City Centre Restaurants is the latest quoted company to feel a City backlash. Its shares were hit on Friday after a report from Evolution Beeson Gregory said it was the most exposed to a further deterioration in leisure spending in London and the South East.
Evolution Beeson Gregory has analysed the sensitivity of a dozen or so pub and restaurant operators to regional trading patterns and graded them according to their dependence to what it sees as a faltering London economy and its reliance on high street rather than neighbourhood sites.
City Centre came out badly and was rewarded with a "sell" recommendation, while Luminar, the late night entertainment leader, emerged on top and saw its shares jump 25p.
It's good news for Luminar, but hardly a revelation that it is not a big London player – it has always been its strategy to stay out of the capital. Chief executive Stephen Thomas must be particularly pleased, as he has been at his honest best of late telling everyone who wants to listen just how bad trading is at present and that he was going to put on his metaphorical tin helmet and just sit it out.
The fact that Luminar is worth backing long-term is surely more down to the inherent strength of its business, and the fact that it has the fire-power to be one of the sector's key consolidators – if it so wishes.
City Centre must, on the other hand, be a little frustrated. First, there is no mystery as to where its sites are. For example, they are all listed on Martin Information's MIProfiling website, along with everybody else's.
CCR's recent statements have also suggested that it hasn't been hit as badly as PizzaExpress in central London, a story repeated by the likes of ASK.
Evolution Beeson Gregory also raises doubts about City Centre's airport business in the light of impending action in Iraq. The same doubts were raised after September 11. However, City Centre defied the prevailing logic then as the impact of fewer flyers was out weighed by the positive effects of longer passenger waiting times prompted by heighted security. So, who knows this time?
But all this seems to ignore City Centre's particular strength in out-of-town retail parks, where its long-term strategy has seen its Frankie & Benny's brand have a virtual monopoly on eating out options in certain locations.
Evolution Beeson Gregory may be right that CCR is at risk. We will know more soon when it reveals its latest results.
More concerning seems to be the writing-off of both the high street and London and the South East. Not so long ago, these were supposedly the places to be, and corporate failures even last year were more down to the consequences of southern-based concepts moving out of their own patch rather than trading within it. PizzaExpress has obviously changed that.
The high street is over-crowded and competitive, and poor operators are hurting, but that still hasn't stopped privately-owned operations such as Nando's, Wagamama and La Tasca making a mark this past year. Perhaps their apparent successes require more research from the public equity quarter?
As the Government's recent Family Spending survey revealed, London and the South East remains the power-house of the eating out market. Londoners spend the most on restaurant and café meals, 40% more than the UK average – so getting out of that market, even if it is competitive, would seem something of an over reaction.
Evolution Beeson Gregory has analysed the sensitivity of a dozen or so pub and restaurant operators to regional trading patterns and graded them according to their dependence to what it sees as a faltering London economy and its reliance on high street rather than neighbourhood sites.
City Centre came out badly and was rewarded with a "sell" recommendation, while Luminar, the late night entertainment leader, emerged on top and saw its shares jump 25p.
It's good news for Luminar, but hardly a revelation that it is not a big London player – it has always been its strategy to stay out of the capital. Chief executive Stephen Thomas must be particularly pleased, as he has been at his honest best of late telling everyone who wants to listen just how bad trading is at present and that he was going to put on his metaphorical tin helmet and just sit it out.
The fact that Luminar is worth backing long-term is surely more down to the inherent strength of its business, and the fact that it has the fire-power to be one of the sector's key consolidators – if it so wishes.
City Centre must, on the other hand, be a little frustrated. First, there is no mystery as to where its sites are. For example, they are all listed on Martin Information's MIProfiling website, along with everybody else's.
CCR's recent statements have also suggested that it hasn't been hit as badly as PizzaExpress in central London, a story repeated by the likes of ASK.
Evolution Beeson Gregory also raises doubts about City Centre's airport business in the light of impending action in Iraq. The same doubts were raised after September 11. However, City Centre defied the prevailing logic then as the impact of fewer flyers was out weighed by the positive effects of longer passenger waiting times prompted by heighted security. So, who knows this time?
But all this seems to ignore City Centre's particular strength in out-of-town retail parks, where its long-term strategy has seen its Frankie & Benny's brand have a virtual monopoly on eating out options in certain locations.
Evolution Beeson Gregory may be right that CCR is at risk. We will know more soon when it reveals its latest results.
More concerning seems to be the writing-off of both the high street and London and the South East. Not so long ago, these were supposedly the places to be, and corporate failures even last year were more down to the consequences of southern-based concepts moving out of their own patch rather than trading within it. PizzaExpress has obviously changed that.
The high street is over-crowded and competitive, and poor operators are hurting, but that still hasn't stopped privately-owned operations such as Nando's, Wagamama and La Tasca making a mark this past year. Perhaps their apparent successes require more research from the public equity quarter?
As the Government's recent Family Spending survey revealed, London and the South East remains the power-house of the eating out market. Londoners spend the most on restaurant and café meals, 40% more than the UK average – so getting out of that market, even if it is competitive, would seem something of an over reaction.
