Restaurant chains grow despite war rumblings

Terrorism and international conflict have done nothing to dampen the business strategies of midmarket restaurant groups, which say the threat of war has not deterred them from their expansion programmes.
Despite tourist bookings down 7% on last year and London restaurateurs reporting the West End being quieter at night, many businesses are determined to implement their expansion programmes to the full.

Chicken restaurant chain Nando’s aims to open a least 20 sites over the next year, while Ask Central, which operates 146 outlets, reported continued improved trading across its restaurants and said its plan to open 25 to 30 restaurants in 2003 was on schedule.

Finance director Martin Eckersley said: “The effect of the geopolitical uncertainty is extremely difficult to monitor. However, we believe that to date it has had no perceivable effect on our business.”

Many groups admitted trading in London had suffered a slight downturn but put it down to the combined effects of the collapse of the US stock market, 11 September and the foot-and-mouth epidemic.

James Horler, chief executive of the Restaurant People group, which bought the 30-strong La Tasca chain in 2001, is fully aware of the effect of terrorism. The group has no plans to delay opening a further 10 restaurants this year, although none will be in London.

“We would be nervous about expansion in London, but the rest of the country shouldn’t be affected,” said Horler. The company’s reticence about expanding in London was mainly due to the high rents and operational costs.

While Yo! Sushi sets its sights on expanding abroad, managing director Robin Rowland admitted trade at its Poland Street site in London had suffered, but that its sites in Selfridges and Harvey Nichols had had “gangbuster years”. The company is to open three new outlets in the UK this year, although it said it was being more cautious in its strategy.

“We’re not slowing down as much as just being more selective. We are sticking to our formula and opening in secure sites this year – we can’t afford to make any mistakes. We are spending less on sites and taking our time choosing them.”

Mayor Ken Livingstone and Westminster council are as much to blame for a quiet West End as anything else, commented Wagamama chief executive Ian Neill. He has no intention of changing plans to open eight sites this year and did not believe the outbreak of war would have an effect on business.

“We’re doing very well at the moment,” he said. “Whilst things aren’t ideal with the jobs market, our price points seem to be something that people find acceptable.”

Expansion plans for 2003

by Helen Adkins

Source: Caterer & Hotelkeeper magazine, 6 - 12 March 2003