Loungers: ‘we’re very positive about 2024’

The all-day concept, which is on track to open 34 sites this year and end the year with 256, continues to focus on the high street but sees opportunity elsewhere as well.

“Our bread and butter is very much secondary suburban and market town high streets,” Collins says. “Those still form the majority of our pipeline.

“From time to time we open in coastal locations and mixed schemes, and we trade very strongly.”

In the 24 weeks to 1 October 2023, the café-bar group reported revenue growth of 22.3% to £150m versus H1 2023, with like-for-like sales growth of +7.7% and the addition of a net 32 new sites.

Holding up well 

Rather than tweaking the offer based on location, the success of the model is constant evolution of the offer across the estate, according to Collins.

Menu innovation has served the brand well, with all day parts in growth, particularly brunch. Recent additions to the menu such as flatbreads, noodle and rice dishes, and iced coffees are on the rise.

“There’s no real shift in average transaction value,” he adds. “Frequency is a lot harder to measure but sales are holding up well, so the instinct would be that frequency hasn’t changed.”

While the Lounge and Cosy Club brands are seeing accelerated rollout, Loungers’ roadside dining concept, Brightside, will see measured expansion, with three sites in the pipeline for 2024.

“We’re not actively building a pipeline for Brightside beyond that. We’re keen to get existing sites up and running, understand the capex.

“We average £22,500 in sales per week across Brightside, whereas Lounge is £30,000 per week, but we always knew it was about brand awareness.

Very positive 

“We’re evolving our marketing strategy to allow for that.”

In response to the Autumn Statement last week, Collins said the National Living Wage increase was higher than anticipated and will have an inflationary effect.

“Our teams will have more money in pocket,” he says. “But it is obviously an additional cost burden, more so across the industry, where lots of margins are under significant pressure so prices will have to go up.

“We’re a fortunate business that continues to grow because of our all-day model, so we can absorb some of these costs.

“Our sales have performed well, our model looks relevant, and we don’t see any reason for that to change. We’re very positive [going into 2024].”