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US companies set to open outlets 320 metres apart and will jostle for position with homegrown chains in sizzling market
A tweeted picture of George Osborne tucking into a takeaway from the upmarket chain Byron late at night while completing details of the spending review may have prompted ridicule this week, but the chancellor was bang on trend in buying a "posh" burger.
The mushrooming of upscale burger joints, especially in London, is set to escalate next week when two US companies open their first UK outlets within 24 hours of each other – and just 320 metres apart.
Five Guys, America's fastest growing restaurant chain, which counts Barack Obama as a fan and is said to have half the market for posh burgers, opens its first non-US outlet on Thursday in Covent Garden. And a day later New York's Shake Shack will make its London debut four minutes' walk away.
Both companies claim to have known nothing of the other's intentions and were quick to try to downplay any suggestion of competition between them. Randy Garutti, chief executive of Shake Shack, said Five Guys "do something very different to what we do". "We don't talk about competition because we think there is enough to go around," he said.
Five Guys intends to open five outlets in the UK – four of them in London – by October and between five and 10 more every three months after that, in a joint venture with the Carphone Warehouse co-founder Charles Dunstone. John Eckbert, the UK managing director, who works with Dunstone, said Five Guys had a "very respectful" relationship with Shake Shack.
"We have yet to find someone in the US that we believe is really like us," he said. "We think the burger is as good as we can make it." The simple Five Guys menu and style were more akin to the operation of the sandwich chain Pret A Manger, he said.
It is a boom time for high-end burger chains. Eckbert said research showed that almost a third of the US burger market was taken up by "better burger" outlets. In the UK, homegrown companies such as Byron, the Meat chain and Honest Burger have grown rapidly on the back of soaring demand. This month it was reported that Byron, which launched five years ago and now has 34 restaurants, had been withdrawn for sale after bidders failed to meet the £100m asking price.
Tom Barton, who with two business partners runs the critically acclaimed Honest Burger, is working on plans for the company's third restaurant in two years, having started the first for £8,500. He said the burger trend was based on consumer demand for simple, quality food.
"I think everybody has always had this interest in burgers but unfortunately burgers have always been generally pretty average. For me it has been a very simple meal done very badly so it has been stuck in its way like that for a very long time," he said.
Mike Palmer, a restaurant consultant, said people wanted to "consume experiences" and now had a much more advanced idea of what they wanted to eat compared with in the recent past.
One of the most successful of the new breed has been the Meat chain, which started out as a burger van touring London and now, five years later, is preparing to open its fourth outlet, in Brighton with 110 seats. The co-founder Scott Collins said turnover last year was £8m, of which 21% was profit. This year the company projects turnover of £10m.
Large players have also caught on. The Soho House Group opened Dirty Burger in Kentish Town last year and it has so far exceeded expectations, according to the group's director of restaurants, Nick Canton.
The proliferation of restaurants has led to suggestions that the market could become over-saturated, especially with the new arrivals. Collins predicted a "war-off" between the two, which are both located close to a Meat branch.
"I don't think people are going to stop eating good burgers and go back to bad burgers, so as long as these companies keep evolving I think there is plenty of room. I think people will be trading up – McDonald's eaters, Burger King eaters will go on to a better burger," he said.