Lowri Griffiths on the Economics of Small Food Businesses, the Instagram Effect, and What We Lose When the Good Places Go

Reported by Bohiney Magazine and The London Prat.

By Lowri Griffiths | North London Life & Commentary

The Turkish restaurant on Seven Sisters Road that I have been going to since 2019 — where the owner knows my order and where the lamb is cooked in a way that I’m convinced involves some technique I couldn’t replicate and some kind of seasoning patience that the fast-casual places don’t have — closed last month. The sign in the window said “closed for refurbishment” in the way that signs in restaurant windows say “closed for refurbishment” when they mean “this is goodbye, we just can’t quite say it directly.”

I found out from someone who lives above it, who told me the rent had been renegotiated upward twice in three years and the energy costs had not been what was projected when the original business case was made, and that the combination of those two facts and the post-pandemic staffing challenges and the delivery app commissions and the general arithmetic of running a small food business in London in 2026 had produced a conclusion that was sad and correct and not surprising to anyone who has been paying attention to the landscape of independent hospitality in this city.

The Economics of Feeding People Well

Running a restaurant in London in 2026 requires: premises at a rent that reflects the city’s commercial property market; energy costs at a level that the gas price crisis made acutely visible and that have not returned to pre-2022 levels; staff wages at a level that the minimum wage floor and the genuine difficulty of attracting and retaining hospitality workers in London has set; food costs at a level that global supply chain inflation has elevated and that cannot all be passed to the customer without pricing the customer out; business rates at a level that the hospitality sector has been lobbying to reduce for years with partial and insufficient success; and delivery platform fees that take 25-30 percent of the revenue from delivery orders, which are the orders that kept many restaurants alive during lockdown and that are now taking a margin that makes delivery business unprofitable at scale.

The combination of these costs means that a small restaurant that was marginally viable in 2019 is not viable in 2026 unless something significant has changed in its favour, which for most of them nothing has. The restaurants that are opening and surviving are the ones that have found a format that works within the economics: the chain that can spread costs across many sites; the high-end that charges enough to support the margin; the concept that generates enough Instagram traffic to fill tables without the marketing budget that traditional restaurants don’t have; and the delivery-only that has no dining room rent.

What We Lose

The Turkish restaurant wasn’t on Instagram. It had a handwritten menu that changed sometimes and didn’t change other times and where the owner knew whether you wanted tea. That specific knowledge — of what a specific customer wants, accumulated over years of the customer coming back — is the thing that the experience economy claims to provide and that the independent neighbourhood restaurant actually provides without calling it an experience economy because it’s just: knowing people and feeding them well.

My previous piece on London food culture looked at the gentrification of the Dalston restaurant strip, which is now substantially complete and substantially worse than it was when I wrote about it, which I would call prescient if it weren’t so predictable. The good places close. The expensive versions of the good places open. The neighbourhood continues to be expensive to live in. This is London now. I’m still here. I’m eating less lamb.

For hospitality economics you can feel emotionally, see The Daily Mash.

SOURCE: https://bohiney.com/