Board

Market predictions

04_ Opportunities created by business disposals will see more independent operators emerge, particularly in the regions 05_ New entrants will exploit simpler entry levels and a stronger bargaining position on rent to deliver affordable dining to local communities 06_ Pub operators will continue the migration towards majority food-led operations

01_ London will continue to benefit from international investment 02_ London will continue to outperform the regions though performance will level out after the Queen’s Diamond Jubilee celebrations and the Olympics 03_ There will be further distress and administrations

2012

In an environment where the consumer definitely became

arrangement with the purchase of The Little Manor in Thelwall, Cheshire. The growing stature and confidence of this sector was further indicated in M&B’s proposals to open ‘grab and go’ Toby Carvery outlets in shopping centre food courts, airports, railway stations and motorway service stations. All of which places additional pressure on the traditional restaurant sector. Whilst new developments were relatively thin on the ground and transactional activity centred chiefly on the recycling of existing sites, there were those who took the opportunities that this environment presented. New market entrants realised they would be taking a risk, but with lessees in a strong bargaining position in terms of rent agreements with landlords, many considered it a risk worth taking. A number of newcomers, encouraged by some excellently-priced opportunities, came in at a simpler entry point and were not seduced into taking a fine-dining lead from the likes of Masterchef or Raymond Blanc’s The Restaurant . Instead, what we saw was perhaps the beginning of a trend which will continue into 2012 – and that is a greater opportunity for the local independent restaurant.

Competition to the traditional restaurant sector is emerging from many quarters and consumers have never had a greater choice, especially with prices for dining on a par with 2005. Those who chose to eat at home were also able to take advantage of the economies of scale generated by supermarkets with their ‘ just like dining out’ ranges. Using promotions, like Marks & Spencer’s ‘Eat in for £10’, diners were spoilt for choice and supermarkets were able to leverage their position. Pizza delivery chains also saw improved trade and began to boost their own in-town high-street presence to add to their out-of- town offerings. Food-led pubs also took a bigger share of the dining-out market in 2011. Placing the emphasis on affordable family-friendly dining and led by the behemoth M&B Toby Carvery and Harvester brands, pub dining certainly enjoyed a meteoric rise, to the extent where food-led pubs outperformed and outnumbered their traditional wet-led counterparts for the first time. Smaller food-led pub operators like Brunning & Price, part of The Restaurant Group, also sought to capitalise 0n the growing trend. During 2011, Christie + Co began working with Brunning & Price to find new properties to support the company’s plans for expansion. The company acquired its first pub in this

king, and increasingly kingmaker, restaurants generally had a year where revenues were at best on an equal footing, costs went up and margins, inevitably, tightened. The marketplace, like others, was not conducive to great lending activity – new developments were virtually non-existent and transactional activity was focused on the recycling of existing sites and distressed sales. The deal late in the year which saw the eight restaurants of the Chez Gérard chain acquired by Brasserie Bar Co, operator of Brasserie Blanc, for around £9 million was symptomatic of this. Almost simultaneously, Paramount Restaurants, owner of Chez Gérard, entered administration. London and top-end fine dining outperformed the rest of the sector, with those restaurants listed amongst the top-20s in the various London, particularly, given its international context and overseas investment will continue to benefit from tourist and visitor spend, although even the capital’s immune position may be compromised after the Olympics as peak visitor numbers are likely to drop off. restaurant magazines and newspaper supplements continuing to do well.

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