Operator profile: slow and steady growth for Gaucho

Gaucho Restaurant Group brought Argentine beef and wine to the UK when there was no real competition. In one of her last interviews before leaving the company, managing director Tracey Matthews told Tina Nielsen patience and people have been key

At a time of widespread recruitment problems in the foodservice industry, Gaucho, the restaurant group that brought Argentine beef and wine to Europe and beyond, seems to be ahead of its peers.

Consider the career path of recently departed managing director Tracey Matthews, who joined the group as a restaurant manager in 2000. Along the way, she created the HR department as HR director and went on to establish the Gaucho Academy that all new staff have to go through before they are allowed into the restaurant.

“This is a fantastic company for internal development,” she says. “If I look around me there is the marketing director who started out in sales and events 13 years ago and my operations manager started as a general manager.”

Gaucho, founded by Zeev Godik, first launched in Amsterdam in 1976. While Godik went on to open more restaurants in his native Holland, it would be nearly 20 years before he opened his first overseas restaurant in London.

According to Matthews, the Gaucho Grill, as it was then known, was the first dedicated steak restaurant in the British capital. “It was very London; bare brick walls and simple. It was one of the best-kept secrets in the city,” she says.

Even without marketing the restaurant gained popularity. “Gaucho has never advertised – the brand has always focused on the guest and great experiences.”

Growing with patience

The 20-year gap between the first restaurant in Holland and the first in London illustrates the patience with which this brand has been built.

“Expansion happens when the business is in a good place and when we find the right place to go,” explains Matthews. “It has always been about location rather than the desire to grow.”

In 1998, a second Gaucho opened in the Hampstead area of London and the following year the first in the financial area came. More London and UK branches followed – today there are 16 – and Gaucho has established itself in Dubai and Hong Kong. It operated a successful location in Beirut for several years, which has since closed due to war in Syria and safety concerns for staff.

Today the group also runs 22 CAU restaurants in the UK, a less formal and more accessible steak restaurant group.

There have been periods of non-expansion, such as the aftermath of 9/11. “We have our ups and downs but there has always been a constant in the business, ‘don’t panic, focus on what we do and do it brilliantly’. Running restaurants is actually just about being nice to people and serving them great food and drink,” she says. Regardless of the bigger picture, as Matthews explains, location is the key factor in any new Gaucho restaurant opening.

She points to last year’s openings in Birmingham and Edinburgh, the first outside the capital. “We wanted to be in Birmingham for years but it has always been a case of getting to know the city and figuring out where Gaucho belongs. Is the brand well enough known?” she says.

Opening there last year, she says, was perfect. “We were welcomed with open arms and it was the same in Edinburgh.” Part of this is about showing local diners that they understand the city and the people – in Edinburgh that means putting haggis empanadas on the menu. “It is a way to say thanks for having us by paying homage to where we are,” she explains.

The openings in Hong Kong and Dubai were a way to test the waters of international expansion in destinations that already had a dining public familiar with the Gaucho brand. Dubai, a city where restaurants tend to open and close quickly, has been a success. “Dubai is full of so many people who already know us and Hong Kong is similar. There are strong British expat communities in both places,” says Matthews.

The overseas markets have come with their own challenges – the Dubai market requires more non-alcoholic drink options, for starters, while the higher temperatures mean the focus is not on big steaks and there is more fish on the menu.

Matthews calls Gaucho a ‘builder’ brand. “People get to know the brand over time and the business builds slowly. So, more than four decades after launch, and with 18 restaurants across two continents – and a whole lot more competition – what characterises Gaucho today? “Gaucho is about having the most memorable experience of the best Argentine beef and wine,” says Matthews. “It is elegant, slightly dramatic in surroundings and it remains a place where you can get dressed up for a night out, which I think is a lovely thing to do.”

At least in London, there is now strong competition in good-quality steak restaurants. Do they attract a different demographic? “I think sometimes it is the same crowd, but different occasions. Gaucho has a strong celebration clientele, but in the [financial] City sometimes it is just the guys who want to kick back with a couple of large steaks and a couple of bottles of red wine,” she explains. “It moves and changes, which is what I think makes Gaucho a successful brand.”

It has no doubt been helpful to have such a strong identity as new competitors have continued to pop up around Gaucho. “Argentina is at the centre of everything we do – that’s where all our meat comes from and the wine list is exclusively Argentine,” says Matthews.

This shouldn’t be confused with stubbornness, rather self-awareness. Recent years have seen a veg-centric trend take hold and diners increasingly looking for vegetarian and vegan options. The latest Gaucho menu is the first one to feature a vegan dish; a natural move for the group, says Matthews.

“We realise we may have a table where three out of four people would like a good steak, but the fourth person is vegan and we want to make sure they will feel equally welcome,” she says.

“You have to know what you are and stick with it, which for us is Argentine beef and wine, but make sure you do enough around it so that people see you are listening to your guests about what they want and need,” says Matthews.

People at the centre

As far as running a sprawling restaurant group is concerned, Matthews points to staffing as the number one challenge. A well-documented problem across the foodservice sector, the recruitment issue is becoming even more central as the date for the UK’s exit of the EU approaches.

“Brexit keeps me awake at night,” she says. Gaucho, like every other restaurant in the country, employs many European citizens who are feeling insecure at the political upheaval while there has been a slow-down of people from the EU coming to live and work in the UK.

“We have so many nationalities and it is what makes hospitality such an amazing industry,” she says. “The idea of not having that continuous flow of people is upsetting, as much as anything else from an atmosphere point of view. I hope we can find a way around it.”

The people who join now are different from when she managed restaurants herself. “I have been in restaurants since I was 18 years old and when I first started we were working 60 or 70 hours every week, we worked every weekend, had no Sundays off and did stocktakes until the middle of the night,” she recalls. “People coming into the business now are saying, ‘hold on, I’d quite like some balance in my life’ and good on them.”

The group has taken a proactive approach to dealing with a new generation of workers who have different expectations. Training consists of 90-second videos instead of reams of paper for example. “Millennials learn in a different way; they don’t have long attention spans. When I talk to team managers I say: ‘This is their world, not ours, so we have to adapt’,” she says. “The people who survive are those who change.”

As the group continues to grow, her team focuses on recruiting, retaining and engaging staff, which currently stands at around 850. “It is the only way restaurant groups are going to survive. People dining out expect more from the experience, they want value for money and more memories, so you need to make sure that everybody working with you is absolutely representing the brand and you have to give them a career, not just a job,” she says.

Do the right thing

Gaucho has gone further than many operators by setting up the Gaucho Academy, initiated by Matthews when she returned from her first maternity leave – she calls it her second baby. “This industry doesn’t get respect for the energy, effort and skill it requires to be amazing in it. In restaurants you historically got a job, followed somebody around for a few hours and then you were on your own,” she says. “We wanted to make sure everybody who works in the restaurant, bar or on the door had all the right skills and confidence to go out there do what they need to do.”

On a practical level it means that anybody joining Gaucho will have to go through the academy for an eight-day course and pass the exams before they get inside the restaurant. New joiners learn everything about the business, from culture to beef, wine and cocktails. “They taste the whole menu, do full beef training with the master griller and they taste the wine,” explains Matthews. “They learn everything – from how to answer the phone and take a booking.”

Those who proceed to work in a restaurant later return to take courses in areas such as cigars and whiskey.

The academy is a real success story and is now CPD accredited in the UK. It is an extraordinary investment in people in what is traditionally a transient sector.

“It is just the right thing to do,” says Matthews. “It is investing in the team and it enables us to focus on being consistent. I know if I walk into our restaurants the staff can answer questions with confidence – because we have made sure they know the answers.”

The next step is to convert one of the Gaucho restaurants to a live academy restaurant where staff in training can get on-the-job experience and which will eventually be open to the public.

“It is a great tool when we recruit because we put our money where or mouth is – we believe in training and everyone you see in the business is committed to it,” says Matthews.

In the name of retention, she has taken a similarly pragmatic view on new mothers returning to work. “I do believe you can have it all, but not at the same time. I try to teach any new mother coming back that there will be points in their career where they plateau and they can enjoy their kids and then they can go again,” she explains. “Sometimes you have to decide, ‘maybe I won’t get to see my daughter on the hockey field, but next time I will’. If you can get comfortable with that you spend less time beating yourself up and more enjoying your job and your kids, rather than always thinking you are missing out.”

So where next for Gaucho? A new CEO, Oliver Meakin, has recently joined as Godik stepped down. Are there further plans for expansion? “We still think we have more cities in the UK and we have somebody based internationally who is always looking at different cities. It’s about making sure we know those cities well enough,” says Matthews.

Running a premium restaurant group today is different from 18 years ago when she joined Gaucho. Every overhead has gone up, from rent and rates to the cost of goods and staff. It comes as little surprise when Matthews gets back to the people.

“It is a challenging time for restaurants, which is why you need to have all the right people in place,” she says. “From sourcing to the menu creation to working with great beverage brands who support us to make sure we deliver the best we possibly can.”

Tina Nielsen

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