This has been a frenzied couple of weeks – the sale of Wagamama to TRG, which hasn’t been particularly well received by analysts for some reason, Rooney leaving Greene King, restaurant closures rising one-third across the country, GBK closures, another part of Living Ventures going through a CVA, CDG’s approach to landlords on the front of The Sunday Times, Graham Ford joining Carluccio’s, more news about Patisserie Valerie and Pret, the sale of three Tiger Tiger sites to Deltic. I am sure more has happened and, from conversations I’ve had, there is much more to come.
No operator I’ve met in the past few weeks has told me life is anything other than tough. Even those who have seen strong like-for-like growth said it had come at the expense of margin, particularly if driven by delivery.
Places I frequent often seem to have become a lot quieter lately. Lina stores in Covent Garden had spare tables at lunchtime yesterday, which is unheard of. I could get a table in the evening at Drake & Morgan in King’s Cross, Kettners was beautiful but sparsely populated, Dean Street Townhouse felt only 50% full at lunchtime and the Pret queue was one deep not three. These are all good, consistent and popular locations so I hope it was just a one-off and not representative of trade in November. However, I am concerned.
There are exceptions, of course. As usual they were queuing outside Dishoom, Bill’s in Covent Garden was packed, you couldn’t move in Mr Fogg’s in St Martins Lane and this week JD Wetherspoon announced 5.5% like-for-like growth.
As recently reported by Propel, pub entrepreneur Karen Jones, who was brought in as executive chairman after the restaurant closures, said Prezzo was better positioned but market conditions were still tough. She said: “It’s no longer about expanding, it’s about being better at what we do and building like-for-like growth. The ones that will succeed will be those that deliver price, quality and service.”
Of course she is absolutely right – but that has always been the case. No operator has been able, certainly during the past few years, to deliver sustainable long-term growth (never mind short-term growth) without getting their pricing and value for money right, delivering a consistent quality product, and having great service – these are the foundations of our sector. They are a given and now customers expect more.
One commentator this week told The Times social media was accelerating changes in consumer tastes. “Chain restaurants are particularly vulnerable to changing consumer fads,” the commentator said. “What was once flavour of the month can quickly go out of fashion.”
So social media is having a negative impact on our sector because it celebrates the new and chain restaurants are likely to close because they aren’t new and can’t keep up with trends? It’s an interesting argument with perhaps a grain of truth in it. The need to offer the customer fresh experiences (above and beyond consistent offer delivery) is not a new concept, it has been around forever in the development of new and existing brands in our sector
Social media, though, has undoubtedly upped the stakes. I find the briefs we receive always reflect the tone and feel of the market at that moment. We are currently working on 19 briefs given to us by SMEs (and bigger groups) and many of them are asking us to look at how their brands can deliver differentiated, exciting and compelling experiences for their customers. Focusing on this area will not transform like-for-like sales declines but it might go some way towards a more positive performance and hopefully provide the industry with brighter news in the future.