London restaurants have suffered their weakest growth in the last 30 years, and perhaps been in a period of contraction.
That’s the conclusion of the 30th edition of Harden’s London Restaurants – the2022 publication – and its associated restaurant-finder app, which go on sale next week.
The guide’s analysis is based on two years of averaged data, because COVID-19 prevented the publication of its 2021 edition, causing the guide to skip a year.
By averaging two years of data, the results potentially understate the severity of the restaurant market’s low point, as it spreads the effect of closures evenly over the two-year period. But – in showing two years of identical data – the data series emphasises the prolonged nature of the downturn.
Openings and Closures
The guide records a rate of 149 newcomers added per year over the period. This is in the middle of the range of 107–200 added per year in the previous 10 years.
Closures, however, were at a rate of 125 per year over the two-year period. This level is worse than 2018’s former high of 117 closures, and the former spike of 113 in 2003 (a year badly hit by the SARS epidemic).
Net openings (that is Openings minus Closures) were at a rate of 22 per year: comparable with the lowest levels seen over the 30-year period (cf the early nineties, and 2003).
Such weak figures are more dramatic in the current period: firstly, because they are relative to a much larger market than in former weak years; and secondly because they represent a two-year period, whereas historically individual weak years have been downward spikes followed by immediate strong growth.
Viewing these figures on the graph of London Net Openings – which carries a pronounced hump between 2014 and 2018 – raises a question as to whether the four-year period of record growth in the middle of the decade 2010-2020 was fundamentally unsustainable even without the pandemic.
The dramatic nature of the COVID-19 induced downturn is most evident in the statistics on churn.
At 1.18 for two years, not only is this ratio the lowest recorded, but it dramatizes the unprecedented severity of the COVID-19 years, compared with prior downturns where an increase in churn has quickly been reversed in each case.
The guide’s co-founder, Peter Harden, said:
“Even before March 2020, over-supply was a problem in the London restaurant market, and the pandemic meant there was absolutely nowhere to hide.
The result has been the most dramatic period of closures and churn that we have yet seen.
Recessions normally hit weaker performers. In the closures we record, the fall-out is more randomly spread, with many excellent businesses shuttering due to factors as diverse as a City-based location, recalcitrant landlords, or a decision to take retirement and bow out gracefully.
And all the above is before we start to factor in the new normal of the dire staff shortages created by Brexit.”
The new guide records a large number of high profile closures, many associated with celebrity names over the two-year period. These include include: Alyn Williams (although the circumstances were singular); The Bleeding Heart Restaurant (though tavern and brasserie continue to operate); Bryn Williams at Somerset House; The Dairy; The Frog Hoxton (relocated); Galvin HOP (reformatted) and Galvin at the Athenaeum; The Gilbert Scott (to be relaunched in new ownership); The Greenhouse; Hai Cenato; Hix, and Hix Oyster & Chop House; Kym’s by Andrew Wong; Merchants Tavern; Rochelle Canteen at the ICA; Roux at Parliament Square; The Square; and Texture.