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15 June 2018 | Restaurants

Independent operators discuss restaurant sector trends at industry roundtable hosted by Christie & Co and Goodman Derrick

At a roundtable discussion hosted by Christie & Co and Goodman Derrick on 7th June 2018, independent operators from within the restaurant sector gathered to discuss the key issues and developments in the industry, plus the current casual dining crunch facing many chains.

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From the in-depth conversations had at the event, three key themes emerged which operators highlighted as the most prominent to watch: developments in technology, consumer demands and trends, and the different routes for funding.

The newest and most rapidly adopted technology trend is the rise of home delivery services and apps such as Deliveroo, which has been welcomed to varying degrees by operators. Generally, the question is around whether the added income stream is worth using if the quality of food delivered is compromised and impacts service for customers in the restaurant. Home delivery is a great way to generate additional revenue, with some operators installing separate prep areas or ovens to meet the demand, however, if the cuisine ultimately doesn’t travel well, operators will steer clear to avoid any negative impact on the restaurant’s reputation and repeat custom.

Restaurant operators have also widely adopted contactless card payments, with one operator noting an uptick of over 30% in covers due to the improved efficiency and speed. Online click and collect services have also become popular, allowing businesses to pre-prepare meals for customers to pick up ahead of time. 

With consumer demands and trends front and centre, operators highlighted that this is where some of the failing casual dining chains fell down. The new generation of consumers (‘millennials’) want to go somewhere unique that offers something different to the generic chain brands, with an experiential element – which is where independent operators felt they were in a strong position. They also feel better positioned to gauge what their customers want, aware that sometimes what they say they want does not always correlate with actual behaviours – for example ‘health-conscious’ diners still buying burgers over salads.

Social media is a valuable tool for operators to gain free marketing or engage with their customer base, particularly if their offering has a hook, with many operators highlighting online trends such as veganism, fitness lifestyle, and ‘instagrammable’ food or décor. Some restaurant owners noted that it was not uncommon to be approached by bloggers who offer to promote the business on their social channels in exchange for complimentary meals.

How a business funds its development and expansion depends entirely on the business itself, however many operators discussed the pitfalls of private equity backing, such as accelerated growth which prevents a business from growing organically and at a sustainable pace. Opening new sites rapidly and without proper research into the location was noted by operators as part of the downfall for many casual dining chains. However, as long as restaurants can maintain their identity and quality, and not become oversaturated, operators are not averse to private equity backing.

An emerging route popular with younger entrepreneurs and start-ups is crowdfunding. The relatively new concept is favoured for the connection it nurtures between businesses and their consumers and supporters however from a legal standpoint it can complicate the process and can be met with uncertainty from future buyers or investors. 

While there is a plethora of issues, developments and an abundance of opportunities in the dining sector, it is clear that the future is bright for independent operators who are passionate about their business and understand the way the industry is changing. Above all, the key takeaway from the roundtable discussions was that demand from consumers is still as strong as ever – the supply just needs to be well placed to ensure success.

Simon Chaplin, Head of Pubs & Restaurants at Christie & Co, who co-hosted the event commented, “The timing of this event was spot on, as in the run up the branded operators announced more closures which gave the impression that the sector was in free fall. However, the sentiment at the seminar was that focused, independent operators were finding growth and opportunity. The event was well attended by those looking to share their experiences with most relieved to find they are not alone in their optimism.” 

James Daglish, hospitality lawyer at Goodman Derrick, who co-hosted the event added, “The atmosphere in the room was cautiously optimistic and it is clear that the so called casual dining crunch is not hitting all operators, and certainly not well balanced businesses that are effectively responding to demand, especially demand from millennials. I left with the distinct impression that some of the chain closures will provide opportunities to high-quality, nimble businesses, such as those around our table.” 
 
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