London is wallowing in a “golden age of dining out” but figures detailing current restaurant closure rates suggest the market has almost reached the stage where it is over-supplied.
Restaurant openings in London grew at a faster rate in the last 12 months than at any time previously recorded, according to the latest edition of Harden’s London Restaurants guide.
200 new sites are documented in the latest edition released this week, easily beating the previous record, set only last year of 179.
However, the rate of closings was alarmingly high, at 76. It is the third highest level of closures in the last 26 years, and significantly up on last year’s level of 56.
Taking this level of ‘churn’ into account, the net opening rate of 124 was just one higher than last year, effectively rendering any growth ‘flat’.
The ratio of openings to closings (2.6:1) declined quite significantly on last year’s figure (3.2:1), which was the second highest ever recorded.
Although this year’s figure is relatively high, the year-on-year decline is suggestive of a peak being past, according to the guide’s co-founder, Peter Harden.
“Londoners are in a true golden age of dining out, as this year’s record openings show,” he said. “But, as many restaurateurs will tell you (and as these figures bear out), competition, heightened by the sheer weight of new restaurants, is increasing and starting to risk an oversupply, as shown by the rising number of closures.”
Mr Harden said the figures did not reflect the impact of the post-Brexit vote as new restaurants ypically have a gestation period of nine months or more. “Our view is that Brexit poses a high risk to the restaurant trade, which – like the rest of the hospitality industry – is terrified about staff recruitment with tougher immigration rules.”
East London remains the destination of choice for new restaurant openings, although West London narrowed the gap this year with three-quarters the number of openings out east.
East London openings are disproportionately likely to feature meat-based cuisines, which are the most popular choice for new openings in ‘E’ postcodes.
For London as a whole, modern British and Italian cuisines are most popular. To a striking extent, the most poorly represented major cuisine among newcomers continues to be Chinese, Harden said.