‘A couple of bad decisions is all it takes for a restaurant to fail’
Despite recent closures, the restaurant sector is booming. More outlets mean more closures
A closure notice stuck to the window of a Jamie’s Italian restaurant in central London. All but three of the British celebrity chef Jamie Oliver’s 25 UK restaurants are shutting down after the business called in administrators. Photograph: Facundo Arrizabalaga/EPA
Rumours of the demise of the Dublin restaurant scene may have been exaggerated. As the arias over the closure of restaurant Luna reached their emotional peak with a cast of villains from VAT collectors to planners to fickle diners The Irish Times published a first look” at The Old Post Office.
It’s a Chinese restaurant in Blackrock in south Dublin with a €1.6million fit-out. One door closes. Another set of double doors is thrown open, with a €120 tasting menu.
“There’s going to be a crash, in Dublin in particular, in the next year,” Michelin starred chef and restaurateur Derry Clarke warned. Not last week, but more than five years ago at a hospitality awards event. The reverse happened, as Ireland’s restaurant scene had a growth spurt.
In 2007, there were 2,400 wine retailer on-licences issued and 42 special restaurant licences. The number dropped steadily each year after that
Fears of an overheated restaurant sector are real and sensible. Bubble anxiety pops up with every high-profile closure, such as when Joe Macken closed down his Jo’burger empire at the height of Christmas party season in December. Throw in the news of Jamie Oliver’s UK restaurant chain going into administration and you might be forgiven for thinking it’s the end of restaurants as we know it.
But it’s not. The Jamie Oliver news broke as I was finishing a tally of the new places to be reviewed in the coming weeks. It came to almost a dozen restaurants, most of them in Dublin. Restaurants are closing. But for the moment there are many more openings than there are shutters being pulled down.
The back of an envelope list is one thing but there’s an eery symmetry to the official figures measuring the health of the restaurant scene in the post crash decade. Restaurant bubbles don’t burst in isolation.
They are part of the overall economy. The graph of restaurant excise licences from the Revenue Commissioners forms a neat V when you track the fall and rise of the typical restaurant licence, the wine retailer on licence, over a tumultuous decade.
In 2007, there were 2,400 wine retailer on-licences issued and 42 special restaurant licences. The number dropped steadily each year after that. The worst fall was between 2009 and 2010 when there was a drop of almost 400 or nearly eight a week. Then the figures start to climb again. In 2017, there were 2,388 wine retailer on licences and 39 special restaurant licence holders.
We were back almost precisely where we were at the height of the Tiger. When last year’s figures are released in September we will probably have climbed above that level. We are in a boomier boom.
The fact is when you have more restaurants you will have more closures. But many restaurateurs believe trading conditions are trickier now than in 2007. “There’s a constant need for new and different,” one restaurateur said last week. “The big themed restaurants like Luna they’re not nimble, the falls are greater. It feels almost like the experience needs to constantly change. Margins are so tight a couple of bad decisions is all it takes for a business to fail.”
The leaner beast is the restaurant with lower rent and smaller staffs. “You get the social media crowd piling in on them quite quickly so they’re not sitting there waiting for a review in The Irish Times.” Then like a flock of starlings the crowd goes elsewhere. “Some days it feels like this constant kind of pop-up scenario.”
“Luna came as a shocker to everybody,” Vanessa Murphy co-owner of Las Tapas de Lola said. “Luna was a beautiful product in the basement of a carpark,” she said, “with great staff and great service. They were awarded best customer service in Dublin two nights earlier.”
She doesn’t believe that the problem is a planning one, with local authorities allowing too many restaurants. “It’s the licensing laws. You can’t have a glass of wine in a cafe.” The special restaurant licence was introduced to protect pubs,” Murphy says. “But all the pubs are doing food now.” Licences have failed to move with the times. The typical wine licence is issued to restaurants under the Refreshment Houses Act which dates from 1860.
There are other serious costs today. “After six years in business our insurance has trebled, and that’s without a single claim, our rates have doubled, the minimum wage has increased and the utilities are through the roof. Then the VAT goes up,” Murphy said.
Suppliers will often look for cash payments when they worry about the long-term viability of a restaurant
Luna, named after restaurateur John Farrell’s daughter, was the epitome of a concept restaurant, the concept being Carbone, a Greenwich Village restaurant in New York. Chef Mario Carbone mined the feel of 1950s Italian America, a Goodfellas place for living it large in a posh red sauce restaurant where the veteran servers are called captains and the eye watering bill is part of the experience. Carbone waiters wear Zac Posen burgundy tuxedos and bow ties. Luna had theirs tailored by Louis Copeland.
“The difference is Carbone is open six days a week and for lunch, and they make much of their money on cocktails” one industry observer said. “So they took two thirds of a story of a New York restaurant, but not the profitable third.” In part Luna was hamstrung by the licencing laws. Under a special restaurant licence drinks have to be served in a waiting area “where the customer has ordered a substantial meal”. Drinks must be added to the bill for dinner and can only be served “within thirty minutes following the end of a meal.”
So the big night out was harder to put together in a Dublin basement than it would be in a New York neighbourhood. “You’re all dressed up for Luna,” as one restaurant watcher put it, “and where do you go then, the Hairy Lemon?” Luna owner John Farrell’s other businesses 777, Dillingers and The Butcher Grill remain open. The wet sales or cocktail trade is especially strong in 777.
The Restaurant Association of Ireland warned of job losses from the increase in VAT in January but Luna staff will have their pick of employment, both front of house and kitchen staff as restaurateurs face chronic staff shortages. Suppliers will often look for cash payments when they worry about the long-term viability of a restaurant. They are the big losers in any closures these days.
The closure of Jamie Oliver’s empire came as little surprise after a year when the business lost £20 million (€22 million) and closed a dozen of its outlets. Bedevilled by relentless growth model that afflicts any successful idea the concept had grown bloated and stale. “It was built at a different time and based on something simple, the idea of Italian food served well. But it wasn’t executed well and bad Italian food is bad Italian food,” one Irish restaurant observer said.
Last year, restaurant critic Marina O’Loughlin took aim at Britain’s favourite chef, describing her tagliatelle with truffles in a Jamie’s Italian in Westfield as “appalling, a honking, salty swamp of a sauce, brown and dusty with nutmeg. Tiny chunks, not shavings, of tasteless black truffle lurk around, like mouse poos in soup.”
Jamie’s Italian in Dundrum remains open, unaffected by the administration of the mothership as it’s operated under franchise by business man Gerry Fitzpatrick.
An email to the restaurant to enquire about its status still comes with all the “Jamie” and is signed off “Big Love, Jamie’s Italian Team.” The big love is over, but Dublin’s restaurants live to fight another day.