The fab forecast

The Swallow hotel's Olivier's restaurant was awarded an AA rosette several months after the 146-bedroom hotel opened last August. The accolade, which missed this year's guidebook, puts the restaurant in the minority in Liverpool. But executive chef Gerard O'Sullivan is already ambitious for a second rosette.

His most pressing challenge is to build lunch trade, which is dominated in Liverpool by pizza restaurants and pubs. The 109-seat restaurant sees about 500 covers for dinner a week at an average spend of £25, but only sees 100-150 covers at lunch. To beat this, O'Sullivan has introduced a business menu priced £16 as well as a buffet at £10.95.

"The fashion in Liverpool is for informal dining," says O'Sullivan. "Here we do both."

Some 40-45% of diners are hotel guests and 50% of those are in the city on business. Average achieved occupancy in the four-star hotel is £60 and occupancy is 60%.

Rumour has it that US chain Bloomingdales is to launch a Made in Liverpool department at its Manhattan store. Heady stuff for a British city that many associate with crime, unemployment and a sixties band whose four members moved away as soon as they made some money.

But does Liverpool still deserve its poor image? Many of the owners of the city's new wave of restaurants would say not. They point to the increased interest of heavyweights such as Bass, Wetherspoon's and Yates's Wine Lodge, the Holiday Inn Express which opened in Albert Dock at Easter and the string of regeneration projects funded by European cash under the Objective One programme. These include the £90m face-lift of Queens Square, which kicked off with the opening of the £14m Swallow hotel last August and which is being followed by a number of pubs and restaurants.

Regeneration

It is this flurry of activity that has spurred on independent operators such as Martin Ainscough, a former brewery analyst in the City. "We've dovetailed with the regeneration," says Ainscough, who opened the upmarket, 130-seat Ziba restaurant with his sister Helen 17 months ago.

The Ainscoughs have invested heavily in what they've identified as a growing dining-out trend in the city. To create Ziba, the pair sank £175,000 into the freehold of a former car showroom in Berry Street, on the edge of Chinatown, and then spent a further £250,000 to turn it into a design-led venue.

They are confident that property prices will soar and expect to benefit from the fact that Ziba is in the Rope Walks quarter, an area earmarked for development. "We're building a long-term business," says Martin.

And it's not their only investment in Liverpool. The Ainscoughs have been running Number Seven Café and Deli in nearby Falkner Street since 1995, and have a pub and microbrewery. The business, which includes operations outside Liverpool, was launched on redundancy pay and family money.

Unpredictable

Unwilling to talk figures, the pair say Ziba is starting to make a profit. They concede, however, that business is unpredictable. Friday and Saturday nights can notch up 40 to 100 covers, and lunches throughout the week anywhere from 20 to 50 covers. On nights when they have a live band, however, they generally serve about 120 covers.

The à la carte menu offers a selection of modern British, Oriental and Mediterranean dishes, with dinner garnering £30-£50 a head depending on the time of the week. The Express menu, at £10.50 for two courses and £13.50 for three, targets office workers at lunchtimes and theatre-goers in the evening.

Ziba's customers are professionals from local businesses such as the trendy ad agencies on nearby Rodney Street. But the restaurant also attracts academics from Liverpool John Moores university as well as performers from Sir Paul McCartney's "fame school" LIPA and the Philharmonic Hall.

It's an eclectic mix, although, as Martin concedes: "We appeal to different markets because we haven't got enough of one market to go all-out for."

He admits that trade takes a hit when the universities close and says Sundays and evenings can be difficult. "There's not a huge residential population in the city - a lot of people who work in Liverpool live on the other side of the Mersey tunnel, so there's a barrier to coming back in the evenings."

To tap into this market, the Ainscoughs hope to develop a restaurant with eight bedrooms in Birkenhead, although the project is stuck at the planning stage. But their faith in Liverpool's potential is such that they are about to sign on another restaurant in the city centre.

Not everyone sees the city as a potential goldmine, however. "There's scope in Liverpool for better food," says Martin, "but a lot of people ask us why we're bothering to do anything up north."

It's this attitude that entrepreneur Kate Cowie and her two partners took advantage of when they launched the Coffee Union coffee bar in Bold Street in May 1998, pipping Starbucks to the post. They've since opened a second Coffee Union in Exchange Street this May and reckon there's scope for three or four more.

"We came to Liverpool from London because there is so much going on here and it is under-catered for," says Cowie.

Another first is claimed by Neil Corlett, who along with a couple of partners chose Liverpool to launch the San Francisco Wrap Co last July. The store on North John Street has borrowed the smoothies and hot wraps idea from the USA. Wraps are priced £1.95-£3.50 and about 75% of business is take-away. To take advantage of Liverpool's love affair with the club scene, the shop stays open until 2am on Friday and Saturdays.

"I am amazed how progressive Liverpool is," says Corlett. "People are much more receptive than I thought they would be."

Another new venue benefiting from Liverpool's popular club and bar scene is Blue Bar & Grill at Albert Dock. Mike Gutmann and his son Rob opened the trendy venue a year ago. Taking the opportunity to cash in on Liverpool's "24-hour city" licensing policy, customers can eat in the 200-seat restaurant, lounge around drinking coffee in the sofa areas, or pose at the massive concrete slab of a bar until 2am before hitting clubland.

It's a formula that seems to work. Some 70% of trade is repeat and Friday and Saturday nights are so busy that VIP cards are issued to regulars to beat the queues. Mike says he's taken aback by the demand, predicting that Blue will turn over a staggering £4m this year. "It's not good - it's phenomenal. We would have been happy with £1m-£1.3m. In January, February and March I was expecting to do £25,000 a week and I was doing £50,000-£60,000."

Some 40% of Blue's business is food. The European menu leans towards shared food such as tapas, attracting about 160-165 covers a night and 50-80 covers at lunch. Aware that value for money is important in Liverpool, Mike's happy with an average bill of about £15 a head for dinner. "If they spend £20, I'm disappointed," he says, adding "there's plenty of spending money in Liverpool".

And with 10-11% unemployment in the city he has no real staffing problems. His 80 staff account for 23% of outgoings - lower than the 26% he had budgeted for.

The Gutmanns, whose company the Lyceum Group also owns Taste, a café-bar and restaurant across the dock from Blue, plan to open another restaurant in the city this year, and Mike says he would welcome competition from other new restaurants.

As for gangland violence, extortion and drug rings, they do exist. Liverpool's restaurateurs, however, regard it as more of a problem for the clubs. n