Is the demise of restaurant chains a good thing for local independents?
The Gaucho restaurant group is the latest in a list of chain restaurants to appoint administrators or announce restructuring and branch closures. The news, including the closure of their 22 Cau restaurants follows on from the restructuring of Jamie’s Italian, Prezzo, Café Rouge, Byron and Strada.
In my home city of St Albans, recent restaurant closures include Jamie’s Italian, Brasserie Blanc and several independents. Question marks and ‘To Let’ signs hang over the doors of Prezzo and Carluccios. Findings from accountant UHY Hacker Young that 35 of the UK’s top 100 restaurant groups are now loss-making – up 75% since last year.
So are these chain closures a good opportunity for independents like my restaurant Loft? No, I don’t believe they are. While every day I hope customers choose to dine with me or my independent neighbours rather than the chains which fill my city, their demise is nothing to celebrate. It’s a mirror on the challenges of the industry we all face.
Seeing the restaurants of my old bosses Terence Conran and Peter Prescott close as Prescott and Conran fell into administration was a shock to me. Lutyens, Albion Clerkenwell and Les Deux Salons were impressive operations with great food. Knowing Terence and Peter, absolute masters of their field, were having problems made me focus on the crisis rippling through the industry.
Rent, rates, staff and food costs have dramatically risen as customers express more caution in spending. We’re not just competing against chains, but with supermarket deals and takeaway services giving the option of a cheaper night a food and wine.
My background is in quality independents before running my own eateries and working at larger, quality restaurant operations including Conran Restaurants, Harrods and Peyton and Byrne. But I have never been sniffy about large food chains. As they exploded onto the market, they offered consistent quality at a good price with staff who were well trained. In many ways they improved standards in the industry and offered more choose to customers who became used to dining out more often than just for celebrations. The chains changed the whole dining scene in the UK. Eating out became as popular a leisure activity as going to the pub. They created jobs in communities and filled many a high street vacancy.
So what’s gone wrong? As the chains were bought by investors, then sold on to further investors, the landscape changed. The plush, modern interiors started to look worn and unkempt without recent investment. Training budgets dried up and staff cared less about a company they didn’t feel emotionally connected to. Margins on food were squeezed meaning portions got smaller and ingredient quality dropped as financial teams continually squeezed the bottom line. Many chains simply stopped offering a good product which is value for money.
Customers are savvy. They won’t stand for shoddy food at higher prices with sloppy service. But chain issues are also our issues. I’m having to evolve the business month by month. I’m making operational changes faster than ever before in my 30 years’ experience in the industry.
My newest restaurant Loft, had to be way off the high street – we’d have never afforded the rent and rates – higher in St Albans than in central London. I use a cheaper reservations system – not one which charges me over £2 per head for every cover we book. We don’t spend a fortune on a selection of uniforms in line with staff roles. When an ingredient suddenly increases in price (a frequent occurrence right now) I remove it from the menu rather than just reduce the portion size. When snow or heat leads to cancellations we use social media to remind people we’re open.
But as an independent restaurant owner there is one thing we will never change. Our total dedication and commitment to making sure every single customer who walks through our door gets the best quality food and service we can give.
Nick Male is the chef / director of Hertfordshire Restaurant of the Year 2018, Loft restaurant in St Albans
