The director and company secretary of the Pacific Restaurant Group (Kingsleys Steak & Crabhouse restaurants, Chophouse and Jamie’s Italian) on lobbying, training and the Moët test
After a year as an army medic, I went into finance. We had a client who had a share in a nightclub. I was the analyst. I fell in love with it. I realised I wanted to be an operator more than a provider of services.
Any operator that does what they want, over what the market wants, is destined to fail. You have to do tonnes of research about what the market wants. In the nightclub, the market wanted it to be less pretentious and more welcoming.
I went to another nightclub, which we sold after three years. Our largest competitor had lost the lease on their place and they wanted to buy. They kept making offers and we couldn’t refuse the last one. I moved to Thailand for a year.
When I came to Australia I answered a job ad. It was in operations, but as soon as I met Kingsley Smith (of Kingsley’s), he realised my expertise was in structuring. We took this company from a bunch of trusts and unit trusts to a public listing. Many would rather get all the tax benefit of being trusts and unit trusts. We wanted to grow.
Number one has to be food quality and service quality. Without that you don’t have anything. Immediate close second is value for money. That doesn’t have to mean inexpensive. We target a certain spend per head. We don’t change that target as time goes by. We change the offering up or down based on cost of goods. Once you get over a certain threshold in spend per head, it becomes too expensive or too cheap.
“Any operator that does what they want, over what the market wants, is destined to fail. In the nightclub, the market wanted it to be less pretentious and more welcoming.” Wes Lambert, Director and Company Secretary, Pacific Restaurant Group
In the United States, hospitality is the number-two industry behind government. Every investment bank has a restaurant capital arm. But here, under the awards, fast food outlets are considered to be retail. Pubs fall into ‘real estate’. So the restaurant industry in Australia is just full-service restaurants, franchised restaurants, caterers and cafes.
We hire internal managers a lot. They’re usually in some kind of internal or external training at least once a quarter. We pay for any training they wish to take. We have three or four people doing their CPAs. In the restaurant, managers are getting their diplomas and Cert IVs in hospitality.
Ultimately, I hope all my managers and my head chefs open their own restaurant. We teach the managers they need to focus on cost of goods sold, and more specifically, contribution margin data.
I teach the managers the Moët test. You give a customer a choice: sell them a bottle of Moët for $99 that should retail for $150, and make $60, and they feel they’ve got great value for money, or sell them a $60 bottle of wine that you make $40 on. Ultimately, the Moët is 45 per cent cost and the other is 33, but you make more money and they feel like they’ve had a better experience.
I went to see Jamie Oliver cook live in Melbourne in March last year. I was lucky enough to get invited to a cocktail event before his live show, met him and was mingling with a lot of people. We’d heard they were looking for potential partners here and in New Zealand. We started a dialogue. We went to the UK in September. Then they came out to look at our business which led to a business development plan for us to launch 14 Jamie’s Italians in Australia and New Zealand.
The industry is a bigger lobby than it thinks it is. The pubs are food and beverage operators. The fast-food giants are food-and-beverage operators. If those entities ever got together, the government would be in huge trouble.