The rhythm of the restaurant business, and when it costs to cancel a reservation.
This week’s column was to have been a review of dinner, plus fascinating wines of course, at The Clove Club in what used to be the Shoreditch Town Hall, east London.
But it will have to wait thanks to Jancis’s hacking cough which forced us to cancel. When I emailed its Scottish chef and proprietor, Isaac McHale (pictured above by Anton Rodriguez in the middle of The Clove Club’s open kitchen), his response was immediate, ‘Sorry to hear about Jancis, I have the same.’ Which got me thinking about cancellations in general.
I remember as a restaurateur driving myself barmy when trying to unravel the conundrum of why people cancelled their reservations; why customers did not flock to my restaurant on certain days of the week; why there could be a temporary lull in bookings followed by a spurt.
There were numerous possible causes. Mondays and Tuesdays were quieter than the rest of the week. There was the influence of payday, usually towards the end of the month. There were school holidays, which at least could be planned for, even if they did stray into early September (the curse of the private schools). There was the lull after closing for a bank holiday. And then of course there were transport strikes, which destroyed business and was something nobody could do anything about. And that was all without a quiet January, February and March – enlivened only by a Burns Night and Valentine’s Day when we would try not to lose all the profits we had made during the previous December.
In a way, COVID-induced closures helped. It forced restaurateurs to look more closely at their business. Many have realised that opening on Monday, and even on Tuesday, in certain areas is not profitable. But Sundays can be particularly successful if the restaurant offers a traditional Sunday lunch. Even if not, opening on Sunday generates the opportunity to attract families and friends who may not be all available on the Monday or the Tuesday. Focusing on your profitable shifts obviously makes more commercial sense. One American restaurateur recently told me that his restaurant group had been more profitable in 2023 than 2022 despite the fact that it had been operating with three fewer restaurants than in 2022.
It is transport strikes that cripple the restaurant business, particularly any threat of a tube strike for those in central London. It is not just that they limit customers’ access to the restaurant but they force people onto the roads, which get clogged up swiftly. And the tube, metro, subway – whatever it is called in any major city – tends to be how the vast majority of any restaurant’s staff get to and from work. Restaurants whose entire staff commute by bicycle are extremely rare.
Even the threat of a tube strike can harm business by putting customers off. That was the case this week in central London where the proposed strike was called off as late as Sunday afternoon, too late for one restaurant’s bookings where I observed, admittedly on an icy Sunday evening, a draw between the number of customers and the number of staff. Eleven customers, five waiting staff and six in the kitchen!
If business has been slow this week, that is also a consequence of the pandemic. As one London restaurateur commented, ‘One customer told me that at the end of last week, with the strike still in the balance, he had told all his staff to work from home for the week as he was about to do.’ This is an unforeseen consequence of the threat of a tube strike and is made possible today by the speed of communications and the obvious alternative to coming into the office to work, two major social changes that have taken place over the past 35 years.
There have been others as well. With credit cards becoming the predominant method of payment, the timing of payday is less important. I can still recall a presentation from our American Express representative whose knowledge of our business, gleaned through his control of the card that represented over 50% of our annual takings, was little short of breathtaking. And quite worrying, too.
The concern over an absence of bookings after a public holiday seems to have vanished, too, thanks to the rise in the number of overseas visitors to London and the rise in the reputation of London restaurants around the world. The number of young, seemingly well-off Asian customers in London restaurants, particularly early evening, is a phenomenon quite new to me. And it would be even more welcome to London’s restaurateurs today if they took a more active interest in the wine list.
Another change is the undoing of a rather precise explanation given to me by the late Elena Salvoni, who began working as a waitress at Cafe Bleu in Soho in the 1940s and finished as the proprietor of Elena’s L’Etoile in Charlotte Street in 2012. One day during the 1980s she said to me, ‘One thing that will never change is that whenever the weather goes from hot to cool or vice versa, then for 24 hours our customers’ habits change.’ That no longer appears to be the case, perhaps because of the ubiquity of central heating and spread of air conditioning – even in the UK!
With so many of these concerns no longer applicable, what would I find to worry about today? There are far more keenly interested customers potentially but there are also far more restaurants and far more opportunities for these customers to spend their hard-earned cash. Perhaps the last word should go to Isaac McHale. From his sickbed, he wrote, obviously with a clear head, ‘We are always slightly quieter in January. Everyone is, I think. And people spend less.
‘But what deters our customers, I think, is more that there is such an overwhelming noise of different options for people to dine out or in or whatever. That just being visible and reminding people that you are here is the most important thing, rather than weather or trains.
‘I always maintain that if you asked 100 people what the top ten restaurants in London are you would get 100 different answers. Because there is so much choice and you need to remain in the mind’s eye for people to think about coming to you.’ So, at least that would be something for me to worry about – if I were still a restaurateur.
In my day, no restaurateur would have dreamt of taking credit card details in advance. In that pre-online era, it would have been extremely time-consuming.
Many, many restaurants today, however, have a policy that involves charging a cancellation fee to the customer's credit card to ensure the booking. At The Clove Club, for instance, this is £100 per person for lunch and £125 for dinner if the cancellation is made less than 72 hours before the meal.
The legal status of restaurant bookings may still be far from clear, but the immediate financial losses to a popular restaurant are obvious. The restaurant wants you to come – that is why they opened their doors – and you, the customer, have signalled your willingness to attend by making the booking. The restaurant may well understand, and even sympathise with ill health or sudden catastrophe, but their losses are clear.
There is the food. There is the cost of the waiting staff. And there is the opportunity cost of what they would have sold you had you turned up. Such discrepancies are exemplified at The Clove Club which seats a maximum of only 42 but has an average spend per customer of £270. Their cancellation fee goes some way to obviating this loss.
Whenever a restaurant requests your credit card details on making a booking, it is always worth studying the small print and making a note of the point at which you will be charged for a cancellation or, even worse for the restaurant, a no-show.