Closing down sites is too often seen as a negative in this industry. The truth, on the other hand, is that in many cases it is probably the sensible, even brave, business move and should be applauded.
Admitting defeat is one thing; hanging on too long is quite another.
Just after Christmas, I was mildly, and politely, rebuked by an operator for emphasising a branch closure rather than his company's new openings schedule. Fair comment. Talking up the sector, especially in the current climate, should always be the preferred option.
But, the decision to walk away from that particular location made perfect sense. It was not hitting company sales bench-marks and was unlikely ever to, even with extra effort. Focussing on both existing, better performing sites and new investments was a sound business judgement. A pity others didn't act so quickly with their under-performing sites.
The problem is that the outside world doesn't always take that view. Selling or closing sites is more often that not interpreted as a sign that a company or brand is in trouble. That was exactly what happened a year or so ago to All Bar One when it announced it was disposing of a bunch of low-turnover sites that no longer fitted its profile. Sections of the press decided that this showed that the skids were under the bar brand. Not so.
But bad publicity or not, taking the tough decisions to close or sell off poor sites have to be made – and made early. Finding trade buyers in the present environment, of course, is not necessarily easy, but the pain of a long tail of under performing sites can be seen in too many operations. And trying to sell when it's too late is never good.
It goes back to an underlying theme, the need for constant change and improvement - and that includes estate churn.
The fact is that the industry could benefit from some well placed culling at the moment. The High Street, in particular, is suffering from over capacity with too many marginal concepts trading at the margins.
I remain an optimist about the market. Despite the increase in competition, the eating-out market in the UK grew almost 4% last year to be worth £25bn. It's worth being in.
The trick for the entrepreneurial operator is to spot the trends and taste changes and to get in early – and when it isn't working to get out just as quick. That's how the money will be made.
Admitting defeat is one thing; hanging on too long is quite another.
Just after Christmas, I was mildly, and politely, rebuked by an operator for emphasising a branch closure rather than his company's new openings schedule. Fair comment. Talking up the sector, especially in the current climate, should always be the preferred option.
But, the decision to walk away from that particular location made perfect sense. It was not hitting company sales bench-marks and was unlikely ever to, even with extra effort. Focussing on both existing, better performing sites and new investments was a sound business judgement. A pity others didn't act so quickly with their under-performing sites.
The problem is that the outside world doesn't always take that view. Selling or closing sites is more often that not interpreted as a sign that a company or brand is in trouble. That was exactly what happened a year or so ago to All Bar One when it announced it was disposing of a bunch of low-turnover sites that no longer fitted its profile. Sections of the press decided that this showed that the skids were under the bar brand. Not so.
But bad publicity or not, taking the tough decisions to close or sell off poor sites have to be made – and made early. Finding trade buyers in the present environment, of course, is not necessarily easy, but the pain of a long tail of under performing sites can be seen in too many operations. And trying to sell when it's too late is never good.
It goes back to an underlying theme, the need for constant change and improvement - and that includes estate churn.
The fact is that the industry could benefit from some well placed culling at the moment. The High Street, in particular, is suffering from over capacity with too many marginal concepts trading at the margins.
I remain an optimist about the market. Despite the increase in competition, the eating-out market in the UK grew almost 4% last year to be worth £25bn. It's worth being in.
The trick for the entrepreneurial operator is to spot the trends and taste changes and to get in early – and when it isn't working to get out just as quick. That's how the money will be made.
