Here’s my three-course fix for stopping restaurants closing
PUBLISHED: 17:39 25 September 2019 | UPDATED: 17:39 25 September 2019
Copyright: Archant 2019
Restaurants are closing all the time, but Andy Newman says they can survive, with three simple fixes
There is an old joke in the hospitality industry, that says it's easy to become a restaurant millionaire. All you need to do is invest two million in a restaurant, and before long, a million is what you will have left.
Because most of us like food, and we are all seduced by the glamour and decadence of letting someone else cook our dinner, and then having it placed in front of us without us having to lift a finger, that the idea of running a restaurant has always been a romantic one.
Which foodie hasn't dreamt of running a popular little bistro, one half of the couple effortlessly turning out delicious dishes from the kitchen, while the other basks in the warm glow of happy customers front-of-house?
The reality, of course, is rather different. Running a restaurant can be a brutal, health-sapping, all-consuming business. Where romantic ideals are quickly overtaken by unreasonably demanding customers, acres of red tape, staff problems, unreliable suppliers, and above all financial ruin. It's a wonder anyone wants to do it at all.
According to a report published last week, the number of restaurants going bust shot up by 25 per cent last year, with 1,410 establishments biting the dust - that's nearly four every day. The number of closures is running at double the level it was just four years ago.
Norwich, of course, has not been immune from this trend, with big-name chains such as Jamie's Italian, Café Rouge, Carluccio's and Giraffe all shutting their doors in the past few years. Alongside this, we have seen independent restaurants squeezed, although the casualty level here seems smaller - and we will return to why that might be in a moment.
There are certainly some simple economic reasons why the hospitality industry is seeing such carnage right now.
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The crash in the value of sterling since the Brexit referendum has vastly increased the price of many ingredients. Meanwhile the relentless increase in the minimum wage, coupled with growing employer pension contributions, has made staff costs rise well above the level of inflation.
In the bigger picture, this is not necessarily a bad thing, if it lifts our lowest paid workers out of poverty. But if we as consumers are not prepared to pay more to reflect these cost pressures, we consign restaurants to ever-lower margins, which is many cases is the straw which is breaking the camel's back.
And there is no doubt that in these uncertain political and economic times, more of us are holding onto our cash while we wait and see if our politicians can sort out the mess which is Brexit.
But perhaps the biggest contributor to the growing number of restaurant doors closing permanently is a failure by too many restaurants to reflect our changing habits. In general we don't want formal three-course meals anymore; increasingly, we want flexibility, small plates, healthier food, less alcohol and a more relaxed environment.
In a market where there is so much over-capacity, becoming out of touch with what your customers want is fatal.
That is why the casualty rate is much lower among independent restaurants - when the owner is local and close to their customers, they can instinctively know how tastes are changing, and be flexible enough to deliver that. When a restaurant is controlled by a bunch of accountants in a London boardroom, the natural reaction to problems is to cut costs, and that can never give the customers what they want.
Although it was inevitable that, in a market where there is over-capacity and falling demand, we would see closures, I take no pleasure at all in the fact it is happening (although I take some comfort that those independents staying true to themselves seem to be taking less of the pain). Anyone who loves food wants to see a vibrant restaurant scene, and have a good choice of places to go out and eat.
So what can we do to alleviate the situation? First, we must accept that margins have for too long been too tight. If we want good food and good service, and we want the people who provide that to us to be fairly paid, then we must accept that the cost of eating out has to rise. Constantly expecting 'two-for-one' deals which effectively mean restaurants are operating at a loss is simply not sustainable.
Secondly, we need to stay loyal to those who deliver a good experience, instead of constantly seeking out, sheep-like, the 'next big thing'. How many places open in a blaze of publicity and social media enthusiasm, only to be empty six months later?
And finally, we must stop sitting on our money hoping that the uncertainty will go away, and instead get out there and spend it with our local, independent restaurants. If we really are going to hell in a handcart, we may as well enter through the fiery gates well-fed.
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