2018 has been a tough year so far for the casual dining market, with closures across the whole of the UK. The mass market areas of Italian and Burger restaurants have been worst hit with closers and CVAs hitting the news seemingly on a weekly a basis.
So why now? What has happened to hit the market so badly? In a recent article in FT Weekend Magazine, Jamie Oliver was very candid about the reasons for Jamie’s Italian struggling to stay afloat and having to go down the CVA route. He believes that they were opening too many restaurants, too quickly and not necessarily in the right locations – often in non-university towns that didn’t have a good tourist trade. This, coupled with an overcrowded market with too many operators peddling the same wares, high rents, high rates, a poor pound and increasing labour costs all combined to create the perfect storm and pull down the group.
It’s an interesting juxtaposition; Jamie’s restaurants against the rest of his estate. Turn on the television and you’ll see current programs on two nights of the week as well as many re-runs on channels like Food Network. So why is it that he is so popular with the British public and yet they weren’t pitching up to his restaurants?
There are a number of theories. Firstly, the Italian restaurant market went crazy. Where before there were a few well-known standard pizza restaurants, suddenly the high street was flooded with mid-range offerings such as Zizzi, Prezzo and Strada. There were options that were good quality but also good value – more so than Jamie’s where it was perhaps felt that people were paying a premium just because his name was above the door. All very well if the man himself was in there cooking your dinner for you, but maybe not worth the uplift otherwise. Secondly, there’s the “gimmick” element. Is someone really seen as a serious restaurant owner if they are spending all of their time on the TV and running awareness campaigns? What does that add to your night out? Also, there is such a thing as over exposure, and for a while there, it felt like you couldn’t turn a corner without seeing a poster, a quote, a magazine cover or a TV show without seeing Jamie Oliver.
Other companies have of course suffered too. Prezzo and Strada have both instigated CVAs as well as celebrity chef restaurant chain Carluccio’s, founded of course by the late Antonio Carluccio. Added to this is a host of other restaurants including Byron, GBK, Wildwood and Chimmichanga.
We can only hope that the market has seen the worst now and is close to rebalancing itself. Let’s hope that 2019 will be a much more positive year.