Change is happening everywhere

This may sound an odd thing to say given the sectors I cover, but it suddenly struck me the other day just what extraordinary changes are sweeping through the pub and restaurant industry. You’d be forgiven for wondering just what planet I’ve been on the last few years to make such a Basil Fawlty-ish comment (“stating the bleeding obvious”) but sometimes you can almost get too close to a subject, meaning you can miss the bigger picture.

The first thing that struck me was the changing face of some of the leading players. Who’d have thought three or four years ago that we would no longer have Jamie’s Italians dotted around the UK? And who would have guessed that, five years after its £873m buyout by the Chinese private equity firm Hony Capital, Pizza Express would be facing a refinancing likely to value the once-dominant casual dining chain at less than half that figure? And did anyone see the dreaded curse of the CVA snaring former restaurant stars like Byron, Gourmet Burger Kitchen and Carluccio’s?

Remarkable sales

Conversely, who’d have thought that The Restaurant Group, having been through a tumultuous few years that could easily have been the death of it, not only survived but managed – by the skin of its teeth – to persuade shareholders to back the £559m acquisition – yes, £559m!! – of Wagamama, a brand that continues to serve up remarkable like-for-like sales?

And look at the pub industry. Tim Martin may still be running JD Wetherspoon (40 years and counting), but elsewhere the tectonic plates are shifting in seismic fashion. Quite a few people would once have bet on the two titans of the tenanted sector going kaput in a maelstrom of soaring debt, stuttering trading and regulatory interference, but few would have predicted both would be gobbled up, Punch Taverns by Heineken and Patron Capital, and Ei Group (what a heinous name that is) by, of all companies, managed pub specialist Stonegate Pub Company.

Radical change

The brewing history book is also being dusted off and radically rewritten to reflect the swallowing of Greene King, established in 1799, by a Chinese billionaire and the splitting asunder of Fuller’s, established in 1845, via a sale of its brewing operations to another Asian marauder, this time Asahi of Japan. Who next? Marston’s, Mitchells & Butlers or, God forbid, Shepherd Neame?

Now, some of you will – probably rightly – argue that such a redrawing of the map is par for the course in an industry where nothing is more certain than change itself. But what of some of the more fundamental changes, like the unstoppable growth of delivery, food on the go, the transformation of veganism from fad to mainstream and the growth in importance of issues like calorie labels on menus and allergies? I could mention the continuing march of technology and the myriad ways in which it is transforming the way people choose venues, book tables, order their food and drink and pay for it (and the ways in which it is driving the experiential trend).

Jury is out

Of course, such rapid advances will never be smooth, and the jury is still out on many of the apps that have sprung up to do everything bar eating the food. Indeed, the jury is still out, at least for some people, on the benefits of signing up to delivery. While Wagamama has espoused the concept with gusto – in fact, without it, the noodle chain would probably be turning out like-for-likes no better than flat – others are not so sure, worrying about costs, margins and cannibalisation of more lucrative restaurant sales. The turbulence that has hit the delivery operators like Just Eat and Deliveroo tells us that this is a market in a state of flux and the outcome of the wave of M&A will doubtless determine how its development plays out.

What is certain is that the delivery genie is not about to get back in its bottle. Changing social trends have led to a shift in the way we enjoy food and drink. We work longer hours so are less inclined to cook, and more of us are staying single for longer. The temptation to go for a takeaway has been heightened by the ease of ordering on a smartphone and the surge in on-demand TV services like Netflix and Amazon Prime will only accelerate the shift from eating out to dining-in. Which probably explains why Amazon has agreed to acquire a minority stake in Deliveroo, although its efforts to join the digital dots are currently being held up by the Competition & Markets Authority.

Tim Martin

On the subject of Tim Martin, I say hats off to the guy for increasing the pub industry’s profile. OK, so he may have rather flogged the subject of Brexit to death, but everyone now knows who he is and what he thinks on the subject.

Of course, Brexit was not the first subject to get him up on his Wetherspoon soapbox – before that the euro and taxes were among his favoured topics – and it will not be the last. His latest target is corporate governance, and he has been his usual forthright self on everyone from institutional shareholders to proxy voting advisers.

You may not agree with everything he says, but PIRC’s advice to City investors to vote him out because he’s been chairman for more than the recommended nine-year tenure is frankly barking. Tim Martin IS Wetherspoon and without him it would be a poorer company. And, as he points out himself, he passed the nine-year milestone in 1992, so why change now?

■ Dominic Walsh is a business reporter at The Times