Ashley De Safrin is a business adviser for the hospitality sector at Business Link in London, which offers free advice to businesses across the capital. He spoke to Gemma Sharkey about the London Restaurant Barometer, which launched last September
Caterer What is the London Restaurant Barometer?
AshleyDe Safrin It looks at how restaurants in the capital are performing month on month. Operators fill out a short survey and this enables us to gauge the ups and downs of the sector. It also enables restaurants to identify problems, both those common across the sector and those more specific to them.
Caterer Why did you launch it?
ADS The hotel industry is kept up to date with monthly occupancy and average revenue per available room reports from PKF and TRI, but we realised there wasn't an equivalent for the dining sector. I meet a lot of restaurant owners and they are always keen to know how others are doing in comparison.
Caterer How does it aim to help restaurant operators?
ADS It enables operators to see what is happening in the market and how they are performing against other restaurants. It's like a free business health check, as we're funded by the London Development Authority, a non-commercial, impartial organisation, so businesses can get one-to-one advice.
Caterer Recent findings show that 30% of restaurant businesses are no longer profitable. How concerned are you about the London dining scene?
ADS I am concerned, but on a more positive note, 70% of operators are turning a profit. The strain on the restaurant industry is massive at present and costs are going up so I suspect the number of casualties will rise in the coming months. But those restaurants that have adapted are managing very well. Some more established restaurants are complacent and it's the one thing they shouldn't be. They find it difficult to take a fresh look or pursue uncharted territories, but everybody has to adapt during this recession.
Caterer What are the most common mistakes businesses make?
ADS Blanket discounting is dangerous as it's very difficult to bring the prices back up when things improve. A lot of restaurants are offering specials, which is driving footfall and turnover but not necessarily profitability. Operators will have problems if they continue to offer deals that aren't sustainable. It is vital for them to understand the importance of the bottom line and they need to target offers more carefully.
Caterer What do successful businesses have in common?