It might be a stretch to suggest that London is in The Age of the Small Chain. Street food and ‘indies’ are still very much in vogue. But smaller operators, while perhaps not quite so fashionable, are having a major impact on the capital’s dining scene. Scalable efficiency combined with a considered concept and branding is outperforming the high street's big hitters, a new report says.
The report, published by AlixPartners and CGA, shows "ambitious casual dining groups are chasing household names." Small chains, with fewer than 25 restaurants, have grown in size (number of sites) by 32% in the last three years. Medium-sized companies, meanwhile, with between 25-99 outlets, increased their number by a 47.7% in the same timeframe.
Unsurprisingly, London is a breeding ground for such growth and it’s here the small-to-mid bubble boom is most noticeable. Those (former) financiers who set up or bought quirky, accessible trading posts are now would-be restaurant powerhouses, growing rapidly while still retaining enough semblance of authenticity and localism. Small brands have seen a 37.8% increase since June 2014. The big players, meanwhile, have experienced a 4.3% drop.
AlixPartners and CGA said in the report that the figures are “proof of the number of fresh and dynamic brands now hitting the mainstream in casual dining.” Mentioned are the likes of Wahaca, Honest Burgers, and Pho, which are all expanding rapidly; in tandem, smaller names such as Franco Manca and Pizza Pilgrims are surging too. The latter, of course, is soon to break out of London, with an opening due in Oxford.
AlixPartners managing director Paul Hemming said:
“The last twelve months have left the industry battling unprecedented levels of competition, unrelenting price pressures and an evolving retail market.
“As a result, casual dining chains have seen relatively little new investment activity, with many operators instead focusing on trimming tail sites from their estates. But despite these negative headwinds, small and growing innovative businesses continue to thrive across the country. Tired offerings that fail to evolve will have a limited shelf life, but for emerging operators with a differentiated, consistent product, there will still be ample room to blossom."
Not all small and medium-sized restaurants have enjoyed quite the same level of prosperity. In January this year, Jamie Oliver blamed Brexit for the closure of six of his Jamie’s Italian branches (which number around 30). But overall, the growth is overt.
Mexican fast casual Wahaca's co-owner Mark Selby told Eater London: “[I think the growth is] because we don’t act or think [of ourselves] like chains. Every restaurant is a new market, a new challenge and for us a completely new design and think. At Wahaca we don’t think of ourselves as a chain of restaurants but as a group of individual restaurants each, with their own character befitting the neighbourhood they are in. Our customers know and understand that about our business and I think ultimately respect that.”
Selby added that Wahaca is “constantly innovating.” He said: “I think a brand can keep going forever if it keeps innovating and making sure it has great people working within it. Nando’s has been the best example of that. At Wahaca, we could have grown a lot more quickly than we did but we are determined to keep hold of what makes us different and will do everything we can to protect that. Tommi [Miers, his business partner] and I want to be as proud in 10 years' time of Wahaca as we were on day one. That drives our every thought.”
A much smaller outfit, but one that is also expanding apace, is Rosa’s Thai. The chain now has 11 sites in London and is also set to open outside of London, in Liverpool. The restaurant is typical of what seems to succeed in London in 2017: an image of authenticity blanketed in provenance, casualness and comparative affordability.
Managing director Gavin Adair told Eater London: “Smaller chains are benefiting from the flexibility they have to meet ever increasing consumer expectations, and their desire to experience something different. Whether someone thinks of you as a chain or an independent is ultimately much less important than the experience they have when they dine with you.
“And you can keep each site 'independent', not just through design but through product and vibe, the latter driven by the team. At Rosa's many restaurants have specials exclusive to that site but only where a head chef is from a particular region or has a particular skill.”
Adair also talked about how to maintain quality after expansion, a perpetual issue for restaurants: “Relentless focus on the detail, while keeping a big picture outlook. Food quality and good business sense aren’t mutually exclusive, in fact long-term they’re intrinsically linked. The only way to build a sustainable business is to keep your quality up.”
How and whether Brexit might render all of these best practices utterly redundant remains the industry's great unknown.