Savvy consumers swarmed to London's Regent Park Thursday for the opening of Taste of London's four-day gourmet food festival. The event was teaming with cost-conscious foodies getting a chance to taste the wares of Michelin-starred chefs for a fraction of the price.
Taste incorporates 40 of London's top restaurants, each with a 3-course sampling menu — many showcasing their 'icon dish' — to buy with the festival's local currency, the crown.
Stalls offering everything from food, wine and spirits, baked goods and delis filled the grounds with special offers in abundance.
Despite UK retail sales posting a surprising drop in May and the country's inflation figure remaining above the Bank of England's 2 percent target, Taste defied the economic slowdown with ticket sales rising 21 percent and the number of exhibitors growing from 57 to over 90.
"You only have to look at the sheer decadence and opulence of some of the dishes on offer to see that Taste of London is clearly bucking the recession," Tessa Willmott, editorial director of Taste of London, told ThisIsLondon. "Chefs are continuing to seek out the highest-quality ingredients in a direct response to consumer demand. People may be able to forgo some luxuries, but food is not one of them."
Fine Dining Doing Fine, but Faces Rising Costs
Fine dining is still popular irrespective of the economic conditions, David Barnes, managing directors of public relations firm DBPR, told CNBC.com.
And with pricy ingredients such as foie gras, lobster, scallops and caviar on many menus, chefs appeared to be pulling out all the stops to impress. Menus reflecting the hard times by including cheaper meat cuts and offal were sparser.
But the trend could change as inflation above 2 percent is leading to higher food and energy prices, and chefs will have to find more innovative ways of drawing the customer in without raising the menu prices too much, as consumers continue to look for meal deals.
"The spend on food is unreal. The ingredient prices have gone through the roof," James Sommerin, chef and owner of fine dining Welsh restaurants The Crown at Whitbrook and Celtic Manor, said. "It's wrong to keep hiking your prices up because inevitably you'll lose customers."
The majority of chefs at Taste stressed to CNBC.com the focus is now on offering incredible quality at great value, but said their restaurants were not facing difficulties personally.
"It's that whole value-for-money thing people are looking for now," Sommerin said.
Even high-end supermarket Waitrose, the new Taste sponsor, acknowledged consumers' calls for own-store brands of high quality at affordable prices, Bianca Nice, food consultant at Waitrose said.
As a result, many chefs said they were becoming more practical by sourcing local and seasonal produce and cutting down on wastage. One restaurant manager, Shane Safi from Cinnamon Kitchen, said they were training staff to multitask in an effort to cut costs.
"We try to keep our supplements to a minimal," Le Pont de la Tour chef Lee Bennett told CNBC.com.
Corporate Cash Cows Not There for Steak
Cost-cutting looks to be essential for the survival of restaurants as their cash cow of corporate-event spending has dried up during the slowdown as companies cut back on expense accounts.
Safi noted that during the January period, Cinnamon Kitchen had a few cancellations of "major functions," and the corporate budgets have been lowered during the slowdown.
Event spending has dropped 15 to 20 percent at high-end restaurant chain Conran in London, Des Gunewardena, CEO of D&D London, the group that owns Conran Restaurants, told the Financial Times.
Cinnamon Kitchen is the new sister restaurant to the better known Cinnamon Club and "opened in the middle of the recession (in November), in the middle of the City," according to owner and executive chef Vivek Singh.
Both Singh and Safi assured CNBC.com that it was well planned, although they didn't then fathom enduring a recession.
Quoting a food critic, Singh told CNBC: "These are bad times for bad restaurants and better times for good restaurants."
Restaurant Closures on the Rise
More than 100 UK restaurants went out of business in January 2009, the Independent newspaper reported.
When Comfort Food Bistro in Newcastle closed October last year, the sign on the door read: "With effect, from October 4, the Comfort Food Company will be closed. Blame the banks."
When TV chef Antony Worrall Thompson's company AWT went into administration and had to cut many jobs, he blamed the banks for the failure to support his business, according to the Independent.
Suppliers have also been hit and promotional activities abound London's restaurants in a drive to draw in customers.
The number of eateries in the City offering deals through reservation Web site Toptable is 20 percent higher than a year earlier, Chris Wood, MD of Toptable.co.uk, said.
Warmer weather, improving consumer sentiment and economic data have contributed to a recent rise in restaurant activity, chefs noted.
"Let's hope that we pull ourselves out of this recession sooner rather than later," Sommerin said.
Gary Wale, consultant at Change Recruitment, also said the hiring in the hospitality sector has increased since April. "It was quite tough at the beginning of the year, but steadily things are getting better," he said.
"There have been some phenomenal (restaurant) openings this year," Singh told CNBC.com. Singh plans to start looking for a new restaurant site at the beginning of next year and hopes to open it by the end 2010.