Di Maggio's and Paesano owner and Buzzworks go for growth

Two major Scottish restaurant operators have been in the spotlight in the last week or so.

And both, while highlighting the undoubted cost pressures on the hospitality sector, have had upbeat stories to tell.

This is great to see, especially given the pressures.

Interestingly, both The DRG, which describes itself as Scotland’s largest independent restaurant group and includes Di Maggio’s and Café Andaluz and now also Paesano and Sugo, and Kenny Blair’s Buzzworks Holdings have diversified with multiple brands and expanded geographically as they have grown.

The restaurant business is one in which many operators come and go, and the endurance and success of The DRG and Buzzworks shows how adept those behind these businesses have been at ensuring they cater for what often fickle diners want.

Starting with the observations on the difficult backdrop, The DRG co-owner Mario Gizzi flagged the employers’ national insurance contributions hike implemented by the UK Government from last April and other cost increases including wage inflation.

He observed: “Our wages-to-turnover ratio is higher than it’s ever been. We’re a very well-run, successful business but I know from speaking with colleagues across the industry that it’s becoming harder and harder for many of them to continue to invest in their businesses.”

Tony Conetta, the other co-owner of The DRG, declared: “The hospitality sector is one of the most important in the UK for getting young people into work and giving them the vital foundations of skills, discipline and experience you need to build a successful career. 

“We are already seeing many good restaurant and pub operators being forced out of business. Politicians of all parties need to realise there is only so far they can squeeze before they do real, lasting damage to one of the jewels in the crown of Britain’s economy.”

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Mr Blair, managing director of Buzzworks, expressed concern over the business rates system as he flagged cost pressures.

He said: “We’re operating against a tough backdrop in Scotland, from energy and labour increases to a non-domestic rates system that can disproportionately penalise hospitality businesses when they invest.

“Hospitality is a major economic contributor, supporting jobs, supply chains and thriving town centres. We want to strengthen the fabric of Scottish hospitality overall and help make our country an even better place to visit. To do this, we urgently need a rates approach that properly recognises that value and supports investment in our industry, rather than holding it back as it currently does.”

In spite of the undoubtedly difficult backdrop for the sector, The DRG and Buzzworks were able to report significant growth in revenues. And both are focused on continuing expansion.

Mr Blair last year took control of the Buzzworks family business when he led a management buy-out supported by London-based Alchemy Partners, with the Ayrshire-based restaurants and bars group highlighting at that stage its “mission to become a £100m-plus [turnover] Scottish hospitality company”. Buzzworks, which employs more than 800 staff, has a 22-strong portfolio of venues including Scotts in Troon, Greenock, Largs and South Queensferry, and Vic’s & The Vine in Prestwick.

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Ayrshire entrepreneur Sir Tom Hunter’s West Coast Capital remains an investor in Buzzworks, which last Tuesday reported revenues of £37.3 million for the 53 weeks to May 4, 2025, up 8.4% on the prior financial year.

The DRG, which is based in Glasgow, was able to report that its “seamless” acquisition of Paesano and Sugo Pasta in May 2024 had seen its overall annual turnover rise by more than £16m to £66m in the year to April 27, 2025.

And that was not all.

The DRG, which has a 25-strong portfolio, increased its operating profits by £1.135m to £7.361m in the 12 months to April 27 last year.

Asked about where its expansion might come in terms of brands and geography, The DRG said: “Despite the challenges the hospitality sector faces, we are still looking to expand, focusing on Paesano, Sugo and Café Andaluz, targeting options south of the Border, building on the success of Café Andaluz in Newcastle. We’ll continue to look at options at good sites in our core cities in Scotland.”

My column in The Herald last Wednesday observed: “After writing about the expansion plans and latest financial results of the restaurant group behind Di Maggio’s and Café Andaluz, and now also Paesano and Sugo, I found myself reflecting on how far this business has come since it was founded more than four decades ago.

“There was quite the buzz about the launch of Di Maggio’s back in the mid-1980s, with its Italian-American theme an eye-catching addition to the restaurant scene in Glasgow.

“The DRG, as the Glasgow-based restaurant group owned by Mario Gizzi and Tony Conetta is branded these days, has had quite the journey as it has weathered recessions, the global financial crisis, Brexit and the coronavirus pandemic.”

The column concluded: “This portfolio of brands and standalone restaurants, as well as The DRG’s major presence across Scotland’s three biggest cities, its move into England, and further plans for expansion, show how the group has not only endured difficult conditions and huge turbulence but thrived in spite of these troubles. So do the financial results of course.

“Paesano and Sugo are exciting additions, and it looks like things are going well so far in preserving what makes these energetic restaurant concepts what they are, as The DRG continues its own exciting story.”

It will be fascinating to follow the stories of The DRG, which saw its average staff numbers rise to 1,200 in the year to April 27, 2025, from 963 in the prior 12 months, and Buzzworks as they continue their individual expansion drives.

In the meantime, amid the undoubted troubles in the hospitality sector, it is heartening to see these two major Scottish businesses on the front foot.