Restaurants are being driven out of city centres by high rents according to a report by Christie and Co.
Julian Mitchell, of the company’s corporate restaurant division, said that, in the fight for high street presence, "the big retailers are at the stage the big pub and restaurant chains were at in the mid to late 1990s, when paying £150,000 rents were common place."
Sites which were going to pub and restaurant groups are now going to clothing outlets and companies prepared to make a loss for five to 10 years in return for a higher profile, such as branded coffee chains.
Fast-casual dining chains, which include Ask, Strada, Prezzo and Nando’s, are now competing with the smaller restaurant operators on the fringe of the prime retail zones.
One consolation of moving away from the centre has been to move outlets closer to their customers, with older customers in particular increasingly wary of town centres where they fear encountering groups of binge drinking young people.
Mitchell said that, as they move into the fringes, some restaurant operators, such as Loch Fyne and Blubeckers, are looking for the straightforward pub-to-restaurant conversions.
The upper floors can be let out or mothballed and the ground floor converted to restaurant use. Most operators have more flexible requirements for suburban sites, Mitchell says: "They are looking for any opportunities so long as the demographics are right, there is ease of change of use from retail to A3 if required and that, the floor plan is suitable."
Mitchell gives an example of a 4,000 sq ft unit on the High Street in one of West London's more up-market "villages", currently in the hands of a big fast-food chain, where the rent looks about to rise almost 50% to £140,000.
Once, he comments, when owners of branded bar chains were trying to build their high street profiles, presences, someone might have paid that for an A3 use. Now only the large high street multiples and the like are willing to pay such sums.
