It’s not new news, a number of well-known restaurants have been hit hard during the tough trading climate, forcing many into administration.
Renowned entrepreneur Luke Johnson stated that “the whole of the food sector in the UK is under pressure at the moment”. February reports of 2018, reinforced the gloomy words of Johnson, as restaurants didn’t feel love in the air on Valentine’s Day but instead felt the devastation of high volumes of empty tables.
The storm continued in March as up to a third of businesses were empty on Mother’s day due to no-shows.
But what could be the cause of this downturn and how can restaurants bounce back and beat what is coming ahead. “2018 is going to be challenging for restaurants, and they need a tightly-run ship to survive” warns Sarah Humphreys, Lead partner of casual dining at Deloitte.
Impact of Brexit
Brexit is seen to have been one of the prevailing factors that is causing this wave of uncertainty.
Official government figures reported early warnings of EU workers leaving Britain since the referendum, with net migration figures in Britain dropping since records began.
Sourdough pizza restaurant Franco Manca warned that Brexit is already making recruiting staff harder.
New Living Wage
The national living wage has been an ongoing issue within the hospitality industry.
Last year Kate Nichols, chief executive of ALMR said that ‘unpredictable cost pressures were negatively affecting eating and drinking margins.’
She further mentioned that increases in the national living wage could threaten investments and put jobs at risk. Many businesses are struggling to meet these requirements while ingredient costs have inflated.
There are a number of other factors that has contributed to the tough times of this sector however could there be bigger concerns. An opportunity for delivery-only services has emerged as businesses open their doors to partnering up with delivery giants like Deliveroo. Managing director of 25-story Vietnamese restaurant brand Pho said “delivery is here to stay, it’s a threat and a challenge but let’s not hide”.
Two Dubai-based restaurants, have taken the leap of faith with this venture and have joined forces with Deliveroo to make their first debut operating in the UK. A Deliveroo representative said; “we’re already in discussion about further cross-border partnerships and are keen to hear from any other restaurant businesses looking to get involved.
Could this be good for the economy and an opportunity for cross-border partnerships with countries outside the EU after Brexit renegotiate trading deals?
However, not all restaurateurs are keen on the uprising trend, having reservations for the future of actual restaurants. Jerry Goldberg Co-Founder of Clockjack Oven said “This is critical for the whole restaurant market and could have huge implications”.
Some businesses see this as a means to help reach a greater target audience, and the changing trends in customer behaviour.
The latter’s management said “for some people pizza is the ultimate takeaway, while others see it as a casual dining out option, so working with Deliveroo just allowed us to please as many people as possible” said Michael Dench, the chains operations director.
Maybe restauranteurs, that are not keen on delivery- only services should start considering the future prospects of partnering up with recruitment agencies in aid to source quality talent both permanent and temporary. This could help control and tackle restaurant staff shortages and lift some pressure off the shoulders of restaurant owners.