Jamie Oliver is learning a lesson about restaurants

Independents may be more resilient in a competitive market, writes Stephen Jardine

When it comes to running restaurants, the past week has taught one big lesson: be careful what you wish for. Stood at a stove with no customers on a quiet Monday in February, running a restaurant must seem like a dream that’s turned into a nightmare. As Jamie Oliver is discovering, the bigger they are, the harder they fall.

The chef ’s Jamie’s Italian brand is preparing to close 12 restaurants and axe 450 staff after losing more than £10 million last year. It is reported to have run up total debts of over £70m, including £2.2m owed to employees.

The problems are being blamed on poor trading conditions, rising food and staffing costs and a weakening pound. However, these factors afflict every other restaurant in the country so clearly something is missing and the Italians have a word for it. Autenticità, or as we call it, authenticity.

I like Jamie Oliver. He has done more to change the popular food culture of this country than just about anyone else. His books are everywhere and his accessible style has made a younger generation engage with cooking like never before. Quite rightly that has brought him rewards but it doesn’t take much for a runaway success to run out of control. Who decided we had a shortage of good Italian restaurants in this country? That seemed to be the motivation behind the Jamie’s Italian brand when it launched ten years ago when in fact the opposite was true. We all have a great Italian restaurant nearby – this country is full of them – so the last thing needed was an overhaul and reinvention by someone who wasn’t even Italian. Untroubled by that and pushed to grow and build by the corporate machine behind him, Jamie launched a sister brand called Union Jack restaurants with four branches down south.

They served up “British-style flat bread pizza” but the concept baffled customers and the last branch closed last year. Another venture into the world of barbeque also proved to ill-fated and the two main London branches are now up for sale. With an estimated net worth of £240m Jamie won’t expect or receive much sympathy but he can find solace with the private equity masters behind other chain restaurants mired in trouble. Having also settled on pizza and pasta as easy pickings, Strada are now closing a third of their restaurants as the company says they are “no longer viable in the increasingly competitive market”.

Struggling burger business Byron blamed similar factors when it announced plans last month to close 20 sites as part of a restructuring to keep the business afloat.

All of this begs the question, who made the market so competitive in the first place? Right now, Edinburgh is a great example of a location being flooded by chain restaurants regardless of the consequences. That is worrying and in the first column of this year, I predicted not all will survive. However, perhaps the Jamie Oliver story shows it is the big brands who have most to worry about. With authentic food, loyal customers and tighter cost controls, independents can adapt. In contrast, the chain restaurants have only their size and, as we know, that isn’t everything.