Carlo Distefano and his son, Marcello, run the San Carlo group, set up in Birmingham in 1992 and now a 14-site operation turning over £45m. They tell Neil Gerrard why, after building a successful business in the provinces, they're now looking to expand in London
How and when did San Carlo get started?
Carlo Distefano (CD)
People said: "Oh, you don't want to go to Birmingham, you are mad." But, to me, Birmingham was the second city. So I opened there and it was a very big success. A couple of years later I opened in Bristol, then Leicester, then Manchester in 2004. Seven years later we have made the Manchester site bigger and now we can sit 280-300 people, plus a private dining room. We spent £1m on the refurbishment.
What do you make of the market outside London?
CD Outside London is much harder. In London you can find staff from Rome, Milan - all the big Italian cities. But to get the people from Milan to work in Leicester, I find hard. In â¨London I feel I can express myself. And I have made a decision with my son that we are â¨going to expand in London more than anywhere else.
Marcello Distefano (MD) We have been very successful in the provinces - we have a very strong name there. But in the provinces it is a much smaller market, so when you suddenly get a big influx of restaurants opening up, everyone starts trying to eat each other up. Some cities are growing but they haven't got the same wealth of people that London has. In London, you can go out any night of the week and restaurants will be full. Luckily, in the provinces we do very well, but I see a lot of restaurants struggling.
You have quite large, prominent locations in the provinces. How much of a factor has that been in your performance?
MD One of our big things has always been location. It is very important to us and we always have certain things we look for every time we open a site. Some of our locations are not so prominent, some are. But we still have good frontage and all those kind of things. We have always grown organically with San Carlo. For Liverpool we waited four years until the right site came along so we never put too much pressure on ourselves. Sometimes you see companies force themselves to find a site and make do with what is available at that present time.
You mention that you want to expand in London. Do you have an optimal number of restaurants in mind for the UK?
MD Carlo has always wanted to have another Signor Sassi, and San Carlo will always grow organically, but Cicchetti is where we are going to see our biggest growth over the next few years. It is going to be the focus of a lot of new openings and we are looking to do that mainly in London and them come out to the provinces.
Do you have a partner involved with rolling out Cicchetti?
CD Not so far. Maybe with Cicchetti we will look at outside finance.
So you would be looking at smaller sites for Cicchetti than the ones that you currently operate?
MD Yes and that is the reason Cicchetti works well for us - it gives us a better opportunity to get sites. It doesn't require as much square footage as a San Carlo does. And also this style of food, the whole small dishes concept, is working very well at the moment in London with all kinds of cuisine. People are enjoying it and I see this as the way forward.
You mentioned waiting for sites but the competition in London is really fierce. How are you going to manage that?
MD There are lots of people competing for them, but at the same time, every year restaurants are failing. One person can make a go of a site and another person can't. There is always stuff coming around.
CD Our advantage now is that we are bigger than we were. When we were smaller, the bigger sites used to go to the bigger boys.
MD I personally believe that the rents for the restaurant industry, especially in London, are getting higher and higher and eventually, there has to be a tipping point, especially when we are paying 20% VAT.
CD We do all right, though; we still make a good profit. You must never be over-confident and think, "Oh, I can do anything".
MD If the figures don't work then don't try and take a risk.
You are dealing with a number of quite high-profile customers, particularly in Manchester but in other cities as well…
MD Yes, although it is a shame Mario Balotelli has left. He has been brilliant.
CD He used to come in twice a day!
…how do you deal with handling such big celebrities?
MD It is not a major issue for us. Everyone gets treated the same, and that is why they come and enjoy it. Ninety-nine per cent of the time we never have an issue, people are left to themselves. Every now and again we might get someone really A-list and on those occasions you just make sure that no one disturbs them.
Recently you started a franchise involving Signor Sassi, the Knightsbridge restaurant â¨you bought in 2007. You had plans to open in 22 countries in the Middle East and north Africa but since then there has been a lot of unrest. What is happening there?
MD We were approached to run a franchise with Americana in the Middle East and we opened two Signor Sassis in Kuwait and one in Beirut. At the time there were plans to open all round the Middle East and then obviously the political situation over the past couple of years has made it a lot more difficult. Countries that we were looking at before - such as Egypt - have become unstable. We are now maybe not going into all the countries that we looked at before. We will stick to major ones such as UAE. Beirut was doing fantastically well but the problems in Syria have reduced it quite a lot. But in the Far East we have a great franchisee partner who is very enthusiastic and Signor Sassi has gone very well over there. We opened in the Anantara hotel on 37th floor, with great views over Bangkok and it has been fantastic. We are going to open another couple in Bangkok and then we are looking at the rest of Asia with the same partner, who we can't name, unfortunately.
Aldo Zilli works as a sort of consultant for you in the UK. How did that come about?
CD I have known Aldo for 30 years, so when he sold his restaurant he came in and said "Carlo, I miss the food", and I said "Come work with us."
MD We brought him in originally to work with us on the Cicchetti brand. Aldo's passion is unbelievable. He started coming round to some of the other restaurants and we thought "This is really good, you can go round and help monitor the restaurants with us". The good thing as well is you have someone with you who has been a restaurateur and understands all areas of the business, not just the kitchen.
People are becoming more educated about food. Italian food has long been popular in this country, but how do you keep diners interested when there is so much else going on?
CD Because Italy, after the Roman Empire â¨collapsed, became 22 or 24 states. They all â¨had their own government, so everyone â¨developed their own food. What you eat in â¨Sicily, you don't eat in Milan. What you eat in Venice, you don't eat in Rome. When I came to England I had never had a lasagne or a â¨cannelloni in my life, because I am from â¨Sicily. Our market it is huge - if I give you food from Puglia or from Venice, it is completely different.
MD The key, for all of it, is the quality of the ingredient. That is what it comes down to. Italian food is based on simple cooking, so if the quality of your ingredient is good enough then people will come back to you.
What advice could you offer to someone who is thinking about starting their own restaurant venture?
CD I think if you are honest with yourself, if you open a restaurant because you like to run a business and you put your honesty on a dish, and not try to con people, then it will always be a success. It is so many hours - from 9 o'clock in the morning to 12 o'clock at night. If you are just doing this because you want to make money and buy a Ferrari, then 90% of the time you will fail.
What are the main opportunities and challenges coming up in the restaurant market, specifically in the UK, over the next few years?
MD I think it looks quite good. Personally I think there will be real growth in the casual-dining market. I think that is where there has been one of the biggest changes over recent years because the causal-dining market before used to be quite a lot of cheap eats. That market is completely changing now so we are getting companies coming in offering good value and improving the quality of what they are offering as well. I think fine-dining restaurants are going to be struggling a lot more over the next 10 years. People are no longer going to be interested in stuffy rooms, quiet restaurants, to spend £80-100 a head. People want to go to a great place with a busy atmosphere and they want to see value and they want to see quality. That is the way it is going now.
San Carlo group's sites
Aside from its original large-scale San Carlo restaurants, the San Carlo group also has two Cicchettis - in Manchester and Piccadilly, London - both serving small plates of Italian food. Meanwhile, Fumo in Birmingham, more of an evening bar offer, operates on a smaller site close to the original San Carlo.
- San Carlo Birmingham opened 1992
- San Carlo Bristol opened 1996
- San Carlo Leicester opened 2000
- San Carlo Manchester opened 2004
- Signor Sassi, London acquired 2007 (originally opened in 1984)
San Carlo Liverpool opened 2009
- San Carlo Leeds opened 2010
- Cicchetti Manchester opened 2010
- San Carlo Flying Pizza acquired/opened 2011
- San Carlo Fumo, Birmingham opened 2012
- Cicchetti Piccadilly, London opened 2012
- Two Signor Sassis opened in Kuwait in 2009 and 2010
- Signor Sassi Beirut opened 2011
- Signor Sassi Bangkok opened 2012