Is it just me who’s getting hungry every time I check the news? Last month’s financial woes at Pizza Express and the uncertain merger between Just Eat and Takeaway.com, described as a feeding frenzy by the FT, have both seen images of mouth-watering meals popping up all over the place.
Yet, behind these images are some decidedly less-appetising sights; closed stores, lost jobs, a gig-economy workforce, and ultimately, an even more barren high street.
What’s driving this change?
Pizza Express have blamed a lot on their £1.1bn of debt . But while juggling masses of debt is perilous enough for any business, the restaurant industry also faces Brexit making hiring EU workers harder, sky high business rates, and perhaps the most important factor of all: changing consumer tastes.
For example, Pizza Express isn’t the only Italian chain folding like a calzone. Jamie’s Italian went bust in May and there have been recent store closures at Prezzo, Strada, and Carluccio’s. Is it just that the UK’s love affair with Italian food is over?
The issue is in fact more widespread, and affects the entire food and beverage sector. This is why we’ve seen Gourmet Burger Kitchen and Byron struggling to keep their sites open, and a quarter of the UK’s pubs close in a decade.
The problem, it turns out, isn’t with the food, but with the reduced demand for casual dining experiences.
The “casual dining crunch” is nothing new, but the aggressive expansion of delivery services like Deliveroo, Just Eat, and UberEats have pushed it into overdrive, much in the way Amazon, eBay and other e-commerce platforms have driven traffic away from the high street to online.
This has even led more and more eateries to divert their attention towards delivery offerings using so-called Dark Kitchens, small off-site kitchens in temporary buildings which are shared by restaurant chains to afford them delivery access to a new area, letting them avoid setting up a restaurant space.
So, with casual dining on the out, what’s next for food and beverage?
Those who prize convenience will continue to order their meals online. But people who want quality go out and spend a little more at high-end eateries that offer more than just food. The key buzzword here is experiential.
As tastes turn towards unique, unfamiliar, and instagrammable experiences, a run of the mill, bog standard restaurant setting that you’d find in any town is no longer cutting ice. Already, customers are turning to previously unconventional cuisines, which has led the vegetarian, Caribbean, Turkish, and Middle Eastern restaurants sectors to each grow by well over 60 percent in the past five years.
It is also why we’re seeing more and more hipster pop-ups and organic food markets drawing huge numbers.
In London alone, sites such as Boxpark in Wembley or Coal Drops Yard at King’s Cross are hosting hubs of smaller, concept-driven restaurants. Offering popular trends such as street-food stalls, artisanal vendors, and curated eating experiences, these sites are creating dining experiences that younger consumers can’t get enough of, to say nothing of their events.
Build-to-rent developers have also grasped this, understanding that as a service asset they need to provide their tenants not just a home, but an experience and lifestyle. At Manchester’s Angel Gardens, BTR developer Moda Living has partnered with Pot Kettle Black, an Australian-style coffee and brunch café that will host wellness-themed events and provide F&B services to residents.
Our advice to developers and property managers would therefore be to not be afraid to roll the dice on a lesser known or local restauranteur with a unique, quality offering – they’re likely to do far better than the alternative. I, for one, can’t wait for the resulting success stories – all this talk of food has me ravenous.