LOKE Seminar with City Pub Group and Comptoir Libanais

A few weeks ago, we were thrilled to host Toby Smith, City Pub Group's Chief Operating Officer and Michael Toon, Comptoir Group's Financial Director at the LOKE Seminar on the occasion of “Restaurant & Takeaway Innovation Expo” in London.

Hosted by Rachel, LOKE's Head of Growth, our two customers together with our co-Founder Matt Khoury discussed a very timely topic: how to fuel growth in a challenging environment, post COVID, addressing the role of technology.

Rachel: Hi and welcome everyone. Before we kick-off, could I please ask our speakers to introduce themselves?

Toby: Afternoon, everybody. I'm Toby Smith, I'm Chief Operating Officer of the City Pub Group PLC. We are an operator of 46 managed Pubs in London and Cathedral cities with another four that are on site in development at the moment.

Michael: Hi everybody, I'm Michael Toon at the Comptoir Group. We are the biggest Lebanese offering in the country. We have 17 Comptoirs and we also operate two “Shawas”. Excuse my midlands accent. That's Shawarma, which is our quick service offer, and something we're really excited about. We have 22 in all, and we also have 4 franchises, which we are also expanding as we speak.

Matt: Comptoir has the most amazing food! Hi everyone, I am Matt Khoury, the founder of LOKE. We are a global tech company that digitally transforms hospitality businesses and helps them improve the customer experience and drive more revenue.

Rachel: Amazing, thanks everyone. I want to kick off with a question for both Toby and Michael. Your two brands are very distinctive. What would you say your unique selling proposition is in the market?

Toby: Our businesses are independent pubs. They aren't part of one single brand. They each are very individual, and we try really hard to keep them looking and feeling individual; we're not trying to do a cookie cutter approach. And they're all different shapes and sizes. We've got 9 hotels within the group as well. And we're also probably slightly different to some pub companies in that we actually own quite a lot of the free holds of the businesses we operate.

Michael: I've worked in a lot of branded restaurants, and I can honestly say Comptoir is quite different. To use one of Toby's words here, we're not using a cookie cutter approach either. We really use bold colours. The food is fresh and healthy. We create our own food at our central production unit. We spice our own meats and create our hummus; the quality is really in our hands. If you go into a Comptoir, the word “bold” will be everywhere. In each Comptoir you'll see different tiles directly imported from Morocco, lighting, and pictures in each one. We want to make it as unique as possible for our customers. 

Rachel: Two very unique and truly distinctive brands. And I think it's impossible to have this discussion without acknowledging the thread between all three speakers today: City Pub Group and Comptoir are both using LOKE's technology. So Matt, I'm keen to learn from you. What would you say you enjoy the most about working with Toby's and Michael's companies?

Matt: Good question. They're very different organisations and obviously two leaders in the hospitality space. Toby with City Pub Group, which is a publicly listed company, is run extremely well. From my experience firsthand, they are the most progressive brand that I've been able to work with. Their vision around how to improve and implement new processes, especially around technology are second to none. The Comptoir brand is equally impeccable. They connect with their customers on another level. Everyone knows who they are, how bold they are. And they've been able to essentially create a club following to their brand. According to me, the most important thing is being able to take that customer experience and leveraging it to the next step.

Rachel: Marvelous. And I think this leads onto a question for Toby as well, obviously the environment itself has been so unreliable over the past two years. So how have your growth plans changed pre and post COVID?

Toby: The business IPOed in 2017. Not that long ago. It was only founded in 2012. We've got a 10-year run anniversary in March next year and we're looking forward to celebrating that! When the business IPOed in 2017, we had 33 Pubs. The vision was to double the size of the business at that point over a determined period of time. COVID paused things up for 18 months. We opened some of the businesses back in April, just with the gardens. The full estate didn't reopen until June. But now that the full estate is open, we've started on the acquisition trail again. So, we've actually acquired four sites since we've reopened and that will continue.

Our latest working plan really is to get to a hundred sites. We will be at 50 sites by the end of the quarter one next year with the sites that we have just bought. And then we're looking to get to a hundred sites. I guess the benefit of being a listed company is that your funding structure is very different. It's not all coming out of one pocket, we're able to release equity into the market to be able to acquire new sites. And we just need to be disciplined in our acquisitions of buying the right things that can fit into our organization. The one thing we haven't done is said, we are going to be at a hundred sites by 2024 or a certain timeframe. But there's certainly an aspiration for us to grow at a steady pace and that plan is starting to come through now.

That being said, there isn't a lot of available stock on the market. For those who follow the COVID rules, there is obviously still a rent moratorium on. There are many businesses that are continuing under their current lease. Any of these premises, for example, are not necessarily finding their way to the market. And the big operators, freehold and public estates have held onto their estate. Greene King, Stonegate Group and Mitchells & Butlers for example haven't sold any properties off. Whilst I think we're active, the market is not, and it's not been a rush with the opportunities at the moment. We just have to be careful and get the right one.

Rachel: Phenomenal growth. And on the subject of growth as well Michael, what kind of funding have you sought in the current economy to kind of fund your aspirations?

Michael: Very much the same, we're a listed company as well. We have that option there if we get to the point where we want to go for rapid expansion, we can go to the market to raise funds if we so desire. However, we are very lucky to have our own strong organic cashflow, and at the moment, all growth will come from that route. We have got a fantastic banking partner who has been with us for a decade or so and is very supportive. We've come out of COVID in a very strong position. And similarly, we are looking to expand, but we seem to be the same as City Pub: we're not finding many sites being thrown at us. We still have to go through the same rigor we would any other time and be sure they’re exactly right for our brand. Comptoirs are very different to our QSR offering. So, we’re on the lookout for sites, but we'll be doing it organically, self-funded for the foreseeable future.

Rachel: Fantastic. And is that a decision that's been impacted by COVID?

Michael: I think even before COVID the decision was taken to be a little bit prudent. We floated in 2016, went on quite a record expansion. COVID did of course mean a bit of contraction and we did lose some sites. But we're very conscious that we made the right decisions and going forward it's even more important that those sites make the return that we want.

Rachel: Thanks Michael. And Matt has obviously sung his praises about both of your businesses, respectively. I think myself and the audience would be keen to understand how you have benefited during COVID and beyond from implementing technology such as LOKE's?

Michael: When I joined over a year ago, LOKE was one of the first things that Comptoir was doing post COVID. Obviously like a lot of people we had been totally shut down and it was a chance to look at the business and assess a few things. As a hospitality company, the key is that we have customers who could come, sit in our restaurants and feel safe. And half of that battle is actually about how we serve them, how they will pay and how we can drive loyalty. Matt mentioned that we have some incredibly loyal customers, but we were doing nothing with loyalty before. We weren’t digital. COVID really accelerated that thought process that we need to have: the Click and Collect option, and we definitely need to have Pay at Table. And ultimately that needs to be integrated because what we didn't want to do was to interrupt the customer journey in a way, or make it more complicated for back of house and head office. I've worked in companies with 300 sites, and if you do this without fully thinking it through, you will end up making an awful lot of work for everybody else. And nobody appreciates that. I think you really have to be focused and we hoped to drive those sales. People came back, they were happy to use their phones and use the QR code and the LOKE App. We saw some great uptake in additional sales and drinks. And I think the one thing that probably everyone here would say is: “when I want to pay, I really want to pay”. The App is great for that. We can just finish off the bill and our customers can leave on their own terms. Everyone's happy. And it really helps, especially in those difficult times where people are very unsure about coming back to restaurants.

Rachel: That's very insightful. And it's been a journey with City Pub Group as well, Toby.

Toby: It's been very similar for City Pub, really. The other thing that we would say, and Matt alluded to it, is that the world of getting excited about a system that allows you to order and pay at table has sort of evolved. Pre COVID, that was quite exciting. But it is now a basic thing that you need to have in your business. So, our focus and what we talk to LOKE most about is how we drive membership and loyalty. The App actually is a club in our environment. When you download the App, you become a member of the club, you get points, those points work very similarly to an airline loyalty scheme. There are different levels you get access to according to how many points you have. And these points give you better perks in return. What we're constantly trying to do is use the base data to directly market the individual customer, make that connection individual and personal, and then encourage them to make their way up those levels. And the big thing for that is having a customer wanting to return – this is the absolute classic of running any sort of hospitality, retail business. And being able to do that through membership is incredibly important to us. I know there's an awful lot of really sophisticated technology that goes into Order and Pay at Table, but we have moved on from that now and we care about how we can make this really chime from a membership loyalty point of view. And we would only work with the provider that did that.

Rachel: Thank you both. Matt, we've heard some fantastic testimonials from 2 of your customers. Obviously in our highly fragmented and competitive market, how would you say that LOKE is different? What sets it apart?

Matt: There is a pattern in what both Toby and Michael are saying here. Firstly, COVID has matured the market with technology in the hospitality industry by about 5 to 8 years. And customers expect technology to be able to place orders, whether they're at home or whether they're in your business. I've been doing this for 10 years and what we found is that you can implement a payment solution or an ordering solution or a delivery solution but getting customers to use it is very tricky. And the point of a good system is getting transparency of customer information. If we know who customers are and how they are interacting in the business, the staff can provide better service. And if they get this service and a better experience, you're going to get them back more often and you're going to get them spending more each time. That's where LOKE creates its value proposition. It's not in the ordering, it's not in the payment. It's about understanding the customer and then personalizing the journey to get customers to spend more, and more often.

Rachel: Amazing. And I think that a good concluding question, which applies to all three of you, is where to from here? Where do you see your business being in 24 months-time? If you can look that far ahead.

Michael: Who knows what's going to happen in 24 months. Without doubt, we'll be a bigger company. We're currently doing that pipeline as we speak; very interested in expanding our managed estate, which we will do. We're also just as interested in our franchise estate. I can't say anything at the moment but I’m sure we will see things happen over the next 24 months. I would imagine not quite as many as Toby, but a healthy increase. We are excited about Shawas and QSR, and that is where we'll be spending our time at the moment. For Comptoir, if we get a great site and a great offer, we will always be interested. But the QSR is something that we're particularly interested in.

Rachel: Fantastic, thanks Michael. And Toby?

Toby: Undoubtedly, we will be bigger. We've got the financial backing to be able to support growth and we will definitely grow our room stock. We got to the point where our hotel room accommodation center has a 12% turnover on average, which is a big step forward for us. We also have some development opportunities in our existing estate, to develop garden areas for instance. We found that even when the restrictions dropped and people could go back inside, our customers usually preferred to book outside in the first instance. The challenge there is to have the external space to be as good as the internal space, and that takes a lot of investment. But I think that's here to stay. And it's that development arm alongside rooms as well that we will focus on. Just last week, we identified that we could get 4 bedrooms above a great Pub of ours in the center of Oxford. This new layout will transform that Pub: those four rooms will make a huge difference to that business. Another important thing to consider is geography. We sound like a very big company because we are a PLC, but we only operate from East Anglia down to the Southwest. And if somebody came with a great opportunity in Leicester for example, it would be very challenging for us to operate. My view is that when you're growing, you make that mistake, you stretch yourself geographically. And that means that you cannot be efficient on the ground because you don't understand the local market. Even the best Pub opportunity for us must fit in a geographical location. That's from an estate point of view. From a tech point of view, and Matt touched on it, we are trying to push just different doors in our estate. When you think about a normal and traditional Pub environment, it is not actually set up for Order and Delivery to table. That's why we are going to be thinking about how we do the physical redesign of our buildings, alongside the tech solution. It's going to be quite an interesting couple of years ahead!

Rachel: Fantastic growth plan, and definitely very exciting Toby. Thanks for sharing. And over to you Matt, where will LOKE be in 24 months' time?

Matt: The industry is changing so fast, especially in the technology space. And you can hear how Toby is talking about how they're even looking at the physical redesign of their pubs and how that will change. It's constantly evolving. The brands that are the most successful from a technology and revenue standpoint globally are Starbucks and Domino's. Domino's has nearly 100% of all revenue processed online; they consider themselves to be a tech company that delivers pizza. And what they've been able to do is maximize margins and any cost savings possible. They then layer that through artificial intelligence to know exactly who the customer is and when to get them to transact. It means that they will know when the kids are getting picked up from school, how much each person earns in the household and then how to target them and at what time. At LOKE, what we do is take that enterprise technology to smaller groups; we want to give our operators that level of sophistication. And we want to keep breaking ground with the support of people like Michael and Toby.

Rachel: It's a lovely way to end. This concludes our Seminar today. Thank you very much, everyone for attending. It's been a pleasure. And of course, thank you to our speakers Toby, Michael and Matt.