Restaurants hungry to grow in Glasgow buck high street gloom
EATERIES in Glasgow with smaller footprints and growth ambitions than their larger rivals appear to be bucking the gloom on the high street, according to new research.
International real estate advisor Savills said independent eateries accounted for nearly 70 per cent of new occupiers in the city’s food and beverage market last year.
Eleven new independents opened for business in 2019, including Bo & Birdy, the new 146-cover brasserie at Blythswood Square, and Mezcal, a new Mexican taqueria and bar on Hope Street. Other new openings include Sugo, the new pasta restaurant on Mitchell Street and sister to Glasgow pizzeria, Paesano.
“Independents have been more cautious around how quickly they grow, compared with some of the larger chains,” said John Menzies, retail team director at Savills in Glasgow. “For many independents, they have been priced out of premium rental locations and instead opted for quirky locations which are lower in rent, but still close enough to the centre to attract customers. As a result, many of these businesses have demonstrated positive turnover growth, which has in turn encouraged more independent businesses to open.”
A crunch in the casual dining sector claimed more than 1,400 UK restaurants last year, according to research in September 2019 from accountancy firm UHY Hacker Young, with a spate of restaurant closures at brands including Byron, Strada, Gourmet Burger Kitchen, and Jamie Oliver’s restaurant chain.
The firm said the rapid growth of the casual-dining sector since the 2008 financial crisis had resulted in an oversaturated mid-market, which was still going through a dramatic shakeout.
Hundreds of small independent restaurants had also closed their doors.
In Glasgow, Savills said it was still seeing demand from national operators. Openings in 2019 included The Ivy, Nandos, German Donner Kebab, Benihana, Kokoro, and Project Pizza.
“We expect to see another busy year for the casual dining sector leasing market in 2020, but the focus of demand is continuing to evolve in terms of property type, size, and location,” Menzies added.
“A number of interesting national brands are expected to open in 2020, including Franco Manca, Mowgli, Pho, and Wolf.
“With margins tightening in the face of rising operating costs, savvy occupiers are now looking for smaller units of 1,500-3,000 square feet, often in quirky locations and in buildings with architectural character.”
Whilst overall volume of space leased in Glasgow’s food and beverage market – 65,000 sq ft – is down 15% from last year, Savills found the proportion leased to local independent operators increased by a quarter, rising from 32,000 sq ft in 2018 to around 40,000 sq ft in 2019. Savills said its findings continued the trend from 2018, when 63% of new occupiers in food and beverage were independents.
The pub sector sector is also expected to grow in 2020, having traditionally grown at a slower pace compared with the restaurant market, Savills added.
For example, one of UK’S largest pub businesses, Mitchells & Butlers is actively looking for sites in Scotland.
“Over the last five years, the pub sector has not seen the same growth as restaurants, so with arguably less saturation in the sector, there is room for growth,” Menzies said.
Separate research from accountancy firm PWC last September found that 1,234 chain stores on Britain’s top 500 high streets had closed in the first half of 2019, 54 of them in Scotland.
This equated to an average of 16 store closures a day, with restructurings and migration to online shopping blamed for the shift.
The closures included 153 restaurants, 112 food-to-go outlets and 167 pubs and bars.
However, PWC also noted that store openings were slightly ahead on the previous year at 1,634 – compared to 1,569 in the first half of 2018 – potentially indicating some renewed optimism among high street operators.