In September 2017, Jamie Oliver received the kind of phone call that causes the bottom to fall out of your world – if not, in a moment of vertiginous panic, the world to fall out of your bottom. While filming for Channel 4’s Friday Night Feast with the actor Liv Tyler, he was told that his debt-ridden Jamie’s Italian chain was about to collapse. “I had two hours to put money in and save it or the whole thing would go to shit. It was as dramatic as that,” Oliver told the Financial Times.
This week, the worst finally happened. Despite a raft of closures and the loss of 600 staff, despite Oliver ploughing in £13m and a £37m loan from HSBC, almost all of Jamie Oliver Restaurant Group – which comprised 23 Jamie’s Italian venues and London’s Fifteen and Barbecoa – went into administration. In October, the group was reportedly paying off its final creditors as part of a voluntary arrangement meant to stave off this catastrophe. In its company filings, CEO Jon Knight was optimistic. “The quality of Jamie’s Italian offer, [its] food and healthy ethos sets it apart from the competition,” he reported.
This crash is but the latest chapter in the so-called casual dining crisis, which since early 2018 has seen various big-name brands (Byron, Prezzo, Gourmet Burger Kitchen, Carluccio’s) enter company rescue schemes. Last year, the accountants UHY Hacker Young found that 37 of Britain’s top 100 restaurant groups were loss-making. Overall, their pre-tax profits were down 89% on the first quarter of 2017.
Hospitality execs blame all this on a perfect storm of problems. In 2015, rents began to rise rapidly, doubling in some cases. Then, in 2017, a business rate review (“a fucking nightmare”, as one owner described it to me) lumbered operators with further huge costs – a bill of £42.7m across London’s 7,100 restaurants, calculated analysts CVS. Throw in rising food, utility and wage costs (question: how viable is an industry that cannot swallow even modest increases in the “national living wage”?), and at a time of weak consumer demand, the result has been widespread closures.
That narrative, however – the implication that the industry has been buffeted by powerful forces it cannot control – is both true and, simultaneously, a case of denial. This was not a natural disaster. To a great extent, the mid-market chains have dug their own grave. Fuelled by cheap bank debt and an injection of private equity money (MO: expand quickly, sell up), many grew too quickly in too many locations, recklessly outbidding each other on sites and creating massive oversupply. How daft did it get? In 2015, facing what he considered untenable rent increases, David Fox, who runs six East Street and Tampopo restaurants, was paid £1.3m to hand back the keys at sites in Reading and Bristol, presumably because another operator was desperate to move in.
This was a bubble, a mass delusion among operators convinced that Britain’s appetite for samey chain restaurants was insatiable. Even now, these troubled chains display a baffling confidence. Like Jamie’s Italian, they are refreshing menus, going upmarket or lowering prices (depending on the focus group) and redecorating tired sites. Instead they should be asking, painful though the answer may be, the bigger question: what purpose do we serve? What is our reason for existing?
The concept of the “quality chain” of restaurants was always an unsustainable oxymoron. Almost inevitably, the larger a restaurant brand gets, the worse its product becomes. This might be an issue of training and motivation, or lack of oversight from the original, inspirational owner or the bean-counters at head office driving down wage and ingredient costs – but it is true. In 2008, the Times restaurant critic, Giles Coren, declared Jamie’s Italian “streets ahead of any Italian chain”. In 2015, the gloss having come off its organic olive oil and imported charcuterie, the chain had, according to the same paper, “the worst average ratings on Google Reviews of any comparable chain”.
Is Jamie Oliver culpable for that? Yes and no. His dream of using a chain’s economies of scale to deliver relatively affordable, broadly authentic Italian food to a mass audience using, for instance, “higher welfare” meat, was not a bad one. He was trying to add a splash of Mediterranean colour to what, outside of London, in 2008, was still a pretty drab British culinary landscape.
His mistake was in believing this was possible as a remote, hands-off owner (worth a reported £150m; so let’s save our tears for the 1,000 people who lost their jobs this week). Contrast that with the chef Gary Usher, who, in the north-west and using crowdfunding rather than bank or investment capital, is currently building a chain with the tongue-in-cheek-name Elite Bistros. Usher now has six individually branded sites of impeccable quality. He has achieved this by growing at his own pace, promoting talent from within, and tirelessly scrutinising each restaurant day to day. He might be able to handle up to 10 venues as far afield as Leeds, Chester and Birmingham, before the wheels come off. But grow beyond that, and they surely will. That is the nature of the chain beast.
Of course, we do not judge all chains on quality. We eat at Greggs or McDonald’s on price. Nando’s and Wagamama retain our loyalty because they have a unique selling point and, often, few direct rivals. They serve a purpose. But in future, in order to justify boring uniformity, any chain with national ambitions will, I feel, have to have an ethical agenda at its core: a reason for being. Interestingly, bucking the trend, Leon’s sales were up 15% in 2018, largely driven by its vegetarian dishes. If there is a gap for an exciting chain that would capture the imagination (in the way that early Jamie’s did), it is surely in a Living Wage employer using its economies of scale to deliver competitively priced, ethical, meat-minimal fast food of reliable quality to every corner of Britain – a kind of woke Greggs.
Stepping up into the quality restaurant sphere, no chain is going to thrive, as Jamie’s and Byron attempted to, by charging similar prices to high-quality local independents, in sophisticated provincial cities. Fundamentally, outside the capital, both patronised their target markets by attempting to trade on celebrity or residual London cool, in a way that made them look outdated.
As a nation, Britain is increasingly food literate. An explosion of street food and the spread of Instagram mean that hot dishes in London, New York or Copenhagen can cross over nationally in months. Where once Byron opening in Manchester might have been news (ridiculously, it once had three Manchester city-centre branches), now most cities have their own independents serving incredible burgers to a loyal local audience. From Dover to Dumfries, discerning foodies are enjoying the latest poké, tacos, bao, hoppers and plant-based brunch dishes, before the chain that might once have popularised them has put its initial funding together.
It is not just a timing issue. It is a generational shift. Surveys of millennials (and older food lovers, for that matter), suggest they crave new experiences, which, with their fake-indie, faux-individual interiors and sluggish menus, national chains are poor at delivering. Byron last year introduced more meat-free burgers as part of its relaunch, responding to a consumer trend which, it seems, they were the last people in Britain to notice. It is notable that, inspired by Altrincham Market House and others, a lot of money is currently pouring into “food halls”, communal canteens where diners eat from a variety of independent street food traders. So many food halls are in development, it might be the next British food concept to eat itself.
For now, though, it is connecting modern, food-savvy diners with what chains will never be able to provide: endless variety and idiosyncratic menus in interesting, unique buildings, cooked by driven individuals. At Manchester’s Mackie Mayor, Honest Crust serves one of the best wood-fired Neapolitan pizzas in Europe for £9 to £12. Or you could pay £12 to £16 for a main course at Jamie’s Italian. Is it any wonder it went bust?
• Tony Naylor is a Manchester-based journalist
