Not only has the recession failed to take a bite out of London's restaurants, but a combination of a weaker pound, a temporary tax cut and a surprise boost in disposable income has pushed the closure rate for the capital’s eateries to its lowest since 2000, a survey showed.
Only 64 restaurants shut their doors over the last twelve months, which is just below ‘normal’ number for the whole decade, while new openings also staged a recovery from the previous year, the survey said.
“Everyone, including us, thought that London’s restaurants were in for a bloodbath in 2009. Well, it just didn’t happen,” Peter Harden, co-publisher of the Harden’s restaurant guide, said in a press release.
Most of the restaurant-going Londoners are still in employment and many of them have had their disposable income boosted by lower mortgage payments, according to Harden.
Meanwhile, active promotion and heavy discounting by restaurants has also helped to boost revenue during the recession by luring bargain-seeking customers, Harden pointed out.
The UK government’s temporary 2.5 percent reduction in VAT could have also boosted the restaurant trade, the study said. And the relative weakness of the pound could also have helped the affordability of meals for visiting foreigners, one analyst told the Financial Times.
The report also suggests that the buying and selling of restaurants may have stalled as prospective proprietors struggle to get the funding needed to start a new venture.
The high-end players in the business are also not shying away from big projects during the recession, the report notes. The forthcoming aqua development, which will span some 17,000 square feet, is to be opened in October by Hong Kong investors on the top of the former Dickins & Jones department store.