London’s food scene: from boom to bust

There’s an old joke that goes: In heaven, the engineers are German, the police are British, and the chefs are French. In hell, the German are police, the engineers are French, and the chefs are British. Overlooking the obvious issues with stereotyping an entire nation of people, it’s fair to say that not too long ago, the UK was not seen as the epicenter of culinary prowess. However, that changed in recent decades, with London being praised for its diverse, high-quality food scene, being voted as the top foodie destination in many guides. However, a confluence of factors is threatening this status, as The Guardian’s Anita Chaudhuri reports.

The signs are clear: since 2021, London nearly 25% of its Michelin-starred restaurants, with a slightly smaller percentage closing during the same time period in areas outside of the city. What’s to blame for this decline? Several issues have popped up, each adding to the pressures faced by the hospitality industry. The VAT, temporarily reduced during the pandemic, is back at 20% and “the 40% discount on business rates, also introduced during the pandemic, was fully abolished for restaurants.” It’s a 1-2 punch that has left restaurants, which are notoriously low-margin enterprises, reeling.

Labor costs, utilities, and food costs have also surged. Tom Kerridge summed up the situation: “There are five major reasons why restaurants are struggling now: food inflation, national insurance increases, minimum wage increases, utility bill increases and business rates. All of those are squeezing margins to extinction.” The storied chef says that government intervention is needed to prevent the British food scene devolving into low quality restaurants serving ultra-processed foods – an outcome that no one wants.

Despite these challenges, it’s not all doom and gloom, as starry-eyed chefs continue to open new restaurants, some of which are going gangbusters. Food blogger Andy Hayler, whose claim to fame is eating at every restaurant in the world with three Michelin stars, says there is a segment that is thriving: “If you take just one genre, Indian restaurants, recently I went to Oudh 1722 in Southwark and Trèsind, a big flashy opening in Mayfair, then there’s the Ambassador’s Clubhouse [also in central London], opened two years ago, but try getting a table in there. I know of many restaurants where it’s still very difficult to get in.”

Here in the US, rising food and utility costs are also putting a pinch on restaurants. The cost to eat out is steadily rising, from fine dining establishments to fast food restaurants. My husband and I recently went out to dinner to celebrate a friend’s birthday. We had not eaten at this restaurant in a few years, and we experienced sticker shock when we looked at the menu. The meal easily cost 40% more than it did 4 or 5 years ago. It seems difficult to imagine that this rise in prices is sustainable.