Stella Reports: The recent collapse of a number of Jamie Oliver’s businesses, including “Recipease” Cookery schools, is not unexpected at a time when high street closures are a daily occurrence. The question is, how long will the bonfire of chain stores and restaurants last? And what does this mean for ICSA members?
There has always been a close correlation between the financial confidence of the UK and cookery school income. As one of the oldest cookery school founders, I have been through three recessions and I am pretty sure we are staring at the next one. Cookery schools tend to be the barometer of consumer confidence and with every hiccup, we see a drop in enquiries and bookings almost immediately. So it is no surprise that we are seeing a stagnant micro-economy being reported by ICSA members.
If you are finding the Brexit flu affecting your longer courses, I suggest you chop out those courses and concentrate on short courses (I call them ‘bite size’ as they are usually 4 or less hours and at a price that can easily be given as gifts). You need to check your booking numbers regularly, up to 3 months ahead. Anything that you see as very low numbers and unlikely to fill, take it out of your calendar and substitute something you can promote locally at a good price. If you have someone already booked, you should see if they are prepared to move to another date, most people understand and frankly would prefer to be in a reasonably sized group. If there is any disappointment, be sure to offer suitable compensation.
One thing you can be sure of, any turbulence in loss of bookings, will in the end smooth itself out. Cookery schools can weather the storms better than most types of businesses IF you keep adjusting your offer in plenty of time, remember that your local market is loyal and will respond quickly to new ideas and courses. If anyone would like to chat in confidence, please email me. In the meantime here is a bit of additional reading which is interest and relevant.
The number of restaurants in Britain fell by 2.8% in the year to March 2019, with high streets in the south of England, excluding London, hit especially hard by closures.
The figures from the Market Growth Monitor from CGA and Alix Partners reveals net closures of 768 restaurants over 12 months, or around 15 a week. It marks a fifth successive quarter of decline in the sector, bringing to an end a boom period that saw restaurants grow in number by more than 15% between 2013 and 2018.
The bulk of closures have been of independents, but group restaurants—managed sites from operators with more than one location—also fell in number, by 1.1%. The pace of closures for these group operators was significantly higher in the south of England (2.8%) than in the north (0.4%)—a sign that restaurant levels have reached saturation point in many southern towns and cities.
The Market Growth Monitor reveals a more positive picture for the drink-led pubs and bars sector. Three years ago the report found that closures in this part of the market were averaging 31 a week—but the rate tumbled to 13 a week in the 12 months to March 2019. With premium and all-day bars performing particularly well, it suggests that Britain’s long-term clear out of unsustainable pubs may be nearing an end.
CGA vice president Peter Martin said: “CGA research has charted a remarkable surge in restaurants over the last decade—but our latest Market Growth Monitor makes it clear that the gold rush is over. Some distinctive and resolutely customer-focused restaurant groups continue to flourish, but for brands that have over-reached themselves or lost sight of their proposition and purpose, there are undoubtedly more tough times ahead. Major challenges on British high streets, like rising costs and declining footfall, are adding another layer of difficulty.”
AlixPartners managing director Graeme Smith added: “The positive take on this clear out is that ambitious and well-resourced operators now have more headroom for growth, and the Market Growth Monitor identifies bright prospects for many groups in the drink-led pub and bar space in particular. Brands that can deliver a compelling premium drinks offer and strike the right balance with food have all to play for in 2019 and beyond. The next 12 to 24 months offer an opportunity for well-funded restaurant groups to expand into prime sites at much-reduced costs—and if you can catch the right consumer.
Stella.
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