Less modesty, more belief and confidence

If there were a collective award going to the British restaurant and bar business it would surely be bestowed for unfaltering modesty. If you listen to the British Retail Consortium, the UK is heading for a consumer-led recession. It piled on the doom and gloom this week reporting that retail shops saw same-store sales fall 2.4% last month against a year ago, and called for an immediate interest rate cut. But that’s not the picture coming from the eating-out market, nor even the London bar market, where consumers are increasing spending. Strong results from Mitchells & Butlers, the Restaurant Group and Caffe Nero over the last month were supported this week by Fuller’s, the London-based brewer and pub owner, which reported like-for-like sales at its City bars up 5%, with second half recovery across its managed pubs and bars as a whole. At an informal gathering in London on Thursday of some of the sector’s more entrepreneurial operators, most were upbeat about trading, if a little nervous about admitting it. So why isn’t the industry shouting from the rafters that business is good and that eating-out, and even sensible drinking-out away from the binge excesses of provincial towns, is actually bucking the supposed consumer downturn? Is it modesty? Is it embarrassment after years of complaining how tough life is? Or is it that the leading companies don’t quite believe it and fear it may be a blip and things really will turn bad? The truth is that good, well-focused operators are doing well. There are strugglers, and some big ones too, but those poor results should be seen in the context of the tiredness of their brands and the limitations of their consumer offering, too often based purely on price. Even in the retail world there is a suspicion that although consumer spending is slowing, some of the bigger names are using talk of a general crash to camouflage their individual failings. After all the BRC had to admit that despite the headline like-for-like fall, total sales - including new store openings – still increased by 1.4%. Interestingly, a survey carried during March and April across the retail sector by RPS (Retail Performance Specialists) revealed that "inattentive staff" followed by "wrong stock" were the main killers of sales on the high street. But that’s another story. In this climate, there is a strong, if not overwhelming, case for the restaurant and bar sector to grab the opportunity to tell the rest of the world just how well it is performing. There are good reasons. First it can help attract the best people to the sector, from waiters and bar staff to senior management. It can also help attract new investment to the industry, and at the moment there is no shortage of groups looking for new backers to help them drive their next stage of development. Just as the current crop of trading figures underline the fact that eating-out has become an everyday part of the British way of life, and a market worth £36bn a year, the sector should also now be working to get itself into the position where it is seen as a natural long term bet for investors. It is time to dispel all the old prejudices about backing restaurants. But that will mean showing a little more belief, pride and confidence in the market. There is a sense, not unrelated to the current trading successes, that UK-based eating-out and restaurant brands, as well as some of its classier bars, are really coming of age. With the USA no longer the source of inspiration and new concepts it once was, British chains can claim to be among the best in the world. There is a real potential for some to grow into powerful brands in a broader retail sense and to look increasingly beyond their domestic market. The likes of Nando’s, Wagamama and Caffe Nero are already moving down that route and with the right imagination and support the likes of La Tasca, Loch Fyne and Carluccio’s could easily follow. There is no reason that the UK can’t produce the next Starbucks. But success needs to be fuelled and encouraged, and modesty is not normally listed among the virtues of the great business leaders.