What's next for Nando's?
Peri peri chicken existed before Nando’s but you’d be forgiven for not knowing that. The saucy poultry dish has become so ingrained with the Portuguese-South African brand that the terms have become virtually synonymous.
It’s the kind of brand awareness that most companies can only dream of, and for Nando’s new managing director George Kunnappally it meant he had a personal connection with the brand long before he joined.
“I’ve been a customer for a decade-and-a-half,” he tells us. “It’s a once in a lifetime opportunity to work for a brand that I’ve been in love with as a customer.”
For the F&B exec who has formerly worked with brands such as Johnny Rockets and Subway, coming into a successful enterprise like Nando’s marks a change of pace from what Kunnappally is used to.
He says: “It’s heartening to know you’ve joined a brand that’s already doing very well and you’re hoping you can take it to a better level. I’ve had assignments where it was crisis management from day one to the day you left where you are purely fighting fires.
“Here it’s very different because the brand is already established, the brand is successful, the brand is loved, so you can focus on how to better things, not how to purely fix things.”
For Kunnappally that means trying to extend Nando’s reach to an even wider audience. While the brand is well-loved by western expats, particularly among the 18-30 crowd, the MD hopes to bring in more customers from the east, saying: “We are probably more frequented by western expats than Asian expats. We would like to balance that out where the Asian community or UAE national community would dine with us twice a month rather than once a month. That’s something we are focused on in terms of our marketing campaign.”
Kunnappally also lets us in on stats from a recent brand health study report which showed that Nando’s attracts more women than men as customers, but this is not replicated when it comes to staff figures, something he is keen to remedy.
At the moment, he tells us, Nando’s employs fewer than 20% women in its workforce, although the number is higher at corporate level. Kunnappally is hopeful of raising it to 30-40% as soon as possible.
“We are prioritising hiring more women in the workplace, whether it is in the front-of-house or back-of-house, we believe that that’s something we need to emphasise as part of our values.
“At the head office level we are extremely proud that many of our key functions are headed by women. Marketing is headed by a lady, operations is headed by a lady, human resources is headed by a lady. We need to achieve that balance in our restaurants.”
While Kunnappally is doing his best to address the gender gap, he also has to turn his attention to more pressing matters. As it is for many operators, occupancy cost is the biggest challenge Nando’s faces. Despite its long-term presence in the market, Kunnappally says Nando’s still does not feel that it has the required support from landlords and “occupancy cost remains one of the key make or break elements in terms of unit economics and profitability and sustainability of the business”.
While some landlords have played ball in terms of adjusting costs in a challenging market, Kunnappally says “certain landlords still hold on to high rentals per square feet based on demand/supply and it becomes difficult to keep businesses sustainable when your rent to sales ratio crosses 15%”.
Accepting that it’s not just a Dubai or Abu Dhabi issue but one that’s affecting the whole region, Kunnappally calls upon landlords to “be reasonable and bring down rents to 10-15%”.
He says: “If they wholeheartedly support serious operators the way the government is supporting us, it would be a welcome change. Because we are serious operators, this is the only business we do, and we are passionate about it.
“We want to grow and build the business, provide more employment, reach out to more people, and we will require serious support from landlords and mall management.”
To get that support Kunnappally believes that it's vital operators maintain constant engagement with property owners. He cites events such as the Global Restaurant Investment Forum and GulfHost as places where the two can meet up to share ideas and express their concerns, and he's optimistic it is having an effect.
He says: “I believe there is a general understanding that this is a serious problem which has to be tackled. It needs to follow western models in more mature markets. The UAE is moving towards how mature markets perform and we should take that leadership and become more equitable or a partnership rather than a landlord/tenant relationship.”
Other than occupancy costs, Kunnappally cites the supply chain as the main challenge facing Nando’s as we move into 2019. As an almost sole-product brand, Kunnappally admits that if an outlet was to run out of chicken it would “basically lead to closing down the store”. To ensure that doesn’t happen, the team coordinate constantly with distributors and franchisers to guarantee continuous supply, which Kunnappally calls “a big exercise”.
But with the full backing of his Nando’s team and the drive to continue the brand’s success in the UAE, Kunnappally is confident he can take the “brand to the next level” with a new lunch menu and expanding its availability across delivery aggregator platforms key to the future of the company.