverts that starred cartoon characters, chimpanzees and monkey hand puppets. The consumer goods advertising market has matured. Treating consumers like idiots works far less well than it used to. Consumers appreciate being treated like human beings.

The premium/provenance market shows little sign of slowing. Borough Market in London is now firmly established as a destination for quality food with provenance. The celebrity chefs have long promoted locality and quality. Farm shops are now ubiquitous in many English villages.

Craft brands need to be careful to maintain their image. Stella Artois sold for the same price as other premium lagers, despite its slogan of “Reassuringly expensive”. Consumers get wise to a brand that seems inauthentic, and it irritates them as an insult to their intelligence. Stella is now, frankly, a commodity lager, and its premium positioning has largely been given over to the Italian Peroni brand, which had spread largely through word of mouth.