Food for thought
Restaurant closures show we need to rethink the high street
Another week, another round of restaurant closures and redundancies. The Italian chain Prezzo is likely to shut 100 of its 300 outlets, while its Texmex unit Chimichanga might close completely. Over the last few weeks, Jamie’s Italian has had to restructure, and so has the upmarket burger group Byron. The “casual dining sector”, as the marketing gurus describe it in their Powerpoint presentations, is suddenly in big trouble: so much so that some analysts have talked of a “restaupocalypse” sweeping the industry.
That is sad, of course, for the companies themselves, and the people who work for them. But it is something else as well – a tragedy for the traditional town centre. Many shops have already closed down, and more are running into trouble every week.
The banks are closing branches and the estate agents won’t be far behind. If the burger and pizza chains close as well, then soon only the charity shops will be left. That surely should be the trigger for fundamentally reassessing the way our town centres work before it is too late.
Rewind a few years, and smart, mid-priced restaurant chains were booming. Every high street was packed with pizza, burger and steak chains while every old-style boozer was quickly refurbished as a gastropub. All you needed was a clever idea for a theme – Thai with a twist of Moroccan or pizza crossed with sushi perhaps – and the venture capitalists and private equity houses would happily throw a few tens of millions at you to launch a hundred outlets across the country. The British had discovered an appetite for dining out on a regular basis, and were ready to try out new flavours. From 2009 to 2016, the number of restaurants rose from 63,000 to 83,000, and the number of us eating out at least once a week rose to 43pc.
But this year, it has all turned sour, with chain after chain restructuring or cutting back. The reasons are not hard to figure out. Business rates are punishing, as they are for many shops. The national living wage has pushed up staff costs. Leaving the EU may reduce the number of Eastern Europeans on whom many chains rely.
Consumer spending has been squeezed. The craze for app-based home delivery means there is more competition. And the market may well be saturated. Against that backdrop, it is hardly surprising that many chains are struggling.
The trouble is that it is going to hit town centres hard. Booming restaurant chains were one of the things keeping them lively even as many of the shops closed down. It meant people were heading into town in the evening, or staying longer to get some lunch after doing some shopping. Some of the problems can be fixed, of course. We could do something about business rates if we wanted to, and the living wage doesn’t have to keep going up. But if much of the problem is structural, it is not going to be turned around easily. It is hard to imagine there are going to be many takers for all the vacant premises after the restaurants close down.
What we really need to do is begin radically reinventing the traditional town centre. How do we do that? Here
‘Booming restaurant chains were one of the things keeping town centres lively even as shops closed down’
are two good places we could start.
First, traditional shops and restaurants might be running into trouble, but the self-employment and small business sector is booming. The number working for themselves is now 16pc of the workforce, and will soon overtake the public sector.
The number of businesses in the UK has risen to 5.7m, an increase of 2m since 2000. The vast majority of them are micro enterprises employing fewer than nine people. We need a lot more small office space for all those companies, and a lot more shared hot-desking spaces as well for all those self-employed freelancers. A lot of empty town centre space should be converted to meet that demand.
Next, we desperately need more residential housing. We aren’t building enough homes, and prices have risen so high that many young people are giving up on owning a place of their own. Sure, some people want to live out in the suburbs. But plenty would like to live in the town centre.
There is no reason why shops, banks and now restaurants shouldn’t be converted into flats.
As the restaurants close down, the town centre is going to hit a crisis point. There is no sign of a new wave of businesses to take up the space that is coming vacant. It is pointless to leave it empty. It should be re-zoned as offices or flats, so that town centres can be reinvented as places where people work and live rather than shop and eat. Otherwise they will end up completely abandoned and desolate – and then no one will want to visit them.