The annual guide, now in its 28th year, reports that 117 independent restaurants closed in the capital over the past 12 months, the highest figure since the guide’s first publication in 1991. The previous high was 113 closures, in 2003.
However, the number of restaurants continues to grow in the capital, with the guide stating that 167 restaurants opened during the same time frame, a net increase of 50. Indeed, the past 12 months recorded the fourth highest year of restaurant growth - the record, according to the guide, was 200 openings two years ago, with a net openings figure of 123.
The figures mark the end of a five-year peak of net openings in the capital, which had stood at more than 100 per year since 2015.
The increase in closures is being attributed to what the guide’s co-founder Peter Harden describes as ‘unprecedented’ competition. “The level of competition within the London restaurant market is unprecedented and is creating business conditions even more challenging that elsewhere in the UK,” he says.
“In 2003, the previous peak for closures, it was different: the hit to the market came from a slump in demand due to the second Gulf War, SARS, and the lowest hotel occupancy rates of recent decades. This time, the problem is purely and simply a case of over-supply: too many restaurants chasing a level of demand that although it continues to rise is doing so only slowly.”
A further sign of pressure in the independent market comes from the ratio of openings to closings, which dropped sharply to 1.4:1. Only one previous year has exceeded this rate: 2003 when, at 1.2:1, it was a time when for nearly every restaurant that opened another one closed, says Harden’s.
Harden’s restaurant data was compiled for the 2019 edition of the guide and is based only on independent restaurants with three or fewer sites - chains with more than three branches are excluded from the statistics.