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Sun 5th May 2013 - Revealed - the power of Red Hot World Buffet
Red Hot World Buffet – Luke Johnson’s new growth brand? Luke Johnson, who sold Giraffe to Tesco in March for £48.6m, earning an eight times return on his investment, is set to take a minority stake in Red Hot World Buffet, according to The Sunday Times. The company was founded by Helen and Parmjit Dhaliwal in 2004 and its latest opening at Nottingham Cornerhouse is serving 8,000 customers a week. It wants to expand to 25 sites within the next three years. Talks about an investment are “well-advanced’” according the Sunday Times. Red Hot World Buffet serves a fixed price buffet featuring cuisines from around the world, including China, Mexico, India, Italy and the US. Red Hot World Buffet operates seven restaurants, four under a company called Helen’s Cuisines and three are operated by a sister company, Passepartouts. Passepartouts reported turnover up 117% to £14,073,957 in the year ended 31 January 2012 and pre-tax profit of £926,557 (2011: £388,856) due to the opening of a new restaurant in Manchester and the full-year effect of a Leeds restaurant which opened in October 2010. Helen’s Cuisines saw turnover rise 10% to £6,484,171 in the year ending 31 January 2012. There was an exceptional item of £742,488 related to the closure of its original Nottingham site, which had traded well but had ended up “off-pitch” as Nottingham city centre developed and was producing small operational losses. The company reported a loss before tax of £1,119,670. In 2011, Helen’s Cuisines reported a pre-tax profit of £435,307 on turnover of £5,871,654. In an opinion article published in March, and referring to the Tesco acquisition of Giraffe, Propel managing director Paul Charity wrote: “One wonders whether Tesco is, in fact, being ambitious enough. You only have to consider the enormous success of Eataly across a range of international markets to understand the possibilities engendered by creating a layered experiential shopping and eating offer. Joe Bastianich refers to his New York branch of Eataly, the fourth most popular tourist destination in the entire city, as a modern re-creation of the traditional Italian piazza, a place where urbanites fulfill a range of era-impervious personal needs. (Wholefoods is, of course, only a scaled down version of Eataly.) In fact, from a sector perspective, one is thankful that Tesco hasn’t bought Red Hot World Buffet and adopted its Nottingham Cornerhouse iteration and scaled up further if it’s the creation of an unmatched consumer experience that we need to be most fearful of.”

The Dhaliwals explain the evolution of the brand - and its most up-to-date version at the Cornerhouse, Nottingham: “Nottingham is our adopted home,” says Helen Dhaliwal. “It’s where we opened our first Red Hot World Buffet, so it means a lot to us coming back to Nottingham for our flagship unit.” Having closed its original site last year to prepare for relocation to the high profile Cornerhouse site in the centre of Nottingham, the opening of the new 27,000 sq ft, 500-cover Red Hot World Buffet outlet moved the brand on once again. With Nottingham representing a £2.7m investment, developing a Red Hot World Buffet was “like fitting out like an industrial production unit,” in terms of the catering equipment required, says Parmjit Dhaliwal. Each preparation zone is divided according to the type of cuisine, with dishes including Halal and gluten-free ingredients. In the Nottingham restaurant a unique oriental grill, the first in the UK, allows chefs to barbecue Chinese, Japanese and Thai dishes using traditional Mongolian ‘sword and shield’ techniques to while an eight-metre sushi counter offers a constant supply of freshly rolled items. Specialist Indian, Thai and Chinese kitchens also produce freshly cooked dishes to order. A glass window even allows diners a view into a custom-built patisserie kitchen, creating a constant supply of pastries, cakes and desserts. Another first for both the brand and the UK is a state-of-the-art pizza oven, which cooks an array of tailor-made pizzas from fresh dough. A gourmet burger counter allows customers to choose which spices go into their freshly-made beef patty, along with a selection of garnishes and condiments, and even a choice of styles of homemade, hand-cut fries. “Everything we’ve learnt at previous venues is going into Nottingham,” says Parmjit. “We want to give chefs the space to perform.” From the beginning, Red Hot World Buffet moved the goal posts on buffet restaurants, offering 120 different dishes. The food was made from fresh ingredients, cooked to order at serving stations by chefs who were specialists in the cuisine they were preparing. Customers paid a fixed price, and could go back to the serveries as often as they wanted. The format was an immediate hit. That initial restaurant had a 160-cover capacity, while the second Red Hot World Buffet, opened in Northampton in 2006, could accommodate 250. Outlets in Milton Keynes, Liverpool and Leeds followed, adding covers each time. Manchester, opened in 2011, has a capacity of 375 and last year added a second floor dedicated to corporate dining and private parties, and serves more than 10,000 people a week. The Cardiff Red Hot World Buffet, also opened in 2011, serves around 8,000 customers a week. The number of dishes on offer is now 300, including more than 40 different desserts, all part of the fixed price offer. Parmjit Dhaliwal says: “What we’ve done is take the best aspects of a la carte, and the best aspects of buffet, and create our own version of it. A la carte is high quality food, freshly cooked with a wide choice, and with buffet you have speed and variety. Added to that, people know that irrespective of how much they have, it’s one price. Consumers enjoy the variety, and the chance to make up their own plate of food. The other thing that appeals is the speed,” especially to larger party bookings. In conventional restaurants, “when you eat out in big groups the kitchens aren’t geared towards delivering food fast enough. With Red Hot World Buffet, you can go for the food whenever you want and still keep up with the conversation.” Helen adds: “The customer also appreciates the opportunity to talk to the chef, tell them their preferences, and to see their food cooked freshly in front of them.” The brand’s core customer is the C1 skilled worker demographic, representing around 60% of the market. A recent customer survey confirmed the Dhaliwals instinctive understanding of their customers. “We cover almost all segments of the eating-out market. The only two segments we don’t appeal to is the extreme top and the extreme bottom,” says Parmjit. While they acknowledge that the guarantee offered by a fixed price menu has helped the brand’s expansion during a period of low consumer confidence, the recession is definitely not the prime driver of the brand’s success. “The recession may have helped - no one wants to waste their money, and they want an enjoyable experience,” says Parmjit. “You can go into the marketplace with very cheap prices, but then that’s the kind of customer you attract. Being the cheapest doesn’t mean you are the busiest. Our position is quality coupled with value.”

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