While London continues to lead the way when it comes to planning applications for new food and drink outlets, the premises are shrinking in size.
Planning activity for new food and beverage outlets in the capital continues to outstrip the rest of the UK, as London’s resilience to the dining crunch again proves that those in the capital are a hungry bunch.
Some 23% of all planning applications for new restaurant and bar space over the past decade has been lodged in London – 7m sq ft of space, according to Radius Data Exchange figures – with half coming in single-unit eateries.
Applications for restaurants and bars increased by 43% year-on-year, compared with 37% in the rest of the country.
However, the sector has not been immune to the slowdown as developers become more cautious – expansions appears to be decreasing.
Data shows that planning activity is down by 24% from H1 to H2 2017, and down by a further 18% in the first six months of this year.
In addition, it’s not just the planning sector that has displayed this hesitation in churn. The variance between the capital and the regions on the occupational front in terms of restaurant and bar take-up is clear.
The London boroughs also tell different stories.
Lewisham, Hammersmith and Islington all appear in the top 10 locations in terms of planning applications for new restaurant space over the last decade, with Westminster coming top. All four have seen an increase in the number of 18-35 year olds living within their boundaries.
This reflects the amount of disposable income that millennials have to spend on eating out.
Looking at the average transaction size for a single restaurant/bar unit against planning activity, it can be seen that the average unit size of a new planned eatery has shrunk considerably, to a quarter of what it was five years ago. So planners are changing tack to reflect change in occupier demand for smaller units.
London itself remains resilient – the figures speak for themselves. The capital’s 24-hour economy, plus a population catchment and influx of tourist footfall, means there is always a steady stream of hungry customers ready to spend.
We can expect more restaurants and bars to close this year, but new and innovative concepts will emerge. At the end of the day, everyone needs to eat.
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