Britain's evolving food and drink preferences
Giraffe and Ed’s Easy Diner have recently announced the closure of 27 of their 87 restaurants, as part of a company voluntary arrangement (“CVA”).
Tom Crowley, chief executive of Boparan Restaurant Group, the chains’ parent company, has asserted that the proposal to enter a CVA is necessary to protect the companies, adding: “The combination of increasing costs and over-supply of restaurants in the sector and a softening of consumer demand have all contributed to the challenges both these brands face.”
These measures are typical of the restaurant sector of late. In early 2018, Deloitte warned that restaurateurs should seriously consider the adaptability of their models to changing consumer tastes and to reduced luxury spending resulting from Brexit uncertainty.
According to accountancy firm Moore Stephens, 1,219 insolvencies in standalone and investor-backed chain restaurants were recorded in 2018, compared with 985 in 2017. Chains like Byron, Gaucho and Gourmet Burger Kitchen all shut down branches in 2018, whilst Jamie’s Italian, Prezzo and Carluccio’s have all been forced into voluntary arrangement processes following initial restaurant closures.
Rising costs, current abundance of choice for consumers and the influence of social media fuelling growing interest to experience a wider variety food and cuisines in more ‘unique’ settings mean that restaurants are required to work increasingly hard to persuade customers to dine with them.
Notwithstanding facing similar issues, the pub and bar sector has seen declining closure rates over the past year. This is in part due to the unusually hot weather and World Cup success experienced by Britain last summer. A further contributing factor is the rise in popularity of artisanal spirits, cocktails and craft beer, which has resulted in greater interest from trade and private equity buyers in quality wet-led pub and bar assets.
An adaptable business model to take advantage of the latest food and drink trends coupled with experience oriented social media marketing appear to comprise the tools available to restaurateurs in combating closures and reigniting investment in the current economic climate.
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George Bogle also assisted with this article.