Every week 10,000 people call the Fat Duck, a tiny, 40-seat restaurant to the west of London in the hope of securing a table in its intimate dining room.
The restaurant, in a Berkshire village on the banks of the Thames, first opened in 1993 and came to prominence about eight years later when its owner, the renowned chef Heston Blumenthal, had won two Michelin stars for his self-taught and highly original deconstructed gastronomy.
The trade at Bray is exceptional but all over London the restaurant industry is enjoying a remarkable boom that has more than overcome a short-lived blip caused by the collapse of Lehman’s Bank five years ago.
Despite much turbulence on UK high streets, 25 per cent more restaurants opened in London last year than 2011 and the economic contribution of restaurants and catering grew by 13 per cent from 2010 to 2011 to £25bn. The number of people employed in the sector now amounts to 1.5 million and the industry created 58,000 new jobs last year – more than any other sector.
According to the British Hospitality Association, the hospitality industry was responsible for creating just over a quarter of all jobs created between 2010 and last year. Now responsible for 2.68 million jobs, hospitality is the UK’s fourth-largest industry.
“London has been growing, for many years as an increasingly influential eating out place. We are going through a golden era in terms of quantity and quality of restaurants. In terms of innovation, London is right up with New York and has probably pipped it,” says Peter Backman, the managing director of Horizons, a company that provides data and analysis on the hospitality industry.
New York is often regarded as the foremost city chefs and foodies look to.
“The quality [in London] has vastly improved on 10 years ago and is far and away better than it was 20 years ago. Then you could get good food in London but you had to hunt for it, Mr Backman says.
“Even the quick service offer – at the lower price end of the market – has improved dramatically.”
Despite austerity, people have continued to eat out. National chains in the mid-range of the market – such as Wagamama and Pizza Express – now offer better quality and more choice. The fancy burger chain Byron, which has 34 branches in and around London, has just been sold by its owner to a financial investor for £100 million (Dh593.3m).
A Steak in the Economy, a study produced this year by the food start-up foundation Kitchenette, reported that five new restaurants open every fortnight in London. Mr Backman thinks that figure is a conservative one.
But the restaurant business is a tough one and rising costs, including for rent, rates, food and energy, are still causing casualties.
The chef Fergus Henderson, known as the “king of offal” opened the St John hotel and restaurant in Leicester Square, in the heart of London’s theatre district in 2011. However, in less than a year it had gone into administration.
“For every 10 restaurants that open in the UK, something like seven or eight will fail. In London the ratio is a little better – perhaps four or five for every 10 will fail, but it is still a risky business,” says Mr Backman.
Statement restaurants such as Jason Atherton’s Berners Tavern and Heston Blumenthal’s new London offering Dinner are opening at about the rate of one a month and it can take months to book a table at a reasonable hour on a Friday or Saturday in the latest places.
For every landmark new development, office block or residential building, there is also at least one and often two new restaurants. At Heron Tower, one of the City of London’s latest towers, there is Duck & Waffle. At the Shard, western Europe’s tallest building, which is owned by Qatar, there are three new restaurants – Oblix, aquashard and Hutong.
While at King’s Cross, where Google is building its new 1 million square foot headquarters, The Grainstore restaurant, from Bruno Loubet, is the latest must-visit place, competing with Shrimpy’s, which has set up in a former BP petrol station, Plum & Spilt Milk, next to the station and the Gilbert Scott and other restaurants at the five-star St Pancras Renaissance Hotel.
Peter Wetherell, the managing director of the upmarket Mayfair estate agent Wetherells, says restaurants are used by developers for “place-making”, as an effective short-cut to attract the right sort of tenant. His firm has completed research into the relationship between top-rated restaurants and property prices in the capital.
Wetherell’s survey found high-quality restaurants can make an address sought after and help enhance nearby residential property values by some 15 to 20 per cent.
It analysed residential property values in five West End districts: Mayfair; Marylebone; Fitzrovia; Soho; and St James’s. Prime London’s property market has surged in the past year, but in some districts, for instance the Mount Street area of Mayfair – where Scotts and Le Gavroche restaurants are – values have increased by more than 60 per cent, some 20 per cent higher than growth seen in other West End postcodes where there are not so many Michelin-starred restaurants.
“A great restaurant like Scott’s or 34 has the power to make an address famous and turn it into a destination,” says Richard Caring, the chairman of Caprice Holdings and one of London’s most successful restaurateurs. In 2005, the billionaire businessman paid £31.5m to take over Caprice Holdings, the owner of The Ivy, Le Caprice and J Sheekey, as well as the Italian restaurant Daphne’s, the Vietnamese restaurant Bam-Bou and the Moroccan Pasha restaurant.
“There are lots of examples of how good restaurants have transformed an address and helped residential values increase dramatically,” Wetherells says in its report.
“The construction of the Twenty-First building – which houses London’s Cipriani restaurant – transformed Davies Street from a place people passed by into a destination. The penthouse above the restaurant was valued at £1,400 per sq ft 12 years ago. It has just been sold for £4,000 per sq ft,” it adds.
Knight Frank, an international estate agency, has also examined the correlation between restaurants and property values in central London. It found prices near Michelin establishments, such as Blumenthal’s two-star Dinner, at the Mandarin Oriental in Knightsbridge, have increased by 149 per cent between 2003 and this year.
Property values within 250 metres of Gordon Ramsay’s three-star eponymous restaurant on Royal Hospital Road in Chelsea, have increased by 133 per cent in the past 10 years. That means properties close to these prestigious restaurants are outperforming the estate agent’s prime central London index, which rose by about 129 per cent over the same period.
There has been a revolution in London’s food scene, which has helped to put restaurants and new locations on the map. London’s twin obsessions of eating out and property are inexorably intertwined with new restaurants, bars and cafes often heralding the gentrification of yet another district.
The industry itself is realising its importance to the economy and coming of age. It has started a campaign to create 300,000 additional new jobs by 2020.
Blumenthal likes to tell diners the story of an old lady who greeted him in Bray as he put the finishing touches to his restaurant in 1993 with a shake of her umbrella. “We’ve closed the others down and we’ll close you down,” she said.
How wrong she was.
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