I regularly chat with a local manager of a wine bar about business. Last night’s chat was interesting and so I thought I would share with you.
This person I know, called John has been running a small wine bar for about 7 years now. They do do some food but rely mainly on beverages that are of good quality.
I asked whether he thought people were starting to feel the pressure of money and cutting back mainly from this year.
John replied yes. He was seeing evidence of people tightening their belts. Their food sales were down 34% in the last 3 months despite the fact that they had not changed the price on their menu for 2 years. In the last year their energy bill was up by £600 a month and food supplies had increased massively. He mentioned Mozzarella cheese has risen by 70% and flour by 50%. With the cost of wages going up he said food for them was not profitable but helped bring in a few more customers. Despite this, he did notice people were still going out, buying less food but spending more on drink instead. In fact, beverages were up by double on average over the last two years. In the last month though the business was down by £6k in sales which he put down to better weather as while more people do go out in sunny weather they tend to go to places that have a bigger outdoor area and their out door space only sits 30 customers. They do better when it rains.
We noticed that the local Loungers (LON:LGRS) was empty at 10pm. This loungers only opened 2 months ago. It is not unusual for our local town to be quiet on a Friday night though, especially at end of a month and when there was several festivals of music on close by.
Regarding Loungers (LON:LGRS) he told me about a chat he had with an Area manager of J D Wetherspoon (LON:JDW. Spoons has been closing stores in areas where Loungers (LON:LGRS) have opened up close by. This is because of they are taking their business. While loungers are similar to J D Wetherspoon (LON:JDW) they are a little more expensive but offer better quality beverages, which targets the more middle class…
Interesting .
I live on the East London/Essex border and we are lucky to have a very good Indian restaurant ( doesnt everyone) nearby. We dont go that often because you have to book 2-3 weeks in advance to get a table and we are not that organised. We went 2 Saturdays ago and for the first time ever it was not full ! I know the owner fairly well and he told me he was very worried, he had similar concerns to your wine bar owner, food inflation, he mentioned the ridiculous increase in the cost of onions, utility bills and a drop in demand.
Also I had a few days walking in the Lake District last week and stayed in Keswick which was definitely not as busy as I thought it would be, but that is only my perception.
We live in very interesting times. Tough times for people on or switching to variable rate mortgages but surely the opposite is true for pensioners on an April 10% state pension increase and 3-4% interest on their savings.
R
