28 June 2018 Issue 23: Jun/Jul 2018

How London’s restaurants are surviving

Amidst doom and gloom in the restaurant sector – chains closing down all over the country, business rates and rents rising apace – a handful of young London businesses are thriving by putting staff first.

The past few years haven’t quite played out as Monika Linton expected. The UK’s vote to leave the EU put Brindisa, the London-based Spanish restaurant and import group she’s been building for 30 years, in jeopardy. 

‘I felt absolutely sick to my stomach,’ she says of the moment she heard the news on the morning of 24 June 2016. Over the following months, she looked on as the price of goods went up and anxious staff started to leave. 

Two years on, the rest of the UK’s affordable restaurant scene has also felt the bite. Rising rents and business rates are compounding the pressure of Brexit on restaurants’ margins. The majority of ingredients sourced from the EU have become more expensive while over 90% of restaurant owners say European staff – who make up a third of all hospitality workers in London – are becoming harder to recruit. In April, the national minimum wage also rose 4.7% to £7.83 an hour for over 25s, placing yet more strain on a restaurant’s bottom line. 

And yet pockets of London’s restaurant scene are thriving. The city is one of the most inventive food destinations in the world, with dozens of new openings each week and an ever-growing appetite for casual dining. In 2017, Londoners spent 10% more on eating out than the year before, according to a Barclaycard annual survey of consumer spending.

Plenty of plucky pizzaiolos and burger flippers continue to play the risky restaurant roll-out game, venturing beyond one, two and three sites with dreams of creating a small dining empire, undaunted by regular news of industry veterans like Carluccio’s, Jamie’s Italian, Byron and Prezzo been closing down sites. 

Some of the UK’s young businesses seem convinced they can escape such a fate by playing by a different rule book – one which dictates that members of staff are just as important as customers. 

Shamil Thakrar, co-founder of Dishoom, likes to compare running a Friday night shift in one of his restaurants to commanding an army troop. ‘Running a shift isn’t easy. If you’re, say, 26-years-old and managing a team of people, you’ll learn a lot more than you would from a desk job.’ 

Since 2015 the Indian restaurant, now with six sites, has been running ‘Babu masterclasses’ for junior members of staff wanting to step up into front-of-house management roles. This year there are 50 spaces. All of Dishoom’s current managers, with just one exception, have been internal promotions. Dishoom also runs the ‘Kitchen Academy’, a training programme for chefs. 

Thakrar says recognising the importance of Dishoom’s 770-strong team was a ‘pivotal’ moment for the business. The motivation behind the people-focused approach – which includes annual parties, trips to Bombay and above-average pay – is two-fold. ‘Number one,’ he explains, ‘it’s just the right thing to do. We should develop people under our care.’ 

In the current state of uncertainty around EU workers’ rights, for example, Dishoom has been running workshops with a specialist to help staff apply for visas and answer specific legal questions. 

There’s also an element of self-interest at play, says Thakrar, because ‘creating a pipeline of talent that comes up [the ranks] is much better for us. We have managers who understand our culture and heritage, and it saves us recruitment costs.’ 

Angling for staff  

Dishoom isn’t the only restaurant with an employee-centric approach. ‘Turnover in this sector is super high,’ says Natalie Chassay, co-founder of hospitality recruitment app Placed. ‘It’s not a well-paying industry, so people will move jobs for an extra pound. It’s competitive. 

‘As a result, people are focusing on having a smart, strong company culture, with an awesome environment and perks.’ 

It’s something Brindisa has valued for years. The company offers staff English and Spanish lessons, trips to Spain, flexible hours and a non-hierarchical structure. ‘We want to retain people in the business who see this as a career and not just a holiday job. People who really want to know about food and wine,’ she says. 

Not all established restaurants have been so forward-thinking. ‘It’s much easier for small businesses growing fast to decide what they want their company culture to be, and how they’re going to execute that,’ says Chassay, adding that it’s these staff-focused companies who also attract most people through her recruitment app. ‘Those are the ones that are going to do really well.’

Model: ordered chaos

Since starting out in 2010, burger restaurant Patty and Bun has tried hard to maintain its ‘dysfunctional functional’ atmosphere. ‘We try not to take ourselves too seriously,’ says founder Joe Grossman. ‘We pay as well as we can, we do loads of company initiatives – brewery tours, checking out farms together, big company-wide parties, general manager nights out. It’s just fun.

‘It’s very much like a family environment, the way we run the company. Hopefully customers can feel that. After all, happy team, happy customer.’ Patty and Bun who now employs near to 200 staff across 10 permanent sites. Grossman says he hasn’t been to the head office for three months; rather, the seven-person management team is ‘out and about, and accessible, all the time’. 

If Dishoom’s special focus is imparting skills to its staff and Patty and Bun’s is making work fun, six-year-old Pizza Pilgrims’s is letting employees improve how the business runs. ‘My number one thing is involvement,’ says Elliot, who encourages all 240 of his staff to ‘have an opinion’. ‘We really want [employees] to be telling us how we can do better.’ 

His favourite example of this policy in action involves, of course, cheese. A kitchen porter called Luca suggested changing the way the chefs cut the mozzarella to speed up the process and, after some testing, it was rolled out across the business. ‘We still call it “Luca’s method”,’ says Elliot. Luca went home with a bonus, and the chefs’ lives got easier. 

Recently, Pizza Pilgrims turned food development itself into an event. In March the company invited food bloggers along to a Masterchef-style session at which its head chefs were presented with a box of ingredients and asked to create the best new recipe for an off-menu special. 

‘The most important thing, for people working anywhere, is to feel like you’re making a difference,’ says Elliot. ‘Being acknowledged for what you do, and having a feeling of ownership, is valued far more than any bike to work scheme.’

Initially, Elliot says, he gave staff a little too much ownership – ‘most people get intimidated by a blank canvas, rather than making the most of it’ – and has since set a clear structure within which managers have a fair amount of freedom to run their site as they think best. Giving staff this sense of ownership, he believes, is entirely scalable (he points to retailer Timpson as a business which gives a huge amount of responsibility to managers and staff in each of its 1,200 stores) and essential to the culture of the business as it grows. 

Up the chain 

In July, Pizza Pilgrims will open another branch in London Bridge, down the road from Patty and Bun’s new restaurant in Borough (which opened hot on the heels of its ninth site, opened in Brighton this February). Yet Grossman is adamant that his business won’t succumb to the blandness that becomes the norm at big chain restaurants. 

‘From the outset we always looked to open a handful of gems, each with their own personality,’ says Grossman. ‘The cookie cutter approach has never appealed to me. We’re not a chain; we’re a
big independent. When a great opportunity comes, we go for it. It’s not about X number per year; it’s what works for the brand and what fits.’ 

Both Thakrar and Elliot echo this sentiment. ‘We’re not in the situation where we’ve got loads of private equity money and have to open 10 sites a year because that’s what we told [investors] we’d do,’ says Elliot, who has, however, recently hired an operations director with experience at 26-site Mexican restaurant Wahaca. 

‘We’re looking at some sites in London,’ he admits, ‘but we are conscious that there are a lot of headwinds at the moment and we have grown quite fast.’

Dishoom, meanwhile, is rumoured to be opening a seventh site in Manchester. Thakrar wouldn’t confirm the news, but said: ‘Dishoom is a labour of love. We’ll open gradually as we find great places.’

Grossman, though, says there’s a danger in being too hesitant. ‘There’s been such a growth of independents over the last few years, and they’re great, so that drives quality and competition. It’s a market where you can’t be complacent.’