12.09.16

Brexit – Hospitality entrepreneurs can benefit on both sides of the pond

Brexit – Hospitality entrepreneurs can benefit on both sides of the pond

Calling all oversees operators and investors!  Now is your chance to take a strong foothold in London! That’s the rallying cry that we’re hearing from a number of recent client enquiries at Mystery.

There is always an opportunity to profit from an economic downturn, you just have to position yourself and know where to look for the right opportunities… And in F&B/hospitality it's a great time for entrepreneurs and foreign investors.

With the GBP at an astonishing low against the US Dollar, the opportunity to acquire or establish a brand in London has never looked so appealing: Not only does the exchange rate mean that the cost is nearly 20% less than a year ago, but the Capital market in the UK seems to be temporarily paralysed by the Brexit aftershock, which means businesses in need of funding for expansion will need to put their plans on hold or grow out of cash flow (at a far slower pace).

In the last few weeks, Mystery has been contacted by three international restaurant operators looking to make the most of the financial advantage and seize the opportunity to develop business both in London and in the wider UK.

Their concerns are as you would expect:

“Where are the right locations to launch and grow?”

“How will the local market react to their brand?”

“Who are the right people to work with to establish and run the venture?”

An established market, Britain shares many of the cultural eating habits with Americans particularly and with the growing number of US brands thriving in the UK such as Five Guys and Shake Shack, the low ‘Pound’ means that the restaurant and hospitality sector, in London particularly, will see a boom in tourism customers over the next year.

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However, having been based in the US over last couple of years, my foreign perspective has illuminated some of the key cultural differences with the UK when it comes to eating out in the mid-market casual dining sector.

One worth mentioning is the size of Menu. The US market seems to demand huge amounts of choice and customization from their restaurants, whilst conversely, the British seem to prefer help making the their decision.

We helped turn around a struggling New York bagel concept that had launched in the UK by adapting their menu from a build-your-own offer with a dozen types of bagel; a choice of fillings; and another choice of toppings - which in New York had been the de facto format – by simplifying the offer to their 8 most popular orders. The speed of sale dramatically increased and they stopped losing customers from the back of the line, driving a similar increase in sales.

Flavour profiles are also worth considering. We have had to tweak the recipes for a UK concept that we have recently helped launch in the States.

The cultural differences are subtle, but worth taking seriously. However, judging by the number of enquiries we get at Mystery, there is still a strong appetite for American concepts here in the UK with operators considering Barbecue and Smoke House concepts in particular.

 

Mystery helped develop the Hawaiian Kua'Aina concept for the UK market, with successful sites in London and Belfast.

There is always an opportunity to profit from an economic downturn, you just have to position yourself and know where to look for the right opportunities…

In short, if you’re a foreign investor, looking for hospitality or F&B retail opportunity, the UK is the place to search!  And if you’re a start up with a great idea or an independent looking to move to the next level, make use of the Brexit fallout while you can. It’s a great time to pitch for foreign investment.

Over the last 18 years, we’ve worked with a large number of F&B operators and been fortunate enough to build solid local knowledge and a network of expert partners in menu development, hospitality recruitment, training, marketing, PR and property. We love to connect operators with investors (sometimes investing ourselves!). With that in mind it’s hardly surprising that we’re noting this increase in attention from overseas.

Be inspired - get in touch and see how we can help you.  Contact us here.