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London restaurant closures at ‘near-record levels’ but openings remain up

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The growth of London’s restaurant scene has staged a weak recovery in the last 12 months, it was claimed this morning.

Data from the latest edition of Harden’s London Restaurants records 174 newcomers this year, up from 167 in the previous 12 months.

It makes it the fourth-highest year for openings since Harden’s began publishing its guide 30 years ago, with the peak being 200 three years ago.

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Closures, however, also stand at near-record levels with 110 recorded. This level is barely below last year’s chart-topping 117, and the former record of 113 in 2004.

Net openings – the difference between openings and closures – were up 28% year-on-year.

Harden’s said that the latest figures suggest the market has returned to a ‘normal’ level of growth, at 50-75 net openings per year, versus the “exceptional” figures recorded in the middle of the decade.

The feeling that the market is still a tough one is reinforced by the ratio of openings to closures, or “churn”. At 1.6:1, it represents only a slight gain from last year’s 1.4:1, and is well below the 29-year average of 2.1:1, Harden’s said.

Previous slumps in activity have generally been followed by a sharp rebound in the ratio of openings/closures either back to, or above, the long-term average.

But you have to go back to the deep recession of the early 1990s to find as limp a recovery as the one currently underway.

The guide’s co-founder, Peter Harden, said: “Any book on entrepreneurialism will tell you that just to stand still it is necessary for any business constantly to reinvent itself. That is evermore the case in the London restaurant scene where any site that is not performing at its peak will quickly be reformatted under the same brand or a new one.

“The last three decades have seen an incredible rise in the professionalism of the trade. Opportunities continue to present themselves to those with witty new formats or sufficient passion to excel at the old ones.”

The new guide records a large number of high profile casualties amongst last year’s casualties.

Leaving aside well-publicised liquidations and CVAs in the mid-market such as Jamie’s Italian, the well-known indies who shut up shop included Fifteen, Hedone,The Providores, Shepherd’s, Kensington Place, maze, The Red Fort, Sonny’s, Asia de Cuba, and Great Queen Street.

The average price of dinner for one at establishments listed in the new edition is £59.28 (compared to £55.76 last year).

Prices have risen by 6.3% in the past 12 months (up on 4.8% in the preceding 12 months).

This rate compares with a general annual inflation rate of 2.1% for the 12 months to July 2019, yet further accelerating the trend seen in the last three years by which London restaurant bills have seen price rises running significantly higher than UK inflation generally.

Whereas in recent years new restaurant openings have been focused in hipster enclaves in the East End, this year saw openings much more targeted on Central London (with 82 newcomers).

Away from the centre, activity was very much more evenly spread than it has typically been in recent times. East London led the way, but only by a whisker (with 27 openings) closely followed by both South London (with 26) and West London (25).

The only laggard was North London which – after a promising year last year – reverted to being the least popular area (with just 14 newcomers).

Modern British cuisine (53) is by far and away the most popular for newcomers, with Italian (17), Indian (10) and Japanese (9) the next most numerous.

Tags : HardensLondonresearchRestaurants
Andrew Seymour

The author Andrew Seymour

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