http://www.bloomberg.com/apps/news?pid=20601088&sid=a7dUvs.Kler0&refer=museShrinking bonuses and expense accounts spell trouble for London restaurants already hurt by the collapse of Lehman Brothers Holdings Inc., chefs say.
“When Lehman Brothers collapsed, we were all privately crying in our offices,” said Richard Corrigan, who owns Corrigan’s Mayfair. “They were a great client to restaurants.”
Restaurateurs from Anthony Worrall Thompson to Tom Aikens have closed eateries. Vineet Bhatia has dropped expansion plans for Urban Turban. Gordon Ramsay has shut Foxtrot Oscar and the Devonshire for two days a week.
As many as 50 venues might fall victim to the slump, according to Sara Stewart, a partner at Jeffreys Henry LLP, the accountancy firm whose clients include Ramsay. She says some restaurateurs were slow to adapt and are now paying the price.
How bad can it get? Bloomberg asked London chefs and restaurateurs about the impact of the recession and their feelings about the industry’s future. Here’s what they said.
Tom Aikens (Tom Aikens, Tom’s Kitchen): “In terms of lunch, Mondays and Tuesdays are less busy. Breakfast at Tom’s Kitchen has increased and we’re averaging over 300 covers for brunch on weekends, also up from last year. Trade is better than expected. There are loads of discounts on Web sites such as Top Table, so people will probably turn to booking online.”
Jason Atherton (Maze, Maze Grill): “There’s a slowdown in private dining, but restaurant bookings in Maze and Maze Grill have held up well. We’re full most lunches and dinners toward the end of the week. But who knows how bad this is going to get? No chef can afford to be complacent.”
Vineet Bhatia (Rasoi Vineet Bhatia, Urban Turban): “Urban Turban is struggling and even Rasoi has been hit, though seems to be OK. There’s a lot of cost cutting and we are trying to cut shifts for staff. It’s everywhere, not just us. I hope it will start to come back but it’s a question of survival for the next few months, keeping your head down and cutting costs.”
Claude Bosi (Hibiscus): “Lunch has most notably been hit and fewer people are booking ahead. The bookings are increasingly for smaller parties. I can see the next six to eight months being tough. The most important thing is to keep focused. Key things are looking at our current trading days, seeing if there’s any leeway on pricing and being careful not to overstaff.”
Richard Corrigan (Corrigan’s Mayfair): “Since Lehman, we’ve become a lot more conscious of the overheads and cost of running our restaurants. We’ve also upped staff training for this challenging period. The restaurant industry in London is an efficient, lean, mean machine with dedicated people. We’ll see this recession through as we survived the last one.”
Chris Galvin (Galvin Bistrot de Luxe): “Although average spend has dropped a little, numbers are holding strong. We take it week by week and continue to look after our customers. It’s a shame that the decline has coincided with many exciting openings and that the growth of new talent will be checked. There is a lot of fear due to the unknown, but our outlook remains positive.”
Stuart Gillies (Boxwood Cafe, Gordon Ramsay Plane Food): “Most affected are wine sales and private dining. We’ve had to tighten our operation and cut our overheads significantly to counter the drop in revenue, but we did this three months ago. Those who waited are suffering greatly. The next year will be about value for money, tight controls and good old hospitality.”
Rose Gray (River Cafe): “We’ve been lucky enough not to have been too affected. The positive publicity we received following our reopening in October has continued to fill tables and the cheap pound has encouraged Americans and Europeans to visit more. We are concerned but we think customers will keep coming to top-end restaurants that have delivered excellence.”
Henry Harris (Racine): “The slowdown has affected us in a small way in that the average spend on wine has dropped but, bizarrely, the average spend on food is up. There are going to be some casualties either because they aren’t that great or through bad luck, but restaurants who make customers think that they’re getting value and their custom is valued should do well.”
Philip Howard (The Square): “We are definitely not as busy at lunch as we are seeing fewer business lunches, though we are full today. The outlook isn’t good but there will always be customers out there for restaurants that are serving delicious food, and are offering value for money.”
Rowley Leigh (Le Cafe Anglais): “Evening trade from Monday to Wednesday is performing worse than lunch. A lot of people are going to suffer. One has to assume that there will be a positive impact on the industry as companies become leaner and better-run. Good restaurants offering better value will come through, while overpriced, mediocre restaurants will not.”
Sinead Mallozzi (Sketch): “The revenue of our restaurants is in line with last year and our bars have never been busier, with revenue up 32 percent. We saw a downturn in corporate-events bookings in the final quarter but this has picked up and we’re on track with our forecasts. Restaurants that offer value for money, great customer service and consistent food should be OK.”
Shane Osborn (Pied a Terre, l’Autre Pied): “We expected a real downturn in January and February but at Pied a Terre we’re down only 2-3 percent and l’Autre Pied up 20 percent. Wine spend has been good but we’re not seeing the big hitters from the City. Having said that, a couple of weeks ago we had a table of six that spent 5,700 pounds ($8,625). There’s been such an explosion of openings that it almost needs balancing out.”
Jacinta Phelan (Oxo Tower, Prism): “We have been lucky at Oxo and are going strong. I feel positive about this year for both venues. We haven’t experienced a drop in average spend which tells us that the customer wants a great time out. I’m concerned about the industry from a creative perspective. Hard times will make it difficult for small independents to survive.”
Gary Rhodes (Rhodes Twentyfour, Rhodes W1): “Rhodes W1 has been hit, not so much Rhodes Twentyfour, but January has been good for us at Rhodes W1. What people are doing is looking at the concept and style of lunch and using food that can be served at more competitive prices.”
Michel Roux Jr. (Le Gavroche): “This is the worst downturn I’ve seen, far grimmer than most people have experienced. We’re trimming staff and being careful with costs, but bookings are looking good. The drop is minimal but there has been a drop in alcohol spending. People are going straight to the table instead of stopping in the bar and buying Champagne.”
Mark Selby (Wahaca): “We’ve seen a large increase in business compared with last year and are trying to bring prices down more to give the customers what they want. Affordable restaurants, and even some premium-price restaurants, can still do well as long as they offer value for money.”
Will Smith (Arbutus/Wild Honey): “People were slow off the mark with their December-Christmas celebrations and what is normally a record month was compacted into a busy two weeks. January was again slow to get going and we are seeing an emphasis on less wine consumption, tap water instead of mineral and more people taking our lunch menu instead of the a la carte.”
Dominic Teague (1901): “People will still pay for quality, for a night out with dinner and bottle of wine. They just might not have the most extravagant bottle. A good restaurant operation is about being smart with the produce, regardless of any crisis.”
Marcus Wareing (Marcus Wareing at the Berkeley): “The slowdown has made me more aware -- conscious of waste, making sure margins are right, seeing what we can do to bring customers in. We are not offering lots of cheaper menus, we already have the 35-pound lunch menu but we are ensuring that the customer receives value for money. This slowdown will shake up the industry. In some ways it is a good thing as it makes us all think more. We need less moaning and more positive action.”
(Richard Vines is the chief food critic for Bloomberg News.)
To contact the writer on the story: Richard Vines in London at
rvines@bloomberg.net.
