Why are so many of Britain’s high-street restaurants closing? According to the Insolvency Service, the number of restaurant closures is up by a third this year. Some 1,123 restaurant companies have gone under since January. Mid-market chains have been the worst affected. This year Byron, Gaucho, Carluccio’s, Gourmet Burger Kitchen, and Jamie’s Italian have all entered administration or credit agreements, having tried to grow too quickly. Sir Terence Conran’s Prescott & Conran group is also in trouble.
Some have blamed Brexit and millennials, the usual scapegoats. High rents and business rates, especially in central London, are unrelated to the referendum, but it is true that a weaker pound and uncertainty for EU nationals have hurt restaurant margins and made it more difficult to find staff.
The charge against millennials is harder to stand up. A report in the Times yesterday blamed the collapse on “fickle diners”, who prefer pop-ups or high-concept new restaurants to high-street chains. These fickle diners were previously known as “discerning customers” – especially at free-market loving newspapers. From a market perspective, young people are flexible, curious and well informed. Eating out is expensive; it’s hardly a surprise they are picky.
Where their parents might return to the same average curry house or ersatz brasserie, a new generation has grown up on cheap travel around Europe, easy recommendations through social media, and the ability to quickly check on their phone if there is somewhere better round the corner. There is almost always somewhere better than Jamie’s Italian.
While it is tempting to see the collapse of the high street as a one-off, partly it is an ancient tale of oversupply. Thousands of restaurants have opened in recent years. Many, including some of the high-profile failures, have been fuelled by speculative private equity funds. These investors travel the country looking for “concepts” to “roll out”. The logic is obvious. Restaurants cost a lot to outfit and open. A large cash injection allows for rapid expansion, while scale offers savings on cost. Inevitably some will fail. Looking at the fallen, it is hard to feel too sad. Gaucho, Byron, GBK and Carluccio’s have been sorry experiences for years. If Brexit or millennials have played a part in the demise of these chains, that’s entirely in their favour.
The question of what makes a good restaurant – whether it is a neighbourhood favourite or a global chain – is more complicated. Hospitality is an elusive quality. Partly it is in the details. Pret, Wetherspoons and McDonald’s are popular for much the same reasons as Rules or the Ritz or the pizza place round the corner: reliability. You know what you are going to get every time you go in. Other restaurants thrive on novelty: it is hard to imagine a branch of Otto’s, a restaurant in Clerkenwell where the proprietor crushes a whole duck in front of you in a silver press, on every high street.
Every restaurant, however, has had to factor in the rise of the delivery services Deliveroo and Uber Eats. Their success has contributed to the difficult trading conditions on the high street but created opportunities, too. In ordering from them, you get the same food as in the restaurant, at the same prices, but without the hassle of leaving the house or the risk that a waiter is having an off day. The atmosphere at home is always the same. This is self-fulfilling, in some places. An endless stream of helmet-clad delivery drivers traipsing through your favourite ramen bar can be offputting. But the range available through these apps highlights one of the key aspects of today’s market: whatever your price point, there is no longer any excuse for a bad meal.
For successful operators who want to spread their wings, the trick is how to grow while remaining hip. It is a tricky balance. Dishoom, the small Indian chain, routinely has queues for breakfast, lunch and dinner at each of its sites. For now, they have just about kept their cool, at least outside Hackney, but it will be interesting to see how long that lasts.
Not everyone seeks this kind of growth. One of my favourite local restaurants, Max’s Sandwich Shop in Crouch Hill, London, has a concept – delicious homemade sandwiches – that is eminently roll-outable. Its owner, Max Halley, has no doubt been deluged with offers, but the man won’t budge. “For me, the purpose of running a restaurant is for it to remain a joy, not become something bigger on a broader scale that has to have all its margins crushed to make any money at all,” he says. “Surely one busy restaurant is better than five less busy ones? I don’t understand why people do it to themselves.”
I remember the first time I went to Byron, in 2009 or so, around the time the restaurant woke up one morning and found itself famous. There were only a couple of sites. I had read the fawning reviews and was excited to try it. There was a buzz in the room. The staff were cool. The burger was delicious. I went back, but over the years it grew less and less reliable. The courgette fries, once hot and crispy, became increasingly slug-like. In time, I stopped going. Other, better burgers were available at the same price. Times are tough for British restaurateurs, but for diners they have never been better.
There are plenty of reasons restaurants are closing: oversupply, rates, rents, the cost of ingredients, staff shortages, diminished quality. They are not closing because of pop-ups, and nor is it the fault of the paying customers, millennial or otherwise. Perhaps more of these places would survive if they paid attention to the cardinal rule of hospitality: the guest comes first.
• Ed Cumming is a freelance feature writer
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