Luke Johnson: Majority of investors have "lost interest" in restaurants

Speaking at the UKHospitality conference in London this week, he said there were more investment opportunities compared to two to three years ago as “virtually all private equity has washed its hands of the sector”.

Johnson, who founded Strada and previously chaired PizzaExpress, is currently partner at Risk Capital Partners - which backs Patisserie Holdings and Gail’s parent company Bread Holdings.

“Nine out of ten private equity groups have lost interest in the industry completely, and I would say most of the banks are reducing their exposure across the board,” said Johnson.

“Turnarounds are where the biggest opportunities will lie in the next year or two, but turning around an ailing restaurant/bar/café business is not easy, not many people have done it over the years.”

He told the conference he was optimistic about the future of the restaurant industry, despite its current challenges.

“We’re continuing to roll out and grow our existing businesses,” he said. “It remains a £100bn market across all segments. People still go out to eat and drink every day, I don’t think that’s going to change.

“The margins that were attainable eight to ten years ago are gone. I think competition is the biggest factor there.

“[But] I’ve seen much worse trading conditions in the past. The boom is over, it may get worse, it may stabilise. If you’re a good operator you’ll probably succeed in the long run.

“Do ordinary people stop buying a coffee or a meal because of Brexit? I don’t think so.”