Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

London restaurants warned against over-discounting

10 March 2009 by
London restaurants warned against over-discounting

Restaurants in the capital are in danger of over-discounting to drive footfall in the recession, an industry analyst has warned.

Ashley De Safrin, tourism and hospitality specialist at Business Link, said that while London restaurants are still busy thanks to a wide range of special deals being offered, problems could start to arise.

"A lot of restaurants are offering specials, which is driving footfall and turnover but not necessarily profitability," he said.

"Operators will start to have problems if they continue to offer deals that aren't sustainable and we may well start to see an increased number of restaurant closures in the next quarter."

De Safrin added that operators need to be adaptable and focus on changing menus to maintain margins and removing those costs that don't add value.

"The hotel industry has learnt its lesson from the last recession and is generally avoiding blanket discounts but the restaurant sector still has a lot of lessons to learn," he said.

Business Link's latest London Restaurant Barometer revealed that 60% of restaurateurs in the capital experienced a drop in takings, footfall and customer spend in January.

The survey, which questioned more than 130 operators across London, found that two thirds of restaurateurs in the capital said that January was down compared with last year, with 20% down more than 25%.

One respondent said he was "very worried" about 2009. "I didn't think our area would be so affected as the interest rate cut would benefit those with large mortgages," he said. "This is counteracted by chain restaurants doing deals which we can't compete with."

January takings drop at 60% of London restaurants >>

Good customer service more important than price in restaurants >>

Restaurant and pub chains see rise in like-for-like sales >>

Restaurant barometer to help restaurants battling recession >>

Hotel revpar forecast to plummet by 19% in 2009 >>

By Kerstin Kühn

E-mail your comments to Kerstin Kühn here.

Caterersearch.com jobs
Looking for a new job? Find your next restaurant job here with Caterersearch.com jobs

The Caterer Blog](http://www.caterersearch.com/blogs/catering-news-blog/) Catch up with more news and gossip on the Caterer Blog here
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking