As a result, Prime Central restaurateurs
are being forced to spend an ever higher
proportion of their turnover on rent –
currently equivalent to an average of 16%
of turnover, up from 10% in 2006, and 13%
in 2011. If the rate of growth does not
slow, Cedar Dean Group forecasts that
operators will be paying an average of
20% of turnover in rent by 2021.
More than a third (36%) of London’s
restaurateurs say they are paying 20%
or more of turnover in rent already,
despite the long-held rule of thumb that
restaurateurs can afford to pay, at the very
maximum, 15% of their turnover on rent.
David Abramson, CEO of Cedar Dean
Group, comments: “Rising rents have
outpaced inflation and far surpassed
growth in the rest of the capital. Looming
business rate reviews are adding further
to the cost pile. And whilst the new breed
of ‘supertraders’ like Five Guys and Shake
Shack (main photo) are adding much colour
to the market they are having a negative
impact on the incumbents and pricing them
out of the market. We have reached
a tipping point where this crucial layer
of London’s identity could be about to
peel away.
“To cling onto our family run culinary
heritage independent operators,
Government, industry and restaurateurs
must work together to call for change. It is
time to adapt or die. While interventionist
measures like rent caps or business rate
relief could ameliorate restaurants’ woes,
business owners must also play their
part. Having the confidence to adopt
all-day dining models can boost the
covers a restaurant can process