It’s hard to pick up a newspaper these days without coming across a story about a nationally-known chain of restaurants hitting the skids.

It’s not just major firms like Byron Burger and Prezzo that are teetering on the edge of oblivion; outlets operated by celebrity chefs are also up for the chop.

Jamie’s Italian is a great example of this, with its huge initial expansion seeming a little hubristic now that a third of its locations are reportedly set to shut this year.

In 2017 there was a 20% rise in restaurant closures, which suggests that the epidemic is gaining traction.

So, what’s the cause of all this carnage, and are there any lessons to learn from the mistakes that big chains and famous chefs have clearly made in their own operations?

“It’s the economy, stupid!”

With Brexit lurching ever-closer, consumers have been tightening their purse strings and battening down the hatches in the face of uncertain economic times ahead.

Chain restaurants have been especially exposed to the reining-in of consumer spending, with people choosing to eat out less and cook at home instead.

There’s not much that can be done about the political problems that are creating this state of affairs, but it’s important for independents to keep abreast of developments and avoid overstretching themselves.

The chains that have suffered most are those that spent big and moved into as many locations as possible without taking into consideration the fact that economic booms are often followed by huge ‘busts’.

Oversaturation is rife

A lot of retail experts complain about the identikit high streets across the UK, and the same problem exists in the restaurant biz.

Towns that would have been lucky to have just one big chain eatery a decade ago are now swamped by virtually indistinguishable venues.

The fact is that unless there are enough people to actually make this multitude of restaurants viable, many will inevitably wither and die.

Independents can capitalise on this by standing out from the crowd and offering something different.

Costs are creeping upwards

Chains are being pinched from two directions when it comes to operational costs, especially in London and the south east.

Rents in the capital are already incredibly high, meaning that some chains are having to run their flagship outlets at a loss just for the prestige of having a presence in high profile locations.

Meanwhile staffing costs are also growing, with the recent bump in the minimum wage and the lower availability of workers from elsewhere in Europe putting added pressure on the marketplace.

Some industry insiders think it makes more sense for restaurateurs to start looking outside of London for locations in which to set up shop – specifically because the economic clout of the capital is hanging in the balance and costs show no signs of dipping.

Wrapping up

Just as Icarus flew too close to the sun, the big chain restaurants have let their hunger for expansion get the better of them.

Independent restaurants might therefore be forgiven for thinking that it’s sometimes better to be cautious and unique than overconfident and ubiquitous.

Image credit