From a shareholder’s perspective (and I am one of these), last week was an exciting one, when a bid was made for the company, and therefore sending the share price up nicely. However, I hope the current bid will not be successful as the chain is doing very nicely under the current unostentatious management, and I would like to see a few more years of the continuing careful expansion.
The careful stewardship of the present team has steered its growth towards just 5 new openings per year, a factor which seems to have bored and frustrated the city boys: it has been virtually unmentioned in the financial press for the last couple of years, after having been the most promising AIM newcomer.
But now this slow and steady approach has paid dividends (and they do pay these too!), the company has no debt, a solid systems structure, and is attractive fodder for a private equity acquisition.
Not surprising really. Carluccio’s has the ideal model to survive straitened times: £12 per head is the average spend; it trades all day, 7 days a week. It manages to combine the right amount of Italianness with modern-style London. In common with restaurants in Italy, children are very much welcome. Saturdays and Sundays are full of families with children absorbed in their crayonning packs. The decor is stylish and vibrant, and the (mostly) Italian staff are welcoming and feel proprietorial about their particular branch, as if it was a standalone independent.
The menu does not change often – good for consistency of quality from a staff training perspective – and there are probably just enough specials to avoid fatigue for regular customers. The cafes have an easy, undemanding relaxed ambience.
The financial pages may be commenting with approval at the moment, but Carluccio’s has sometimes had an uneasy relationship with the press in general. Last summer it attracted a lot of attention about not paying the minimum wage (in common with some other chains like Strada trading at the same price level).
The real story is as follows: Yes, technically the staff get paid a basic rate which is under the minimum wage, BUT they get all the service from the tables on their particular shift, and end up with an average of £8 an hour. If the session is quiet, the hourly rate is topped up by the management to the minimum rate. In Carluccio’s there is no 10% service charge levied on the bill (“optional” or otherwise), so whether to tip and how much is truly optional. All the service from credit card payments are paid to the employees via PAYE, so the management will pay employer’s national insurance contributions on these amounts. Any cash left for the waiting staff is personally taken by the waiter.
Most of the staff like this system. Other restaurants may pay the minimum rate or more, but keep the lion’s share of the service charge. Carluccio’s system means that the staff benefit directly from their efforts, and the good ones do particularly well. The proof of the pudding is in the eating: the staff retention is high. So, if the staff are happy, why do some of the Press feel they have to champion a cause on their behalf? I suspect it’s just easy copy, but also an easy one to misreport.