First he changed how we communicate, now Carphone Warehouse billionaire Charles Dunstone is coming for the fast-food industry. Here he talks diets, distrupting and why dyslexia led him to excel
In the summer, the day school exam results came out, Jeremy Clarkson fired off a tweet: “If your A-level results are disappointing, don’t worry. I got a C and two Us, and I’m currently on a superyacht in the Med.”
It was retweeted 68,000 times and earned 150,000 likes. The yacht belongs to Sir Charles Dunstone, the 52-year-old chairman of TalkTalk and founder of Carphone Warehouse. While amused by the cheek (“Does anyone sanction anything he does?” he replies when asked if Clarkson sought his blessing), Dunstone supports the notion that you can achieve mighty things despite flunking school — which he did a bit, although with a B, C and D, not quite as spectacularly as Clarkson.
On Thursday, Dunstone, worth an estimated £1.3 billion, is launching his second fast-food chain, MOD, a “made- on-demand” pizza restaurant, an idea he has imported from Seattle, in Leicester Square. And on Friday he’ll launch the 59th Five Guys hamburger joint, also a US-borrowed chain, around the corner in Tottenham Court Road.
It’s in MOD that we meet. He’s happy (and I mean seriously grinning) in the thick of a private Sunday lunch party for his friends, a glass of red wine in one hand, the other regularly pumped by a procession of successful food entrepreneurs (Tim Steiner of Ocado, Will Ricker of La Bodega Negra, Matthew Herman of Boujis — which itself is soon to be turned into a Five Guys).
Certainly Dunstone has maintained a reputation as a fierce thrower of parties. He gives multiple dinners each month in his large home in Holland Park, as well as house parties in his “relatively normal” place in Norfolk, and “dangerously fun” trips on his superyacht Shemara, which was originally built in 1938 and entirely restored by Dunstone. His wife, Celia, clearly shares his stamina and general cheeriness. She’s here today with their three small children. So why on earth has this prosperous telecoms giant turned to restaurants, which, of all things, are always described as a tricky investment?
“Opening a chain of retail shops would be the brave thing these days,” he counters, “because so much is about online.” The great thing about food, “is that you have to be here to eat it. The world has changed. People now spend more money on experiences: going to see something at the cinema or theatre, or to do something — and then they want to get reasonably priced, quality food together.”
We both look down at his pizza, which is particularly small compared with everyone else’s, and a little bare given that at MOD you can have as many toppings as you like. I wonder if he’s on a diet. He explains that he does the 5:2, which means he can eat as many pizzas, burgers and chips as he likes for five whole days. For the remaining two, I suppose, he could always go to Leon, that other disrupting new(ish) chain, which sells healthy, low-calorie food.
Actually, he says, that’s the point. “If you walk around the West End now the real growth is not in fine dining, it’s in accessibly priced, good-quality food. The sector called “fast casual”, he says. “It’s a real revolution.”
The reason Dunstone knows his businesses make as much as the bigger more expensive restaurants is because he sat down in The Wolseley and did the maths. “I thought: ‘How does this work?’ All these people stay in there for an hour, maybe an hour-and-a-half. Someone in Five Guys will be there 20 minutes. So in the same hour we’ll have done four servings, which probably works out about the same [in turnover].” I imagine him scribbling on the napkin.
Of course Dunstone likes disruption. His fortune began with £6,000 that he and school chum David Ross used to launch Carphone Warehouse in a friend’s flat in Marylebone in 1989. It was the beginning of the mobile revolution.
Since then it’s not always been plain sailing (which he loves too, incidentally). For instance, last year TalkTalk was hacked by a 17-year-old who accessed the account records of some 156,000 customers. Criticism from the Information Commissioner’s Office was accompanied by a hefty £400,000 fine and profits subsequently halved to £14 million. More recently the company share price rallied on the back of the regulator Ofcom’s announcement that BT and Openreach, which share infrastructure, should be split apart.
But Brexit, Dunstone expects, will be another seismic change.
Will his prices to go up? “All the beef for Five Guys comes from Ireland and we pay in euros, so of course it’s got more expensive,” he says. “We have to work out whether we absorb that extra cost or change to a UK beef supply, which we’re working on now. It’s a component, but for now it won’t affect the prices.”
The same can’t be said of electrical goods, from phones to televisions, which, he says, will go up in the New Year. “Although technology itself is always coming down, so maybe prices will go up, and then won’t come down as fast as we’re used to.”
It’s unpredictable, of course. “The pound has had its best 10 days against the euro since Brexit,” he says. “What I feel about Brexit is that it’s a little bit like we’ve jumped off a 100-storey building and have just passed the 50th floor and we’re saying, ‘Actually this isn’t so absolutely terrible’ — but we haven’t hit the pavement yet.”
In the past, friends have included politicians, not least two former prime ministers, Tony Blair and David Cameron. Indeed, he wrote an article in 2015 encouraging people to vote Conservative because he believed it was better for the economy. It was Cameron who gave him his knighthood in 2012.
That said, he hasn’t put money behind a political party. “I’ve never been a donor. If I believe in someone I try and help them myself. I think there’s something quite sinister about rich people behind the scenes, particularly in the US. And that’s helped create the situation we’re now in.”
He doesn’t know anyone in Theresa May’s Cabinet. “I’m happy at the moment just to be a citizen and not involved,” he says, but describes the “profound change” in politics at the moment as “crazy” and “muddled”.
“You have to assume that things will eventually normalise,” he argues. “At the moment people are thinking if they choose the crazy option everything will change. I suspect nothing will change and then they’ll get disillusioned and we’ll return to normal again.”
Somehow Dunstone has always retained a reputation for being nice. He carries an Oyster card and is down-to-earth in that middle-class, slightly Tory dad way of being perfectly happy in the squarest possible outfit. (Today he’s in three shades of blue: navy zip hoodie, polo shirt, chinos). “I haven’t got a very big ego,” he says and you can tell — in the nicest way — that he’s not vain.
Dunstone puts his resilience in business in part down to his dyslexia, which meant school — Uppingham — and academia weren’t where he naturally succeeded. “They said I didn’t work hard and I was lazy because I was bored in classes.” He describes his mind as “like a butterfly”.
He refuses to think of the condition as an excuse. “It would be a mistake to make dyslexia a problem. We should celebrate it. You’re different but you’re not disadvantaged. If you make a child feel, ‘Oh dear, yes, it’s difficult for you’, their expectations will be artificially lowered. If you’re a bit dyslexic, in the end it doesn’t matter.”
In business he excelled because he loved his job. “In later life [dyslexia] can be great for imaginative, productive people because they come up with loads of ideas and are creative.”
While his fingers are still firmly in the pies of his original businesses, food is definitely Dunstone’s future.
With MOD he is ruthlessly taking on the old chains, those that concentrate on squeezing margins and hard selling, “where you ask for some jalapeño peppers and they say, ‘Yeah, that’s an extra 80p’. It seems so mean-spirited. Mainstream high-street chains have become complacent and relatively expensive, while basically selling bases that taste like rubber and goat’s cheese that tastes like soap.
“People want to understand where ingredients come from and not to have freezers and microwaves involved. They want to choose their own pizza, they want it cooked for them, they don’t want it pulled off the shelf in a bag.”
A further swipe at the older chains is his policy of not advertising, which Dunstone inherited from Five Guys in America. “The view is that in the modern world every time you advertise you undermine the credibility of the brand. Reputation is spread by recommendation: word of mouth. That’s as authentic as you can be. I’ve always loved new ideas and new projects. I think it probably makes me better at doing everything to have something new going on as well.”
He also likes the fact that his staff are “from all walks of life and all parts of the world — it’s a wonderful melting pot. Inside a business like this xenophobia and hatred of migrants is a mad world away, because they’re decent people who just want to work hard and earn a decent living.”
Does he believe, like Pret A Manger founder Julian Metcalfe and Jamie Oliver, that foreign staff work harder than the English? “Yes. That is always the case when people are motivated to leave their home country to find something better. They are go- getters.”
He confides that he’s doing another food chain, although what it will sell is still a secret. “What I will say is that I like this category. I really do. We do a few things in my office but food is… yes, what I enjoy.”