It is said that the price of money determines everything, and there is much truth in the saying. During 2008 and early 2009, interest rates in Britain fell from 5% to 0.5%, a drop of 90%. Money became very cheap – be it debt or equity. Following the Great Financial Crisis of 2008, the world’s central banks pumped liquidity through the system – and kept pumping for the next 12 years or so. 

 

This liquidity inflated asset prices almost everywhere, because like water soaking everything when it pours with rain, cheap money got everywhere. Shares, property, bonds, art, funds, start-ups – they all went up in price thanks to the growing weight of money chasing a relatively fixed stock of items in which to invest.

 

But when demand exceeds supply, over time, the supply usually rises to meet that extra demand. And so, it came to pass with start-ups. There was more capital chasing deals, so entrepreneurs wrote more business plans and invented new projects to back. The hospitality industry was not immune to this mania. There were an extraordinary number of new food and drink ventures launched in the decade leading up to the lockdowns in 2020. And an astonishing number of them actually got funded, despite lofty (some might say lunatic) valuations. Hundreds of new concepts opened.

 

But since then, the business environment has changed dramatically for the worse. Lockdowns severely harmed the hospitality sector, even with government support. All that central bank quantative easing stimulated inflation when many industries were unable to produce normal levels of goods and services. The Ukraine war lit a bonfire under the cost of energy. Too late, the central bankers realised the problems they had unleashed and increased the cost of money faster than ever before in history, starting less than two years ago.

 

A whole generation of founders has grown up expecting easy money and crazy valuations for their ventures, but that era is dead. Markets have sobered up – the bull market is over. A different approach is now required, with more modest expectations around valuations.

 

In the last decade or so, I must have seen at least 50, and perhaps as many as 100, new restaurant, bar, club and café projects. Many of the pitches have borrowed some of the razzmatazz from Silicon Valley tech start-up decks. They are often very slick, beautifully packaged documents. I don’t know how many of these businesses have met their original projections – but I suspect very few.

 

I don’t blame any entrepreneur for trying to find the cheapest capital they can to fund their business – it’s their job. They want the least dilution so they can retain the most equity and most control. But quite a lot of advisors and founders have acquired unrealistic habits. They have been spoilt by all the cheap cash over many years and started taking it for granted, and investors for mugs.

I have seen lots of plans valuing a restaurant or hospitality idea alone, without any outlets, at millions of pounds. I have seen plenty of plans extrapolating from a single, immature site a business growing to many dozens of sites, and many tens of millions of valuation. Good luck finding punters to buy in to those sorts of dreams in this unforgiving climate. 

 

Perhaps there are still fantasy valuations to be had in the frankly bizarre crowdfunding market. That whole segment is a mad bubble, in my opinion. Almost all the valuations are ridiculous. I doubt very much any of them will make real profits for the investors. If backers are getting rewards in kind – free beer or meals etc – which somehow justify their investment, then fair enough. But I hope no-one has placed a significant portion of their savings in such overpriced, risky ventures.

 

Every serious entrepreneur puts their heart and soul into a new undertaking – but also plenty of their ego. This can often translate into the founder insisting on bringing their own idea to life rather than repurposing or reinventing an existing business. During boom times, the appetite to finance brand new ventures is almost boundless. But in tougher times – like now – it makes much more sense to fix existing operations and make the most of assets that are already standing, rather than starting from scratch.

 

I have formed this view, partly because I believe many current hospitality businesses will need to be refinanced – and probably substantially revamped. The old models are often no longer working. But this is the point in the cycle to redeploy rather than build new. Apart from anything, construction/fit out/equipment costs per square foot have probably risen 50 to 100% in the last five years. It will be dramatically cheaper to buy the right existing operation second hand and refurbish it than build a new unit from the ground up. 

 

Undoubtably consumers want new experiences rather than tired old cliché offerings, but that doesn’t mean they want expensive surroundings in a venue that cost millions of pounds to build. The same kitchen can be used to cook an infinite variety of meals. The costly infrastructure can remain from the previous business – the superficial décor and staff and menu can be transformed under a new name and theme. 

 

Entrepreneurs should embrace creative destruction – the reallocation of existing assets towards a more productive use. Our high streets and shopping centres are still cluttered with faded and barely profitable offerings. These dull old concepts will fall by the wayside and dynamic and profitable new ones will rise to take their place.

In some cases, this might be an evolution of an existing brand. In others, a total replacement with something more exciting, and better economics. Of course, we mourn the passing of the old, but we also celebrate the arrival of the new. I look forward to a period of upheaval and opportunity.

Three months have passed since I wrote about being in my family home with my dad asleep in his favourite chair overlooking the garden, a half drunk cup of tea and a Tupperware box of biscuits at his side ready for when he woke up again. 

 

I wrote: “Dad is living (not just existing, I like to think) alone, with a stream of helpers arriving at varying points during the day, who treat him with care, kindness and love. For he is a good man, a kind man. He is frustrated at not being able to walk very far, see very well, hear properly, fasten fiddly buttons or put batteries in his hearing aid with fingers that will not do as instructed. Despite these and other hindrances, he is uncomplaining and stoic. He is respected and deserves that respect.”



I sat in the same chair last week alone, looked out over the wonderful autumn colours in the garden, took in the silence and thought about the wonderful life of my dad, who had died a few days earlier. The diary with his spidery handwriting was still open on the coffee table, the photographs of mum still slipping in their frames on the mantelpiece, his walking stick still propped against the sofa.



I will miss him so much, and now with a week to go before the funeral, grief washes over me at the most surprising of times. I feel sadness deep in my bones, wearying and exhausting.

 I will miss taking him out for meals, navigating gravel paths with his wheelchair, working through menus to find something small but interesting to eat, and trying to avoid noisy places where he couldn’t hear me speak. I have lost a listening post into his world, and the understanding of why eating out just becomes impossible for the elderly and infirm.



I will miss his words of wisdom, and his approach to life that have helped guide mine. He never had an iota of self pity, despite losing his dad at 11 and not being able to go to grammar school because his family couldn’t afford the uniform. Despite his much loved sister dying of polio when she was only 23, and despite the deaths of friends when he was doing his much hated national service pre the Suez Crisis in Egypt.



He was the embodiment of “service before self”, which saw him put others first rather than himself. Well into his 80s, he was still in Rotary and standing in local shopping centres on bitterly cold November days, collecting money for British Legion charities, with local shops bringing out coffee and cake for him. He was the epitome of “keep carrying on”.



I keep trying, and not always succeeding, to remember how he encouraged and motivated me throughout my life. He would say “if a job’s worth doing, it’s worth doing well” and “never put off ‘til tomorrow what you can do today” – both phrases I use to keep me going.



I wrote in August: “He goes out on his own to break the monotony of living alone, ordering a taxi to pick him up and bring him back. He tries, he really tries. He does not want to give up or give in. My heart aches for him. Maybe tonight we will just stay in, eat our M&S braised lamb, stay calm, talk and watch Bradley Walsh. Tonight, we do not have to make life too difficult for a man who loves life and wants to live it.”



He loved life, he really did. He was cheerful until the very end, laughing with nurses, hugging those who visited, never moaning about his situation and being so pleased to see people (even if he couldn’t always remember their names). He was an inspiration to everyone. Safe journey home, dad.

From Wagamama to Wasabi and Giggling Squid to Pho, pan-Asian cuisine continues to have a significant influence on the UK food scene. With the ongoing success of the aforementioned brands, it is arguably the cuisine category that is showing the most momentum in the current market, especially if you throw in the likes of Itsu, Chopstix and Rosa’s Thai. 

The Propel Premium database of multi-site companies has now grown to include 3,025 companies, which operate 70,943 sites. An additional 46 companies, which operate 224 sites between them, were added during October 2023, and many in this cohort come under the pan-Asian category. What makes them particularly interesting is that many are homegrown and are putting their own spin on things.

Master Wei, for example, the concept from one of the co-founders of Xi’an Impression in Highbury, is to open its second eponymous site in the capital. The concept, which specialises in dishes from Xi’an City in Shan Xi province in central China, has secured the ex-Gourmet Burger Kitchen site in Tower Hill. Co-founder and head chef at Xi’an Impression, Wei Guirong, opened the debut Master Wei in Bloomsbury in March 2019. 

Similarly, Japanese restaurant and bar concept Osaka is to begin its roll out with an opening in High Wycombe, Buckinghamshire. The concept, which opened its debut site in Reading at the start of 2020, will open a second site on the former Gap unit in High Wycombe’s Eden Centre scheme. Led by Kaman Lam, the business launched its debut site on the ex-Café Rouge site in Reading’s The Oracle development. The concept says it serves dishes “inspired from the streets of Japan” such as sushi, ramen, Katsu curry and noodle soup. 

Japanese soul food restaurant Rainbo is set to open its fourth site in Leadenhall Market, London. Rainbo was founded in 2012 by husband and wife Ben and Xochi. Current owner James Palmer “ditched corporate City life” to take over at the helm. The goal is to grow Rainbo from a single food truck to London’s favourite Japanese street food business. Today, it has three permanent sites, at Boxpark Shoreditch, Hackney Bridge and Canary Wharf, as well as festival and events outlets.

One of the most competitive sub-categories in this sector at present is bubble tea. Taiwanese bubble tea brand The Alley is the latest bubble tea operator looking to expand its UK estate through franchising. Since launching in the UK in 2019 with a store in Holborn, it has opened five further London locations – in Mayfair, Camden, Hammersmith, Westfield Stratford and Westfield White City. Globally, it has more than 600 stores, and it recently joined the British Franchising Association (BFA). “Successfully establishing six stunning stores in London showcases the brand’s steady growth and overwhelming reception from UK consumers,” the company said. “As we continue to make our mark in the UK, this partnership [with the BFA] solidifies The Alley’s commitment to expanding its franchise presence within the UK market.”

Of course, it is not all homegrown growth, with concepts and investors from Asia also looking to enter the UK market as well. Paris Baguette is a South Korean multinational chain of bakery-cafés, owned by the SPC Group and headquartered in Seoul. It made its debut in the UK last year and is ramping up its franchise partner recruitment as it looks to expand in London. The business, which now has more than 4,000 stores across ten countries, operates sites in the UK at Kensington High Street and Battersea Power Station, which opened in October and November 2022 respectively. It plans to open its first UK franchise site this year and operate 20 locations across the country by 2026, ahead of more ambitious plans to reach 200 sites here by 2036.

Talking of ambitious investment, Toridoll – a global food company listed on the Tokyo Stock Exchange with circa £1bn consolidated net sales and a current market capitalisation of approximately £1.5bn – is currently leading the way. Earlier this year, it acquired Fulham Shore, the Franco Manca and The Real Greek operator, in a deal that valued that business at £93.4m. Founded in 1990 by Takaya Awata, Toridoll, which partnered with restaurant sector specialist fund Capdesia on the acquisition, aims to have more than 5,500 stores worldwide, with increasingly balanced growth across diverse group brands both in Japan and overseas. It also has investments in Marugame Udon and Shoryu Ramen, both of which continue to expand in the UK. 

Bringing new, international brands into its portfolio is an important part of Toridoll’s ambitious growth strategy to establish itself as a leading global restaurant group, providing “Kando” (in Japanese: experiences that will move customers) for consumers all over the world. It is looking to make more investments in the UK market, playing its part in making sure the influence from the east on the current restaurant sector continues to rise.