Editor’s view: Restaurant regionalisation adds a twist to the tale

Andrew Seymour grayscale

PA restaurant chain can have the most innovative-looking kitchen in the world, but failure to get a handle on property acquisition can quickly render that point immaterial.

Picking the right site has become one of the biggest challenges facing multi-site operators these days. Get it right and you never look back; get it wrong and the best-laid growth plans can rapidly deteriorate as it becomes impossible to compete profitably in an over-crowded market.

The ability to pinpoint the most suitable sites, in the most opportune locations, will ultimately determine the success and failure of expansion-hungry operators.

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It’s an observation that leading experts in the sector, including leisure property specialist Davis Coffer Lyons, continue to assert.

With the London market notoriously over-heated, many foodservice operators are now choosing to divert their attention elsewhere in the UK because their brands will often have greater leverage away from fashionable central London districts, and as a consequence return on investment away from the capital is more attractive to them.

DCL notes that affluent towns in counties such as Surrey, Berkshire, Buckinghamshire and Hampshire have seen an explosion of casual dining facilities over the last five years, with branded operators viewing these markets as preferable to central London partly because of lower property costs in the commuter belt.

However, there is subsequently a tendency for trade in these locations to be split too thinly.

As a result, many operators are now re-focusing again — this time on second-tier smaller market towns, not only in the south-east but throughout the UK. Property costs are that bit lower as is the quantity and quality of competition.

Market towns might be a pull for restaurant chains, but they can generally only support one or perhaps two branded restaurant operators and, as such, the likelihood of additional competition coming in is also reduced.

The race is on to see who gets there first.

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