Multiple Tabs2018-12-18T10:47:30+00:00

Another big one bites the dust.

Earlier this year saw, to no one’s unalloyed surprise, the last slice of the pizza as the Jamie Oliver Restaurant Group, which includes Jamie’s Italian, Fifteen and the Barbacoa restaurants, called in the administrators.

At a stroke, another 1000 hospitality sector jobs disappeared from Britain’s High Streets, adding to the dismal total racked up recently by other UK restaurant chain casualties such as Carluccio’s, Byron, the Gourmet Burger Kitchen and Prezzo.

However, does this mean that the casual diner, on whom the health of the sector depends, is going to be wandering the streets in a fruitless search for polenta and a prosecco? Not a bit of it.

Because while the chains have been hammered by a perfect storm of over-rapid expansion, rising rents, business rates – not to mention food, utility and wage costs –the final nail has often been vigorous competition from a revitalised independent restaurant sector.

As the chains close their doors, well managed, on-trend, individual restaurants, often family-owned, have been hurrying them on their way with unique offerings which are flexible, friendly and suited to the neighbourhoods in which they operate.

In Glasgow, Finnieston is the obvious case in point, there are no corporates in the city’s buzziest restaurant district. Similarly, in areas peripheral to the CBD, independents are making inroads as the chains abandon the heart of the city.

The same applies to the more affluent suburbs, with a mix of independent options, some of them surprisingly sophisticated and successful, catering for a huge variety of different appetites.

With hindsight, it is easy to say that the mid-market chains sacrificed a lot of the initial attraction of their offering in the madcap scramble for market share. Ferocious competition for prime sites quickly added to the damage.

But while economy of scale can justify fast-paced expansion, it reduces the ability to react quickly to changing circumstances. Reviving a whole group can be prohibitive, and many previously popular operators were starting to look tired, with a dated service offering.

Will the sites that the chains vacate in the city centres be inhabited by a new breed of independent – capable and ambitious enough to begin the cycle all over again? It seems unlikely.

Many central sites are often too large and “soulless” to appeal to the independent operator and risk remaining empty unless they can be sub-divided and put to an alternative use. The rating revaluation of 2017 is still a sore point in the industry and the national minimum/living wage continues to spiral upwards. VAT continues to be an onerous burden.

But some independents have proved that they can provide an offering as good as, and often substantially better than, the household name UK players. This is proof that demographic analysis and spreadsheet-based analytical business modelling is no substitute for experience, a keen instinct and a refined sense of local trends.

The privately-owned small restaurant or bar has always been much more prevalent in Scotland than south of the border. The growth of multiple outlet, corporately owned, branded chains was beginning to change the profile of the leisure property offering and ownership in Scotland, aligning it more with the English model.

But there are signs that this trend is being reversed, and I think it is a consumer driven reversal with customers showing a preference for the more versatile, customer focussed, reactive type of business that independents can provide.

So while the independents have been faced by the same issues as the chains, it is turning into something of a tortoise and hare story. The indies are winning the day, and people who enjoy eating out in places with individual flair have something to celebrate.

Alan Gordon is DM Hall’s Principal Commercial Partner and is based in the firm’s Glasgow North office.

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