Rising cost of trading pushes F&B brand oversees

Big Cat | Birmingham | Food & Drink | Hospitality | Marketing | PR | Retail

Thursday 12th July, 2018

CEO of popular ‘healthy fast food’ chain Leon, John Vincent has commented that the rising cost of trading on the UK high street is ‘incentivising’ the group to open more restaurants overseas and claims that the 20% VAT rate paid by restaurants for eat-in food and drink ‘unfairly penalises’ the hospitality industry.

Leon currently has over 45 branches across the UK, and is a familiar face on UK high streets, especially in London, however, following a period of slow growth for the brand, Vincent has warned that the government is ‘killing’ the high street at the same time as commissioning reviews on its future.

It is well known that Britain’s high streets have become a challenging environment for businesses. Increasingly more retailers have been hit hard by the online shopping boom, and many mid-market F&B brands have fallen victim to the popularity of delivery services such as Deliveroo as well as consumers looking to seek more unique dining experiences, leaving middle-market players out in the cold. The impact of these factors on retail and F&B brands is significant, and with successful brands such as Leon looking to expand from the UK to overseas in order to survive, our high streets could be facing another hit.

Vincent highlighted that there is a ‘significant inequality’ between business rates charged to city centre tenants and online retailers based out of town, commenting that ‘it creates an uneven playing field and penalises physical retail and restaurant businesses’. The consequence of such is that many F&B brands are already suffering with closures reported frequently, and this is set to continue with ‘the net impact being less revenue for the government, not more’.

As the F&B industry sees a ‘market shake out’ of mid-market brands due to an over-saturation in the market place and shift in consumer expectations, will the further pressure of trading costs spur another bout of departures from our high-streets? We really hope not!

Working with a number of retail and hospitality organisations, we are constantly having conversations with our clients about their micro and macro environment and the impact it is having on their businesses, working together to prevent and minimise risk and feeding this into their broader marketing communications strategy.

 

Written by Keshia Chauhan Marketing Account Manager

Thursday 12th July, 2018

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