The Lesson From The Failure of Great Chefs.

In the past two years a steady stream of wonderful restaurants have announced they are closing up shop. With the heady popularity of food programs and media, the rise in the quality of food and wine consumed and the increasing exposure to and education about good food and what it takes to create it reaching across social strata, it surprises many why this is happening.

Some commentators put it down to the ‘democratisation of good food’ and a belief that consumers don’t want to pay high prices for good food anymore.

I see something very different.

Restaurants – like any business – have growing cost bases and investors that are looking for increasing returns. Many of the top restaurants reacted to the growing strength of the café and brasserie or casual dining boom. Many made the menu, the environment and the prices more casual. While on the surface this may have seemed like a good idea at the time it ruined them.

With education and an appreciation for good food comes a more intelligent rationalization of ‘value for money’. It doesn’t mean people don’t want to pay high prices. It means that when they do, they expect something that wows them – that meets their re-defined value for money criteria. Serving up good food, good service and a good experience at a high price is not meeting expectations.

There can be two reactions to this. The simplest one is to adjust prices downwards and realign the cost base accordingly. The problem with that strategy is that you end up competing with the rapidly improving sea of brasserie and café options available, on their turf.

The harder option is to lift your game, innovate and lead. There are very few in this country that have followed that path and as a consequence most of the great dining experiences have gone. Consumers want wonderful dining experiences and will pay for them. But where are they now? Please point out the ‘event dining experiences’ beyond the obvious handful that still remain because I am not alone in lamenting their demise.

This is the great lesson for retail.

Do not go down the path of ‘democratising’ your business unless you are absolutely sure that you have the power and tenacity to be the last man standing. You will increasingly play into the hands of online retail and price/volume power brands that will outgun you a million times over.

Choose your territory and make it wonderful for your customer. Integrity. Innovation. Engagement. Passion. Uniqueness. Inspiration. These aren’t just words. They go to the heart of specialty retail and what it will increasingly take to convince the customer to pay more than the commoditized price that competitive forces are conspiring to deliver. Learn from the demise of many of the great chefs. The path is harder but the rewards are greater.