Restaurateurs at a Directors’ Club lunch organised by Jeffreys Henry have heard that after many tough years in the marketplace, the future is looking brighter.
Addressing an audience of directors from Bavarian Beerhouse, The House of Ho, Jar Kitchen, The Truscott Arms and Potli at the accountant’s offices in central London, Horizons managing director Peter Backman said that it had been difficult keeping UK customers eating out.
“It’s tough appealing to an increasingly cost conscious audience, and tough keeping your offer fresh while there’s been a tight squeeze on margins,” he said. “But for the past 12 months or so things have been looking much brighter for many operators. And I believe that’s going to continue for a while.”
Mark Tenzer, partner at Jeffreys Henry, added: “The restaurant and hospitality market is firmly back in growth mode. Many of our clients have posted strong growth over the last year and have started well in 2015, with expansion firmly on their agenda for the year ahead.
“Competition is fiercer however with market saturation (more new opening in London than ever before), sourcing suitable property and soaring premiums and rents.”
Backman confirmed that the upturn had created ever more innovative brands, many arriving from overseas. “Not only from the US this time round, but from Europe – and further afield including the flag carrier for current imports, Five Guys, but also brands like Bubba Gump, Vapiano and a host of others.”
Meanwhile, he pointed out that there were also brands to watch from these stores, including Le Pain Quotidien, Pod, Brasserie Blanc and Benugo.
“Again, not all will succeed but many will – and all are contributing to consumer choice, especially here in London,” Backman added.
Though the brands worth watching weren’t all cited as being in the capital. Those making their way in less fertile ground included Fuel Juice Bars, Turtle Bay, Handmade Burger and Mission Burrito – from three to sixsince 2010.
“At the same time, London-centred brands – of all categories and sizes – are being lured by attractive rents and deals to new and not-so-new shopping centres around the country, such as Trinity, Leeds and Westfield, Bradford,” Backman explained.
Justin Randall, partner at Jeffreys Henry, said that he has seen a surge in new restaurant openings funded with investment through crowdfunding and the Seed Enterprise Investment Scheme (SEIS). He explained the scheme provides private investors with up to 64% tax relief (or 86.5% if the investment fails) through a combination of income tax relief, capital gains tax relief and loss relief.
With competition already fierce across the country, it was suggested that it might get even tougher with big retail players such a Tesco ntering the market through Giraffe and Waitrose developing 96 cafes and planning larger in store restaurants.
“The big food retailers are experts at what they do,” Backman added. “Arguably this could be a move too far for them, but whether they succeed or fail they are determined to give their shoppers every reason to visit their stores. And for that reason they could prove to be formidable competition – and will disrupt the market.”
The event also considered the new allergen laws, which from December 2014 require all operators to provide information on 14 common allergens, including nuts, milk and mustard.
Vitalfootprint founder Yinka Makinde explained: “Providers are required to have available details of the allergens deemed to be the most common and lead to the most potent reactions.”
She warned that there was some confusion among operators due to a lack of guidance. “The guidelines that the Food Standards Agency have provided are a little vague,” Makinde said. “Visiting food businesses it is clear that the interpretation of the regulations vary from one establishment to another. And it’s not clear what the minimum requirement is.”
The regulations state that information must be provided orally or in written form. Makinde advised creating an allergy grid, which provides a tick box of allergens contained in each dish.
“But this needs to be updated,” she added. “Staff must be kept updated with changes to the menu, and the allergy grid must be updated when ingredients change due to specials or supplier issues.
“The requirement of communicating allergy information applies to everyone in the supply chain, so make sure your supplier is giving you all the detail you need.”
Makinde warned that the regulations will be enforced by environmental health and non-compliance can result in large fines.
The next Restaurant Directors’ Club – with a focus on finance – will be held on Tuesday 19 May 2015. Register here