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Independents plot a course through the crunch at a casual dining sector roundtable hosted by Goodman Derrick and Christie and Co
Independent operators plotted a course through the so called “casual dining crunch” at a brunch hosted by Goodman Derrick and Christie & Co on 7th June 2018.
James Daglish, specialist hospitality lawyer at Goodman Derrick, commented:
“The atmosphere in the room was cautiously optimistic and it is clear that the so called 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.”
Several core themes emerged :
- Funding – with high street banks still struggling to meet demand some challenger banks have stepped in with more flexible debt solutions. Private equity is also filling the gap with well intentioned investment providing a springboard to accelerated and sustainable growth. But delegates urged caution with some noting that rapid expansion, without proper local research, was a common theme in the downfall of many casual dining chains.
- Crowdfunding – if done well it can provide funding and nurture close ties with restaurants and clients, however it was also noted that some models cause problematic legal issues, complicating further investments and business sales.
- Millennials (always millennials) - the new generation demand high-quality and unique experiences and many independents felt they were in a strong position to deliver as their menus, décor and overall brand can be flexed to meet the shifting demand.
- Skinny burger? - the independents also felt more engaged with their customers through natural interactions and social data. One delegate noted that “what our clients say they want does not always correlate with what they actually want, so we get self identified ‘health-conscious’ diners buying burgers more often than they buy salads.”
- Food apps – home delivery services such as Deliveroo are welcome but they are not a silver bullet, with one delegate saying that the additional income is not worth it if the delivered food quality is compromised and if the on site dining experience is compromised by the constant presence of couriers. Online click and collect was noted as a win-win solution in the lunchtime market, allowing businesses to pre-prepare meals and providing efficient pick-up for busy customers.
- Payments - contactless is king, with one operator noting a 30% uptick in covers after adopting the system due to the improved efficiency and speed. Conversely going completely contactless was still seen as too risky.
- Social media - operators highlighted the ability to tap into online tribes such as veganism and fitness, by providing ‘instagramable’ food and décor and even shop fronts designed specifically for the camera. Owners also noted that influential bloggers often offer promotion in exchange for food.
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.”
About Goodman Derrick’s Hospitality & Leisure Group
Goodman Derrick’s specialist team have acted for clients in the Hospitality & Leisure sector for many years, gaining valuable insight into the legal and commercial issues that clients face when growing their businesses. Specialist lawyers advise in relation to:
- Commercial agreements
- Real Estate
- Dispute Resolution
- Human Resources
For more information please contact James Daglish, Partner, Hospitality & Leisure at email@example.com or on +44 (0)20 7421 7949.
Media please contact James Caulfield, Head of Business Development at firstname.lastname@example.org or on +44 (0)20 7421 7968.