Another business going under

[Mr D]

Jamie Oliver's restaurants mostly closing.

However the perfect storm he describes will have hit all such eating establishments - yet not all of them are going under or indeed were going under the past 2 years.

Perhaps the other eateries had better business managers, better supply chains, better marketing etc. Anyone know?


https://uk.yahoo.com/finance/news/j...-of-collapse-risking-1300-jobs-104843944.html


"Over the course of several months in 2017 and 2018, the chef was forced to inject almost £13m of his own money into the company to save it from bankruptcy.

Discussing that move, the celebrity chef said a “perfect storm” had brought his restaurant chain to the brink, blaming a combination of high rents, rates, food costs, a decline of the high street, Brexit, and the increase in the minimum wage."

 

[WaveJumper]

His restaurants were not cheep & not the best food either, maybe he just took his eye off the ball

 

[intheTRADE]

As WaveJumper says.

I went to the one in Newcastle (already closed a while back before this announcement) and it was just overhyped and overpriced - Food was standard at best.

 

[WaveJumper]

I think we might need to worry more about where we are going to get our steel from very soon, lets hope we don't need to build some tanks on the quick ............. we may have to import them from China.

 

[MOIC]

The vast majority of businesses that have gone under are mainly due to poor management, who seem to act when it’s too late when the ship has already started to sink, if they act at all.

A business must always look forward and have contingency plans put in place for foreseeable short term hurdles. This is part of the job of management.

As far as Jamie Oliver’s business is concerned, most retail businesses have to contend with the same problems. If they cannot negotiate with their suppliers (very difficult), cut down on expenses and/or look for other ways to increase turnover in order to stay in profit, then the road ahead seems bleak.

Businesses have to adapt to survive. A food business should provide a delivery service where possible. This has been the trend for the past few years and is a possible reason for the decline in sit-in customers. For other types of businesses, an online presence is essential to increase the awareness of the business and an avenue for potential increases in turnover.

Very few businesses go into liquidation with no fault of management.

The bigger you are, the quicker and harder you fall, as one outlet with a problem, is multiplied throughout the entire business when management has not seen, analyzed or addressed the problem.

There are always new businesses starting, which take trade away from existing businesses. Most businesses are complacent and do not see this as a threat, until it’s too late.

The are always a (very) few exceptions that will survive due to having a niche product or can survive entirely on local trade . . . . . but for how long?

 

[Newchodge]

As WaveJumper says.

I went to the one in Newcastle (already closed a while back before this announcement) and it was just overhyped and overpriced - Food was standard at best.

Not only that, it was huge, 3 floors, I think, probably more than 300 covers. In the middle of a shopping area, not an area people went for a night out. Highly priced, and over-priced for the standard. Where did they expect their custom to come from?

 

[obscure]

I went once, while meeting some friends. Mediocre chain restaurant food, made worse by the fact it was Italian.

Italian food is simple. Fresh ingredients, cooked well, not too much messing about = spectacular.
OK ingredients even slightly overcooked with overdone sauces etc = yuk.

Jamies had the later. Places like that are only ever going to do well in a booming economy where people aren't bothered about overpaying for mediocre stuff.

 

[WaveJumper]

Perhaps we should start making a list of who we think is going to be next:

From BBC Business this morning
'Marks & Spencer has reported a a fall in both sales and profits as it continues to implement a major turnaround programme'.

'Pre-tax profits were down by nearly 10% in the year to 31 March, at £523.2m.
Like-for-like sales, which strip out the impact of new stores, were down by 2.9% for the group as a whole'.

We know they have been struggling for a number of years although maybe not in danger of total closure if they are struggling others are going to be in a dyer place?

 

[intheTRADE]

Not only that, it was huge, 3 floors, I think, probably more than 300 covers. In the middle of a shopping area, not an area people went for a night out. Highly priced, and over-priced for the standard. Where did they expect their custom to come from?

I don't think it was necessarily the area, just more the fact that the food wasn't great and you had to pay through the nose for it.

Places like the Botanist are in that area an do very well even with the extortionist prices

 

[Mark T Jones]

Interestingly he actually took responsibility prior to blaming everyone/everything else.

He had no involvement and little knowledge of what was happening in the business

In common with most of the high profile failures, they were simply repeating a tired formula whilst over paying for lease premiums and not controlling costs.

Of course, Brexit makes better headlines

 

[Ian J]

I went to the one in Newcastle (already closed a while back before this announcement) and it was just overhyped and overpriced - Food was standard at best.

Not only that, it was huge, 3 floors, I think, probably more than 300 covers. In the middle of a shopping area, not an area people went for a night out. Highly priced, and over-priced for the standard. Where did they expect their custom to come from?

I don't think it was necessarily the area, just more the fact that the food wasn't great and you had to pay through the nose for it.

For any older Geordies with long memories I had the Roulade Creperie in the now redeveloped Queens Square about thirty years ago.

I noticed that them what dined out seemed to have a favourite mid market restaurant that did very well for six months then the whole clientele would just decamp to the next one and patronize that for the next six months.

I must admit that I've never eaten in one of Jamie's establishments but I have had coffee in his Gatwick Airport place on several occasions but he won't have got rich off me

 

[Mr D]

I think we might need to worry more about where we are going to get our steel from very soon, lets hope we don't need to build some tanks on the quick ............. we may have to import them from China.

Was that a major consideration last year? Years previous?
Either it's cheaper elsewhere or more expensive elsewhere. If more expensive then the UK steel companies could put prices up.

Tanks I think you will find require a bit more than some nice shiny metal made from uk iron ore and uk carbon.

 

[Alyson Dyer]

Perhaps we should start making a list of who we think is going to be next:

From BBC Business this morning
'Marks & Spencer has reported a a fall in both sales and profits as it continues to implement a major turnaround programme'.

'Pre-tax profits were down by nearly 10% in the year to 31 March, at £523.2m.
Like-for-like sales, which strip out the impact of new stores, were down by 2.9% for the group as a whole'.

We know they have been struggling for a number of years although maybe not in danger of total closure if they are struggling others are going to be in a dyer place?

Oy! Stop using my name in vain!

On the subject of M&S, I'm not surprised. They used to be the first place to look for ladies office wear, sensibly priced, well made black and navy skirts trousers and jackets to flatter the shapes of their target customers. No longer the case.
I am supposed to be their target demographic, but the clothes are awful and far too old fashioned for my tastes and that of my friends and colleagues. They have no chance of selling to many women under 40. If you appeal only to the over 75s you can expect your sales to plummet.
No longer the go to place for underwear either.
As for their food halls, the fresh food is good quality but expensive and their ready meals, once the brand all others wanted to emulate is no better and certainly no more imaginative than the big supermarkets and as I can't do the whole of my weekly shop there it's too much effort for too little gain.

 

[TotalWebSolutions]

My wife and I have eaten lunch in the one on King Street in Manchester a few times. The food was good as was the service and the building fabulous (the old Midland bank). What we noticed on each occasion was the amount of people presenting Groupon vouchers to pay for their meal (presumably a set menu). Do restaurants rely too heavily on these deals to fill their covers day in day out?

 

[Mr D]

My wife and I have eaten lunch in the one on King Street in Manchester a few times. The food was good as was the service and the building fabulous (the old Midland bank). What we noticed on each occasion was the amount of people presenting Groupon vouchers to pay for their meal (presumably a set menu). Do restaurants rely too heavily on these deals to fill their covers day in day out?

I saw an article on groupon a couple of years back, suggesting it was used as a means of drumming up trade however getting repeat customers off the back of it was harder. And the cost was such that a deal could result in an overall loss.

 

[Darren_Ssc]

Do restaurants rely too heavily on these deals to fill their covers day in day out?

Tesco Clubcard deals also, basically giving food away to fill tables. And, when all these food outlets are bunched together, it becomes a vicious circle with each place wanting to look busier than the rest.

Some things seem obvious when looking from the outside as a casual observer rather than being actually involved up to one's armpits.

 

[Andy Harris]

I dined at another chain yesterday (Zizzi) - food great but they had no idea about ongoing promotion:

1. There was a 'rate us on tripadvisor' card hidden under the part of the bill that I don't bother keeping (when it should have been brought to my attention separately, in person from the waiter). So I haven't rated them.

2. There was no attempt to get any email address etc. from me (to get onto their list).

Total complacency and ignorance of how these things work.

 

[Andy Harris]

And while we're bashing complacency: I'll have a pop at Saga - I'm not far off their target age/demographic and yet have seen zilch from them in any form, pulling me into their funnel.

 

[Mark T Jones]

I saw an article on groupon a couple of years back, suggesting it was used as a means of drumming up trade however getting repeat customers off the back of it was harder. And the cost was such that a deal could result in an overall loss.

True. But presumably that would apply to any form of marketing-promotion used cluelessly.

 

[deniser]

The main problem with Jamie's is that, when there are one or two, they are special. As soon as they appear all over the place, they become just another chain where management loses control and they become mediocre as well as boring.

The other factor is that what works in London, with a large demographic and huge amount of tourists (who aren't needed as repeat customers), doesn't necessarily work elsewhere.

I gave Jamies several chances in different locations and only once had a good meal. The service was rubbish and the food far too salty. The final straw was when my daughter ordered a main course ravioli and there were four small pieces of ravioli on her plate.

I called the manager, and said she had accidentally been served the starter portion. She agreed it looked small, went to the kitchen to consult the chef and came back confirming that, having checked in the handbook, it was indeed a main course portion size and cost about £14. Now my daughter eats very little but even she was aghast. The manager looked embarrassed and offered to cook her another one but by that time we had had enough and we left vowing never to go there again.

I just hope the Ivy Brasserie isn't going to go the same way. At the moment their food and service standards are still high - hope it stays like that as one can't hep noticing the rapid rate of expansion.

 

[intheTRADE]

For any older Geordies with long memories I had the Roulade Creperie in the now redeveloped Queens Square about thirty years ago.

I noticed that them what dined out seemed to have a favourite mid market restaurant that did very well for six months then the whole clientele would just decamp to the next one and patronize that for the next six months.

I must admit that I've never eaten in one of Jamie's establishments but I have had coffee in his Gatwick Airport place on several occasions but he won't have got rich off me

There is a lovely place there now called Coffee Trader which is one of my regular jaunts.

I would of only been a toddler when you were there but the name does ring a bell somewhat

 

[Ian J]

My What we noticed on each occasion was the amount of people presenting Groupon vouchers to pay for their meal (presumably a set menu). Do restaurants rely too heavily on these deals to fill their covers day in day out?

There was comment in the press that Jamie's relied too much on Groupon discounts and Groupon users aren't particularly loyal but will go where the offers are good.

Some friends took us to Purnells in Birmingham (Michelin starred restaurant) using a discount code and whilst we enjoyed the visit I wouldn't go back unless I had another code

 

[Newchodge]

There was comment in the press that Jamie's relied too much on Groupon discounts and Groupon users aren't particularly loyal but will go where the offers are good.

Some friends took us to Purnells in Birmingham (Michelin starred restaurant) using a discount code and whilst we enjoyed the visit I wouldn't go back unless I had another code

My sister in law regularly goes for short breaks at a local (expensive) spa hotel. She goes only when there is a groupon code, giving about 75% off. Is that a viable business model?

 

[Mark T Jones]

My sister in law regularly goes for short breaks at a local (expensive) spa hotel. She goes only when there is a groupon code, giving about 75% off. Is that a viable business model?

The answer is it depends if they know what they are doing

I don’t know the figures or the variables but an experienced operator will - or will be able to dig them up, but for illustrative purposes and made up figures

• Hopefully they aren’t selling at a gross loss - so (arguably) it isn’t costing them anything
• 50% if takers are tightwads who can’t be upsold - meaning that 50% can be sold extras such as sides, drinks, and merchandise
• 10% will return as paying customers
• 10% will recommend you

Like any marketing, it’s really about the process not the event.

 

[Mr D]

The answer is it depends if they know what they are doing

I don’t know the figures or the variables but an experienced operator will - or will be able to dig them up, but for illustrative purposes and made up figures

• Hopefully they aren’t selling at a gross loss - so (arguably) it isn’t costing them anything
• 50% if takers are tightwads who can’t be upsold - meaning that 50% can be sold extras such as sides, drinks, and merchandise
• 10% will return as paying customers
• 10% will recommend you

Like any marketing, it’s really about the process not the event.

There is also the issue of covering costs. If £1000 a day is the cost of the business and a load of new business is generated temporarily that covers the cost of a day in full, then other sales / services are making a lot more profit.

Its basically how businesses can do something and promise the profit from sales in this promotion will go to charity - they are minting money if done right while covering costs using promotion.

 

[Chris Ashdown]

I never understand the vast amounts spent on opening these restaurants, millions seem to be the lowest numbers and to do what offer fixed menu basic food and generally overpriced

The competition is often pubs and basic restaurants but with great chefs and changing menus at lower costs and no fancy layout , furniture, or loud music, but with great service

Most great chefs dont open chains but concentrate on staying local to their customers and offering variety, quality and a very nice eating out experience

 

[Mr D]

I never understand the vast amounts spent on opening these restaurants, millions seem to be the lowest numbers and to do what offer fixed menu basic food and generally overpriced

The competition is often pubs and basic restaurants but with great chefs and changing menus at lower costs and no fancy layout , furniture, or loud music, but with great service

Most great chefs dont open chains but concentrate on staying local to their customers and offering variety, quality and a very nice eating out experience

Perhaps overpriced precisely because of the sums spent.
Capital should be factored into pricing at some point.

 

[Ian J]

I never understand the vast amounts spent on opening these restaurants, millions seem to be the lowest numbers and to do what offer fixed menu basic food

We go to Playa Blanca in Lanzarote every Easter for a fortnight and every year we notice that four or five of the restaurants that were there the previous year have shut down. Instead of new owners just moving in all of the restaurants are gutted and rebuilt.

If I had my time over again I would be a shop fitter specializing in restaurants in Playa Blanca as I'd never be out of work

 

[Darren_Ssc]

If I had my time over again I would be a shop fitter specializing in restaurants in Playa Blanca as I'd never be out of work

Could you cope working flat-out for one hour a day though?

 

[Ian J]

Could you cope working flat-out for one hour a day though?

It is quite a bit more than I'm used to but I'm sure that I could work my way up to it

 

[Mark T Jones]

I never understand the vast amounts spent on opening these restaurants, millions seem to be the lowest numbers and to do what offer fixed menu basic food and generally overpriced

The competition is often pubs and basic restaurants but with great chefs and changing menus at lower costs and no fancy layout , furniture, or loud music, but with great service

Most great chefs dont open chains but concentrate on staying local to their customers and offering variety, quality and a very nice eating out experience

Despite the fact that I earn money from it, it really bothers me how much money smaller operators throw at their fitout.

So much so that I wrote a post on it https://www.linkedin.com/pulse/you-wouldnt-sprint-start-marathon-mark-t-jones

 

[P19Johnson]

I think one factor Jamie had in his favour when setting up his restaurant chain is that he could use his name to create a hype around the restaurants. However, this eventually wears off, especially when people start seeing critics opinions on the food served.

It seems to me there are mixed opinions on Jamies (like any restaurant would have) however due to status a lot of us hold him at, we expect it to be the best food, service and overall experience we've ever had. Customer experience is so important!!

 

[Mr D]

I think one factor Jamie had in his favour when setting up his restaurant chain is that he could use his name to create a hype around the restaurants. However, this eventually wears off, especially when people start seeing critics opinions on the food served.

It seems to me there are mixed opinions on Jamies (like any restaurant would have) however due to status a lot of us hold him at, we expect it to be the best food, service and overall experience we've ever had. Customer experience is so important!!

Indeed, people can always make a much cheaper meal themselves. They go to a restaurant for the experience. Bad experience and you do not return. Good experience and you may.

 

[alan1302]

Indeed, people can always make a much cheaper meal themselves. They go to a restaurant for the experience. Bad experience and you do not return. Good experience and you may.

Sounds like my mums kitchen!

 

[Mr D]

Sounds like my mums kitchen!

Funny you should say that. I tend to avoid my mum's cooking.
When I go visit we go out for a pub meal or I eat sandwiches there.

 

[Chris Ashdown]

First class restaurants tend to get Michelin stars, None of Jamie's restaurants or franchises have these stars, Gordon Ramsay's restaurants have been awarded 16 Michelin stars in total and currently hold a total of 7.
Guess Jamie is all publicity and average cooking skills

 

[Mark T Jones]

First class restaurants tend to get Michelin stars, None of Jamie's restaurants or franchises have these stars, Gordon Ramsay's restaurants have been awarded 16 Michelin stars in total and currently hold a total of 7.
Guess Jamie is all publicity and average cooking skills

Michelin restaurants are set up and run in a very distinct way - one which is very heavy on staff overhead and which is designed to appeal to both the judges (if that’s the right term) and to the type of people who are happy to pay for Michelin standards (it’s not just about the food quality)

Jamie’s was never designed to be that sort of venue; it was mid- market, family-friendly casual dining. With -initially - a clear set of values.

 

[promdressers]

Jamie Oliver's restaurants mostly closing.

However the perfect storm he describes will have hit all such eating establishments - yet not all of them are going under or indeed were going under the past 2 years.

Perhaps the other eateries had better business managers, better supply chains, better marketing etc. Anyone know?


https://uk.yahoo.com/finance/news/j...-of-collapse-risking-1300-jobs-104843944.html


"Over the course of several months in 2017 and 2018, the chef was forced to inject almost £13m of his own money into the company to save it from bankruptcy.

Discussing that move, the celebrity chef said a “perfect storm” had brought his restaurant chain to the brink, blaming a combination of high rents, rates, food costs, a decline of the high street, Brexit, and the increase in the minimum wage."

I suspect that things started to go wrong when it was admitted that a proportion of the meals were prepared off site, and reheated at the restaurant.

 

[Chris Ashdown]

Michelin restaurants are set up and run in a very distinct way - one which is very heavy on staff overhead and which is designed to appeal to both the judges (if that’s the right term) and to the type of people who are happy to pay for Michelin standards (it’s not just about the food quality)

Jamie’s was never designed to be that sort of venue; it was mid- market, family-friendly casual dining. With -initially - a clear set of values.

Mark i fully understand your point and its true to a point, but many small village and pub places without massive staffing etc have had the stars, including one in my village which had one many years ago with very basic food mismatched furniture and quite a limited menu, with low normal pub levels of bill at the end. He did promise to bring quality to the public and spend millions trying to do it

There are 155 single star restaurants in the UK plus the 2 and 3 star ones

 

[Mark T Jones]

Mark i fully understand your point and its true to a point, but many small village and pub places without massive staffing etc have had the stars, including one in my village which had one many years ago with very basic food mismatched furniture and quite a limited menu, with low normal pub levels of bill at the end. He did promise to bring quality to the public and spend millions trying to do it

There are 155 single star restaurants in the UK plus the 2 and 3 star ones

It is certainly doable - i don't know the actual criteria, but I know they go far beyond just 'good food'

However the star system can never work with chain restaurants - in fact it kind of goes against the whole nature of chains.

I don't really know to what extent Jamie delivered on his quality promises; my guess would be that he did for a while, then let it slip when he passed over control