The casual dining crunch continues, but is there light at the end of the tunnel?
Writing in Big Hospitality this week, Tony Naylor gives ten reasons to be positive. Yes, a number of casual dining chains are in crisis, with site closures and restructuring the order of the day. But out of crisis comes opportunity: Redundancy is delivering good quality staff back into the market. Small independents then pick them up or they become self-employed and start “doing their own thing”.
Tired Italian offers like Prezzo, Strada and Jamie’s Italian are being replaced by fresh new dining concepts directed at the millennial market, with more focus on food quality and provenance.
Landlords are having to deal with huge rent reduction negotiations, which is likely to have the effect of reducing rents nationally, which can only be positive. Property developers will have to re-think the tenant mix in town and city centre developments – research consistently shows that customers cite independents as their favourite restaurants.
Private equity and cheap debt are being blamed for having thrown huge sums at brand roll-outs in recent years, now beginning to fall apart. Investor confidence has been badly damaged, but in our view will definitely survive.
I spoke recently at the Global Restaurant Investment Forum (GRIF) in Dubai about the success of Darwin & Wallace, the Imbiba backed bar/restaurant chain, whose concept is the re-interpretation of a 21st century London pub, with a focus on contemporary design and comfort. The company has been trading for five years, in that time they have opened five sites – the sixth opening soon. Finding the sites has been difficult and has required patience and discipline. The company has not paid excessive premiums for sites and is not in a rush to expand at any price. Another factor which has favoured Darwin & Wallace is the absence of a cookie cutter approach. Instead, independently developing each site.
So, the “take-aways” seem to be as follows:
- Take great care over site selection and as a result, do not pay too high a premium for sites.
- Avoid branding as much as possible. Treat each branch opening as unique and focus on your local customer needs and tastes.
- Only the best staff will do. Look after them, reward them and make sure they project the image and ambience you want.
- Test your concept rigorously to ensure it satisfies today’s customer and earns high scores on social media.
Professional restaurant investors are watching and waiting but for concepts which tick these boxes. We believe there will always be funding available.
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