London restaurants defy recession as openings rise 9%

It's business as usual for London restaurants, according to the forthcoming 19th edition of 'Harden's London Restaurants', which shows many eateries are defying the recession.

The report highlights how the last 12 months have seen the lowest rate of restaurant closures in the capital since 2000 – just 64 in total.

Openings also staged a recovery from the depressed figure of 111 noted last year to 121 – a return to the decade's normal range (120-142).

Peter Harden, co-publisher of the guide, explained further: "Everyone, including us, thought that London's restaurants were in for a bloodbath in 2009. Well, it just didn't happen. Earlier this decade, closures twice rose into the 80s, and in 2003 they shot up to 113. Bizarrely, however, this year's figure of 64 was actually just below even 'normal' (65+) levels.

"There would seem to be no single explanation of why, during a period of such economic upheaval, the low rate of restaurant closures has so confounded the pessimists. One of the more important reasons may be that most restaurant-going Londoners are still in employment, and many of them have had their disposable income boosted by lower mortgage payments.

"Another is that active promotion by restaurants is no longer seen as embarrassing, and they have more sophisticated promotional instruments at their disposal (most particularly the offer-driven websites). Yet another may be that many restaurants close in London not because they have to, but because someone with a new venture in mind makes them an offer: if the banks take fright at providing finance for such new ventures, it diminishes the number of purchasers who can provide an exit route for restaurateurs wanting to sell up."

The average price of dining out in London, as recorded by the guide, is now £40.73. Prices rose during the year by a modest 1.6%.

Peter Harden added: "The Government's temporary VAT reduction does seem to have ended up being more a gift to the trade than to consumers: restaurateurs collectively have not only been able to keep the benefit of the 2.5% temporary reduction in VAT, but also to put their prices up by 1.6% on top of this.

"The VAT 'gift' must have helped soften economic realities for restaurateurs, and may help account at least in part for the surprisingly low level of restaurant closures of late. The reverse of the temporary reduction at the end of this year may therefore prompt something of a market clear-out."

The 19th edition of Harden's London Restaurants, in association with Rémy Martin Fine Champagne Cognac, will be published in early September (£11.99).

Weblink: www.hardens.com

Words: Clare Riley

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