Ultimate company man

01/11/2011 - 00:00
Catherine Chetwynd meets SSP’s UK & Ireland chief executive Tony Keating, who joined as a trainee manager in 1982 and has stayed on since. He’s progressed up the corporate ladder, even as the company underwent a management buy-out, acquisition by Compass and then sale to a venture capitalist. He talks about SSP and its Caffè Ritazza brand

Q: Does SSP retain a culture of career progression?
It was lovely series of evolutionary steps, made very simple. I think one of the best things about this business is that our learning and development programme is as good as anyone’s out there. We have a lot of trainers and a very extensive portfolio of training courses. We have a programme of recruitment from within and every two weeks a vacancy lists goes out to every one of the 650 units in the UK.

Q: Which achievement are you most proud of?
My first job was at Paddington Station where we ran about six units. Everything was pretty much the same: They sold the same make of sandwiches in coffee shops, the take-away outlet, the buffet bar. It was a really undifferentiated, unsegmented offer. It has been transformed into one where we have Starbucks, Burger King, Marks & Spencer Simply Food, Whistlestop convenience store, Camden Foods … I guess [I’m proudest of] playing a part in improving that portfolio.

Q: What are the company values?
Teamwork, quality, success. It is simple for our staff to get their head round that and it gets them thinking about what we are aspiring to do. One of the constant challenges we have got is to be unrelenting in our desire to give the perfect product to customers every time. We are teams of people; the guys running Camden Food at the moment will be 10 or 11 people, 3 or 4 at one time. They have got to work together to make it happen and probably that is where culture comes in, you have got to have supportive. We aspire to celebrate success and almost without fail every year we have conferences where we are applauding all the results of the year. One of my favourite speeches of the year is at the beginning of the conference, when I look back at all the great things that have happened. I always mention the one or two things that didn’t go too well but it’s a minor detail, it’s really about all the great things we can be proud of. We have employees of the year, long service awards and we try to have incentive programmes that really make a difference to people.

Q: How does your incentive scheme work?
It’s all about carrot. If anyone gets an average of 90% or more over a month in the mystery shop, then everyone in that unit gets an £80 per month pay rise, exactly 50p/hour on their pay for that month. It’s really made a difference in terms of staff behaviour because there’s real group pressure to get it right.

Q: What’s your contribution, given that good culture comes from the top?
I’m genuinely very passionate about quality. Everywhere I go, I will always buy our food and always go into one of our units. It keeps people on their feet about what’s good and what’s bad. I think it’s probably the one area where I most set the standard.

Q: How do you measure success?
We mystery-shop the life out of our units [two visits a month] and we audit three times a year, a half-day audit. Are the fridges working, is the cappuccino made to the right standard? But the bit you can never audit in that way is the whole staff-customer experience. As soon I go up to Euston, the staff are smiling and waving and ‘hello Tony’, and it’s fantastic but it really is about understanding how good is the guy in Burger King to the guy who turns up at 10 o’clock at night. Are they smiling, are they happy? Are they selling up – persuading people to take a large coffee or a croissant with that? And the only way we think we can really get a handle on that is to get someone the staff don’t know, independent, to come to the unit and tell us how good the customer experience was.

Q: Who are your biggest competitors?
The big guys, Costa, Nero, are probably the two biggest. Starbucks aren’t really our competitors in that we have taken the decision to franchise Starbucks, so we operate 19 Starbucks in the UK, 11 in rail, eight in air.

Q: What do your rivals do best?
In the coffee market, I suppose Nero are probably best at doing the authentic Italian. If there’s one thing I’d say Costa were best at, I would say they did a fabulous job in refurbishing their estate over the last four or five years … and I think their marketing has been fantastic.

Q: What makes you stand out from your rivals?
Our beverage range is at least as good; my people would say better. Also, at Caffè Ritazza, we make our food on site, it’s freshly baked, we don’t buy in from factories. Costa, Nero, Starbucks all buy their food in, and it has 2-3 days’ shelf life, which is fine. But whether it can quite compete with an offer that is made that morning... For many items the shelf life on the food in a Caffè Ritazza will be as low as four hours and the food, without question is better. And I think the staff bit is key. You can choose the best coffee in the world and if your equipment is not serviced and your staff aren’t trained to make the coffee, you may as well not bother going to Italy to agonise over the beans because coffee is fairly intolerant of incompetence. I think some of our clients would say they would take Caffè Ritazza as opposed to a Costa or Nero because we’re a bit more flexible with the brand, we will make it a more continental-style café, where I can also do a glass of wine and a bottle of beer. We can weld the two together well. It could look a bugger’s muddle but it doesn’t … and it’s one of the reasons we win some kinds of airport business, because we have that flexibility.

Q: How is Caffè Ritazza perceived by consumers?
One of our big interests is why people don’t use the catering on railway stations. The penetration might be 15% to 20%, it depends on the kind of station it is. If it’s a commuter station, the penetration is very low. The reality is, the longer your journey, the more the participation increases. The most significant research we did was back in 2007 and in 2010, when we repeated it. We employed a company called Envirosell, American of course, experts in the science of shopping, and they came to Euston Station with 40 cameras and welded them all over the station and spent four days taking 10,000 hours of video, following 1000 people to the end of the station to see how they behave.

Q: What did you find?
They key thing to understand is that people are quite stressed in railway stations and the need for information is paramount. I think it was 64% of people, the first thing they did when they got there was to go to the departure board. And then they’ll stand there and will wait for their platform number to come up. If you interview 1,000 people and divide total time by total number of people, that makes ‘dwell’. For traffic going through the station, the dwell was about 7 minutes 30 seconds, which was a big difference to the normal published dwell of around 20 minutes. So you have only 7½ minutes to try and sell someone something and 2½ minutes of that time is spent looking at the departure board. It’s why we know that the faster we serve people and the shorter we keep those queues – the way we make choices simple for people – the higher the sales we’ll take.

Q: How did you respond to these results?
I suppose it came back to the speed thing and if Caffè Ritazza is appealing to SSP market research categories like ‘routine refuellers’, those pretty much on the go who want simple choices, and ‘tasty, fresh and indulgent’, then that’s where the market is. But we had a secondary centre of gravity, which is people who are a little bit more sophisticated, doing espressos, macchiato, and freshly baked. Generally the food offer in Caffè Ritazza is a bit more aspirational than Costa Coffee or Caffè Nero. Sometimes the food is just a little bit too fancy for the centre of gravity. If we, maybe, challenged ourselves at Caffè Ritazza, sometimes we make it a bit too goats cheesy and a bit too Parma hammy and if you compare it to what Costa Coffee are doing, they’re doing a bit more vin ordinaire. That was a big piece of research and it genuinely shaped the way we run the business.

Q: Do you invest a lot in training baristas?
We’ve got 14 coffee schools in the UK and we employ a senior coffee specialist and his job is to do nothing but worry about our coffee programmes in the UK. We have got 41 head baristas in the UK and their job is to train the people in their patch to be senior baristas; I think we’ve got about 1,000. There must always be a senior barista on duty at every unit because the senior barista is the one that not only knows how to make a good cappuccino, latte, espresso, but he is able to adjust the grinder blade, adjust the flow times and check the variables to make certain the machine is delivering the right quality espresso.

Q: Where next?
We’ve got to continually evolve the brand. We’ve got a new format being developed that we are planning to launch at one of our railway stations, probably Euston.

Q: What is Ritazza worth to your business?
I’m not sure I’m supposed to tell you that. I know the UK figures because I know my own business, so let’s just leave it at that.

Q: How have you reacted to the current economic climate?
The temptation, of course, is to say inflation is 5 per cent, so put prices up by 5 per cent, but it’s just not possible nowadays. You can pass on to consumers what you think consumers will take but frankly, we don’t want to be more expensive than our competitors for the key items in the range, those are the ones that drive your revenue. Therefore, you look for other ways to try to keep your profits static or growing. Take the Caffè Ritazza in Euston Station. To my mind the real opportunity is to serve more customers at the 6am-9am period. If you’re serving 1,000 customers between 6 and 9, and I know there’s more demand than that, then let’s get 1,100 through – and how are we going to process those additional customers? If you can get volume, volume is your friend more than margin.

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