10 reasons to be positive about the "casual dining crunch"

By Tony Naylor

- Last updated on GMT

10 reasons to be positive about the "casual dining crunch"
We are in the middle of a so-called casual dining crunch. But could chaos among the chains be positive for small indies?

No news, they say, is good news. But sadly, this year, the restaurant industry has been bombarded with endless terrifying headlines, such as ‘troubled’ chains like Prezzo and Byron shutting sites, shedding jobs and entering 2018’s must-have arrangement: the CVA. 

This has been reported as the most visible, big-name manifestation of the extraordinary pressures currently facing all restaurants. That is true. But the chains have actively contributed to this mess and, arguably, the fallout from it could yet prove positive, particularly for independents.

Within this restaurant Armageddon, here are 10 reasons to be happy:

1) A lot of chain employees are about to find themselves on the dole. Guaranteed, by September, we will be reading stories about next-level burger trucks manned by ex-Byron staff or ex-Jamie’s Italian chefs doing serious southern Italian pop-ups.

2) A glut of well-trained front-of-house staff entering the job market may offer temporary relief to indies struggling to recruit capable staff – at supervisory and management level, too.

3) It is no coincidence that Prezzo, Strada and Jamie’s feel pasta their best. In the past decade, operators piled into the casual Italian market without ever considering a) that Britain’s appetite for poorly differentiated Italian restaurants might be finite or b) the fierce competition such herd-like behaviour creates. The industry is learning a harsh lesson from that, hopefully.

4) Private equity takes many forms, but blame for the casual-dining crunch can be laid, in part, at the door of those funds (and other owners drunk on cheap debt), which expanded brands too fast across too many sites, in the hope of an early exit. After years of bankrolling this market distortion, a new wariness among investors can only be positive.

5) The current situation should also (don’t hold your breath) cast doubt over the whole concept of expansion. It may be possible – hands-on management; centralised training; reliable suppliers – to run four or even 24 sites successfully in a relatively limited geographic area. But when has a sprawling national presence ever improved a restaurant’s product?

6) Historically, food quality was a minor concern for the chains. Brand recognition and competitive pricing were all. But in the recent debate around the casual-dining crunch, the public has shown itself to be sensitive to any perceived deterioration in food quality and a consequent lack of value for money. That mood offers a clear opportunity for quality indies competing in the same market.

7) Scandals on everything from tipping to meat provenance also appear to have bred a new cynicism about chains. Ethical indies need to be enthusiastically vocal about how they differ.

8) With multiple chains negotiating huge rent reductions nationally (while simultaneously lobbying Government over business rates hikes), there is some hope that, eventually, indie operators may get some relief on both fronts – if they can stay in business that long.

9) In recent years, as retail migrates online, F&B has been hailed as the saviour of our dying city centres. Clearly, this is not true. You cannot create a vibrant destination by squashing loads of samey restaurants into an area. Long term, this must trigger more intelligent developments, in terms of density and tenant mix, which should benefit smaller, quirkier operators.

10) As Jamie’s Italian illustrated, any brand tied to a star name can lose its pulling power as that star’s profile changes or they become remote from the business. Such hype and its failures can only burnish the relative authenticity of independent operators.

This column first appeared in the April 2018 issue of Restaurant magazine, the leading title for the UK's restaurant industry. For more features, comment, interviews and in-depth analysis of the restaurant sector subscribe to Restaurant magazine here.

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