Alliance of Independent Restaurants

Chains are a threat to London’s vibrant small restaurants

Chains are a threat to London’s vibrant small restaurants

Alliance of Independent Restaurants

WE READ your recent article with interest [“London nearly at ‘peak restaurant’ as closures reach an all-time high”, November 7] .

London is a gastronomic success story that rivals any capital city but we agree that there are now almost too many restaurants vying for trade.

Every business in any commercial sector takes its chances in the economic survival of the fittest. We are now seeing unprecedented levels of restaurant closures but not simply because of sheer numbers.

Over-expansion and risky borrowing has seen off some well-known high-street chains. Each closure has been documented by the media but we mourn the loss of the many small independent businesses that do not warrant newspaper inches.

Such restaurants have not closed due to excessive expansion or negligent management but because of ever-increasing rents, extortionate rates and spiralling raw-produce costs — costs forced up by scale-hungry chains prepared to pay ridiculous premiums to dominate high streets.

The fabulous culinary success of this city is built on the hard work and creative spirit of the independent operator. Every chain started with a single shop. We urge London’s diners to support the independents.

Paul Merrett
Alliance of Independent Restaurants

Editor's reply

Dear Paul

THE rise in restaurant rents and business rates — Philip Hammond’s recent gesture towards small operators will not impact usefully on the sector — not to mention increased staff costs, mandatory pension schemes plus competition in hiring arising from the prospect of Brexit, are not helpful to the restaurant business. It always will be a tough market where a profit margin of 10 per cent is viewed as an acceptable result. Probably a certain amount of schadenfreude infects the news around the demise of over-exuberant groups and chains but well managed they serve a purpose.

Independent restaurants reap the rewards of an ingrained eating out habit and definitely benefit from the chatter that arises on social media. My reviews mention seven or eight independent ventures every week.

Readers do support independents. They queue around the block to get into the latest thrill ride.”

Fay Maschler
Restaurant critic

This article originally appeared in the Evening Standard.


Alliance of Independent Restaurants

South East restaurant operators optimistic despite the ‘casual dining crunch'

South East restaurant operators optimistic despite the ‘casual dining crunch’

Alliance of Independent Restaurants

Leading South East law firm Thomson Snell & Passmore recently surveyed clients operating in the UK restaurant sector to gauge the overall sentiment regarding the challenges being faced by the mid-tier dining industry, dubbed the ‘casual dining crunch’.

Respondents were composed of independent restaurant operators in the South East of England and London-based agents also took part in the survey. The overall feedback was positive with the majority of respondents adamant that there will be opportunities for their businesses. In response to the question: “Do you see opportunities for your business (and those of your clients) emerging from the ‘casual dining crunch’?”, over three-quarters of the respondents (83%) answered with an optimistic ‘yes’. Delivery services are being developed by independents and chains alike to respond to client demands.

The 18 survey respondents identified the causes of the ‘casual dining crunch’ as detailed below:

  • Over half of the respondents (67%) deemed this to be the result of oversaturation of the market;
  • 17% said that the ‘casual dining crunch’ is a result of consumers getting bored of big brands and wanting to support local/independent restaurants instead;
  • Only 5% of respondents feel that consumers want to try a ‘new’ experience; and
  • 11% believe that the current challenges being faced by the sector is a natural dip in the cycle.

Other findings in the survey included:

  • 64% of the 14 restaurant operator respondents identified both attracting/retaining staff and the cost of supplies as their most significant post-Brexit concern; 29% said it was solely the cost of supplies; and 7% highlighted no concerns post-Brexit; and
  • 71% of the respondents answered that they are dealing with the business rate increases by incurring the cost internally, whilst just over a quarter (29%) are passing the cost, or a portion of the cost, on to customers.

The UK restaurant sector is currently experiencing a period of change and adjustment. The industry is seeing the disappearance of existing brands who are struggling to meet rising costs, including staffing, however, this is balanced with the emergence of new brands and the growth of independent restaurants. Millennials who are a key demographic for eating out are more than ever before in tune with what they want and restaurant operators are responding. This is demonstrated by restaurants’ increasing engagement with social media platforms such as Twitter and Instagram.

Mark Hillier, Director of real estate firm DMR Property, who participated in the survey, observed: “We are seeing a landslide adjustment in the UK restaurant sector.” He predicted that, “We will start to see more exciting new brands offering better quality and diversity entering into the market.

Alisa Sweeney, Commercial Property Partner at Thomson Snell & Passmore, who led the survey, commented:

The key takeaway from this survey is that despite the challenges and oversaturation in the UK restaurant sector, otherwise dubbed the ‘casual dining crunch’, local independent restaurants see room for revival and opportunities for their businesses.

The survey findings, especially the responses from the restaurant operators, are very positive and show that it’s not all doom and gloom. The shifting sector is paving the way for smaller independent restaurant operators to establish themselves in the marketplace.

There is an abundance of opportunities for independents and chains alike to reassess their concepts and strategies, and to develop and grow their businesses. From innovating delivery services to trialling new dishes, restaurants who are willing and ready to adapt to change can continue to attract new customers.”

Ends

For more information contact:

Clementine Hay, Byfield Consultancy, [email protected] or 020 7092 3991.

Charlotte Eberlein, Thomson Snell & Passmore, [email protected] or 01892 701301

Survey Respondents

  • The 18 survey respondents consisted of 13 based restaurant operators based in the South East of England, one restaurant chain operator and four London-based agents.
  • The turnover of the restaurant operator respondents:
    • 92% have a turnover of over £100,000;
    • 8% fall within the £50,000 to £100,000 turnover bracket; and
    • One respondent opted not to disclose this information.

Thomson Snell & Passmore LLP

  • Thomson Snell & Passmore LLP is one of the largest firms in the South East outside London with over 240 people including over 130 lawyers advising private individuals, directors, PLCs, subsidiaries of overseas companies, SMEs, owner managed businesses, local authorities and charities.
  • We are ranked by the leading independent guides to UK law firms in 29 specialist practice areas and are proud to have in our teams 26 lawyers recognised as “leaders in their field”.
  • With offices in Tunbridge Wells and Thames Gateway the firm has earned a reputation over generations for continuously aligning itself with clients’ ever changing needs, providing intelligent and practical legal advice and delivering exceptional client service.
  • The commercial group provides advice on mergers and acquisitions, commercial contracts, employment law, dispute resolution and to those involved in land acquisition, development, planning and construction.
  • The firm’s private client group is one of the largest in the South East offering leading expertise in property, family, tax planning, trust management, probate, clinical negligence and personal injury and Court of Protection.


Alliance of Independent Restaurants

Sustainability in restaurants

Sustainability in restaurants

Alliance of Independent Restaurants

When facing endless rises in variable costs alongside the impending issues brought on by the B-word, being forthcoming with sustainable practices is often put on the back burner.

The recent lightbulb moment and external pressures have seen a sweep in plastic straws being replaced by cornstarch, as well as a novelty saving to the consumer when they bring in their Keep Cup for their coffee – never has it felt so smug to carry around a reusable mug. It’s not enough anymore to write a pretty blurb on the menu citing the happy life of the pre-steak cows, fit for a child’s bedtime story. Consumers want more – they know more too – but what does it really mean to be sustainable and how can it be done?

The next generation

Firstly, let’s look at the younger age groups and the burgeoning pressure that will only heighten with the wash of new generations. Children in primary schools are taught about the different bins for the separated rubbish, whilst some adults are still slow to recycle their waste. 9 out of 10 Gen Z students believe that restaurants should create a menu that helps them make sustainable choices and 81% of them will choose a restaurant based on the environmental impact of the menu, according to a Hardens survey done on behalf of the SRA. For a generation whereby social media and all things digital will be part and parcel of their lives, recycling and their environmentalism will also be ingrained. People are finally ‘woke’ as consciousness and social awareness hits the mainstream.

“81% of Gen Z will choose a restaurant based on the menu’s environmental impact”

Hardens

To be a successful restaurant in 2018 and beyond, your business plan needs to have a CSR section, as it would marketing or finance. Sustainability covers everything from how you treat the planet, to what’s on your plate as well as how you treat those people who are in your business, either visiting or working. It’s good for the environment and it is good for your business in the long term.

The latte levy

The ‘latte levy’ was declined which seems strange considering single-use plastic bags usage reduced by 85% in the first 2.5 years following the 5p charge, according to the Guardian, showing that the general public listen and, collaboratively, is a force to be reckoned with. Habits are altered and benefits are manifested. You only need to read the stats behind the 156.6% rise in reusable cups in the first six weeks of a Starbucks trial that charges customers 5p for ordering drinks supplied in a paper cup, according to Propel.

Food wasters

Food waste is another bigger, and rightly so. However, use this to your advantage and see commercial gains, like Skye Gyngell at Spring. Her 3-course scratch menu is just £20 a head, giving a lower entry price point to an otherwise premium menu, opening Spring up to the price-conscious theatre-going audience, selling them creative reincarnations of food otherwise destined for the bin. This menu alone has resulted in 40-60 additional covers between 5.30-6.30pm – a time when the restaurant was previously empty, according to Big Hospitality. Apps like Olio can also help you dispose of your food waste ethically and easily. They will arrange for their ‘food waste heroes’ to pick up your leftovers and will distribute accordingly. Food waste can also be avoided when cooking nose to tail like Neil Rankin who is leading the way in his no holds barred approach to cooking an animal.

“9 out of 10 Gen Z students believe that restaurants should create a menu that helps them make sustainable choices.”

Hardens

On the other end of the spectrum, you could increase the amount of veg on the menu and each individual plate. Eating more plant based is friendlier for the environment and is growing in popularity for those opting for vegan and flexitarian lifestyles as it’s healthier too.

Reducing your restaurant’s carbon footprint can be done by offering more local produce. We’re an island nation so appreciate that the monotonous UK climate does not afford many everyday items such as lemons, olive oil, oranges – to name just a few. However,  shopping seasonally, where possible, can result in locality. It also encourages regular menu changes, giving consumers choice and diversification – necessary in this world of reduced attention span and the constant need for renewal.

Be kind

Kindness is king: Hackney coffee shop, Second Shot, employs people who have been affected by homelessness, they train them up and help transition them on to long-term employment elsewhere providing an apprenticeship that serves everyone. Redemption Roasters is another socially responsible company, giving ex-offenders a step up and training to reduce their chance of reoffending. They were approached by the ministry of justice to help with this initiative. These are just two examples of businesses giving people a leg up.

Packaging is such a minefield and needs to be tackled with often a lot of research and defiance; Research to find suppliers offering products in recycled AND recyclable packaging as well as defiance to insist that your key suppliers understand and offer this. A good company for this is London Bio Packaging who offer a range of quality compostable and recyclable products.

It’s enjoyable to see timely and relevant pop-up cafes emerge to wave the environmental flag. Most recently, Ecover’s Rubbish Cafe and Percol’s ‘most sustainable coffee shop’. These interesting concepts included (respectively) payment with plastic – packaging not cards – and a hooked up pedal bike demonstrating, to any willing participant, the energy needed to power a coffee machine for just one cup(it’s a lot and completely exhausting, in case you’re wondering).

It’s a journey so start slowly. Organisations are there to help, like the Sustainable Restaurant Association. There’s that old adage of ‘not eating ingredients that your grandmother wouldn’t have heard of’ – let’s flip that on its head and contemplate ‘what would our great grandchildren do’ as, after all, the future is theirs.