Hospitality Today Oct-Nov 2016 - Page 5

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