Innovation in the eating out market is just as notable in the regions as it is in London, argues Piper’s Peter Kemp-Welch.
When it comes to publicity, there’s no comparison. If you’re opening a 20-cover restaurant and wish to make the loudest noise possible, head straight for Soho. The space might be cramped, the chef hopeless, the food almost inedible, but the fact you’re slap-bang in the centre of London will mean people hear about you. The mainstream press will inevitably come calling.
Now try opening a new restaurant offering something better and a bit different in Birmingham, Manchester or Liverpool. Will it make the same national media impact? Hardly. In fact, in terms of profile and column inches alone, you’d be forgiven for thinking there aren’t any new restaurants or bars outside London at all.
And yet throughout the country, innovation in the eating and drinking-out market is in many ways just as interesting and dynamic as it is in the capital. Whether it’s sashimi in Edinburgh or craft beer in Leeds, consumers have better choice and quality than ever before. But until a restaurant or bar chain makes the decision to migrate to London, it’s unlikely to move on to the national radar.
A question of logistics
Part of the problem is logistics. It’s surprisingly difficult to persuade people to visit out-of-London sites. It’s sometimes hard enough to get them to venture outside the Circle Line.
Snobbery plays a part too. There is still a two-tier divide between London and the rest of the UK, which makes little sense to anyone who works closely with the sector. In fact, for investors, the opportunities outside the capital are arguably more appealing and can certainly offer higher returns.
At Piper, we’ve done it both ways. We’ve backed businesses such as Pitcher & Piano and Be At One, which originated in London before gradually moving further afield. We helped grow Bristol-based Las Iguanas from a regional operator of four restaurants into a nationally recognised chain, and facilitated its move into central London.
And our last two investments in the sector have been Loungers and Turtle Bay – both regional, fast-growing operators in the process of rolling out units across the country.
While London may bring a business instant profile, there are many advantages to starting elsewhere.
The most obvious is the availability of space. Generally, demand in the capital is much greater, there are fewer locations and higher rents can make a sizeable dent in profits.
As a way to circumvent this problem, there has been a rise in the number of operators using A1 premises (as opposed to the larger and hot kitchen-equipped A3s). With the demise of traditional high streets and increasing reliance on leisure and hospitality formats, it will be interesting to see if this trend continues and regulations are relaxed accordingly.
Robust in the regions
Another advantage of businesses built outside London is that they can often be more robust. In the smoke, the challenge is less price-sensitive – people will pay a premium for a simple Korean noodle soup. But elsewhere customers expect far more for their money and operators, therefore, have to work harder to demonstrate value.
In the early days of Las Iguanas, that value was represented in tortilla chips. Customers in Cardiff wanted a higher quantity on their plates than those in Bristol.
Elsewhere operators have other quirks with which to contend. In university-dominated cities, they must think carefully about the lengthy holiday periods, while those in towns by the sea must deal with an even more fundamental issue: the sun. When it’s out, everyone heads to the seafront. When it isn’t, everyone vanishes.
And they all face the challenge of finding and retaining good, reliable staff. Pitcher & Piano was a pioneer in this field by setting up one of the sector’s first academies in the early ’90s. Loungers recently invested £100,000 in its own staff development programme, while Be At One spends £5,000 on training every new bartender. For any business that takes its customer experience seriously, it’s money well spent.
Freeing up business time
Away from the glare of publicity, operators outside London are arguably afforded more time and space to hone their businesses and get to understand their customers. We’ve seen many quietly forge strong, impressive restaurants and bars in the process.
If a regional business does decide to take the leap and open in London, it’s often done on solid foundations.
When Las Iguanas opened a site in the Royal Festival Hall, it was a huge success and only then started to capture people’s imagination as a scaleable concept.
This was partly because it demonstrated it could work inside as well as outside London – but also because for those who wanted to experience it in person, it was only a Tube ride away.
For restaurants and bars going the other way, there are other obstacles, not least the operational ease of getting to new sites. But the industry generally welcomes fresh blood into an area – in this respect it’s certainly more supportive and less competitive than other sectors.
There’s a sense that if you create an ‘eco-system of hospitality’ in an area, everyone will benefit. Consumers will want to come in and spend more time there, more money will be spent and, in turn, the city centres will become more viable.
For instance, a Lounge site in Southbourne, a suburb of Bournemouth in Dorset, contributed to revitalising an entire high street. A few years ago, the road was deserted with many vacant sites. But the arrival of Ludo Lounge helped bring people back to the area. Other shops began opening again.
The transformation was so marked that residents of nearby Christchurch campaigned, against council opposition (due to a policy limiting non-retail on the high street), for another Lounge to come to their neighbourhood. The council eventually relented and Arcado Lounge opened last year in what had previously been an empty and dilapidated discount shop. Like Southbourne, it is bringing people back to the high street.
Stories like this may not garner nationwide publicity, certainly not on the scale of a trendy new London opening. But they illustrate the real and positive impact that regional operators can have across the country.
