Many defunct UK restaurants should have followed this recipe for success

Several establishments have closed over the past 12 months but Covid, Brexit and rising energy bills are not always responsible

Restaurants that managed to survive the pandemic, thanks to government support, are now facing a new challenge. EPA
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Figures from accountants UHY Hacker Young show that 1,406 restaurants in the UK closed their doors in the 12 months to May, up 64 per cent on the previous year.

Restaurants are faring worse than the wider hospitality industry, which recorded a 56 per cent rise in insolvencies over the same period.

Research by the same company discloses that about two thirds of the country’s top 100 restaurants are operating at a loss. Debt repayments, lack of staff caused by Brexit and rising energy bills are being blamed.

The sector was looking forward to a recovery in profits after the pandemic, says UHY Hacker Young, but this is now threatened by rising food inflation and a fall in consumer confidence as the cost of living crisis bites.

Peter Kubik, partner at UHY Hacker Young, said many restaurateurs were anxious about further falls in demand as Britain moves closer to recession.

“It may be a case of ‘out of the frying pan, into the fire’ for many UK restaurant groups,” Mr Kubik said.

“They expected, and needed, higher consumer spending as we put Covid further behind us, but this spending is now likely to fall when it is needed most.

“Pressure is rising on the restaurant sector every day. More and more of them are shutting their doors as a result.

“Restaurants that only just managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and consumers who simply cannot afford to spend as much.”

I don’t doubt the UHY Hacker Young findings. Walk down any high street in Britain and you will find a boarded-up restaurant or two or three.

But I would insist that it is not so simple. At the start of his TV show, Kitchen Nightmares, chef Gordon Ramsay usually does two things. He inspects the cleanliness of the kitchen and he looks at the length of the menu.

Gordon Ramsay-Bread Street Kitchen Atlantis The Palm-SHRTLIST Efraim Evidor/ITP Images ;21-01-16 Gordon Ramsay-SHRTLIST;Gordon Ramsey

Invariably, in a restaurant in crisis, a filthy, unhygienic kitchen points to a lack of discipline, to staff, an executive chef in particular, not being on top of the business.

It is amazing how often the former is accompanied by a long, over-elaborate menu, signifying a management whose ambition outweighs their ability to deliver.

Where I live, I can say with a degree of certainty which restaurants are doing well and which are destined to fail.

Walks with my dogs at night and peering through the windows (I know, I can’t help myself, it’s the nosiness in me) normally confirms the assessment.

I can tell you that the local branch of Cote is pretty busy; and as for the expensive gastropub, the jury is still out — despite it having recently been the subject of a rave press review. The upmarket Asian fusion joint is doing all right, while the family-run, always friendly, Thai is booming.

It is clear: some places are thriving, others less so, and some a lot less so. Into this last, doomed category falls the new, “gourmet” Indian restaurant on the corner. It surely cannot have long to go.

What this says is that those restaurants that apply rigour and discipline, that know their audience and treat them well, will get through and even turn in healthy profits; those that don’t will suffer and perish.

It is fascinating, though, why they don’t see it for themselves. On my evening perambulation, I will observe the staff at the empty Indian restaurant, sitting at a table at the back looking forlorn.

A recipe for restaurant success

I would like to take them and walk them a few hundred metres along the road. They could stare, presumably open-mouthed, at a restaurant where the tables are taken by people eating, not by staff with nothing to do.

They could examine the shorter menu (the Indian one runs to pages and pages). They would be able to compare the pricing and ask themselves why their prices are so much higher and is that difference justified or is it them being greedy?

They could look at the lighting and ambience, and ask why is the Indian room so brightly lit when the crowded restaurant’s is softer? Oh, and one more, they could count the tables and ponder why, in their restaurant, they’re all uncomfortably squashed together and here, they are not?

Could it be that they want to cram in the customers, that they set out to chase a buck, instead of delivering a good experience?

Many restaurants fall into the trap of trying to cram in too many tables. EPA

None of this has anything to do with Brexit or the climbing cost-of-living. It has everything to do with common sense, with business acumen, an eye for detail and putting the customer first.

To turn it round would not require the redoubtable Ramsay to go in, turn the lights down, chuck out several tables and chairs, crop the menu by two thirds and reduce the prices (then, he could tackle the kitchen, because if that is the restaurant, you are left wondering what the back of house is like).

On second thoughts, it might need Ramsay. Because the current management clearly do not see what everyone else can see. Heads must be knocked together, fast, before the badly-run Indian joint is marked down, wrongly, as yet another failure caused by Brexit and the economic backdrop.

Published: August 10, 2022, 9:18 AM