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The business of eating out

January 23, 2008

As you read this, top chefs in Britain will be nervously biting their nails: at midday today, Guide Michelin ( will publish its annual ratings for British restaurants and hotels. The French guide is considered the final arbiter for excellence in the business, and promotion or demotion on its three-star scale can spell failure or success for the top restaurants.

The guide was launched over a century ago by the French tyre manufacturer, but remained firmly rooted in its country of origin for decades. But ever since interest in gastronomy in UK and the US has grown over the last 20 years or so, Michelin has gone global. It now pronounces on restaurants as far-flung as in Tokyo and New York.

Of course there are many food guides: Zagat, the Good Food guides, and the excellent Evening Standard are only a few of them. For me, Time Out provides the most comprehensive and accurate advice on where to eat in London. But at the end of the day, Michelin, with its tiny print, arcane recommendation system, and intense secrecy, remains the Bible for those who take their food seriously.

And an increasing number of Brits do. Last year, they spent eight billion pounds on eating out, more than they did on food eaten at home. A little known fact is that desi restaurants, encompassing all cuisines from South Asia, earn around 30 pence out of each pound spent in restaurants and take-outs. This is testimony to the continuing popularity of spicy food in Britain. The most popular of desi joints are those offering balti concoctions of all sorts, ranging from meaty to vegetarian fare.But of late, Indian restaurants are breaking into haute cuisine with imaginative cooking, sophisticated presentation, expensive locations and lovely décor. In 2001, Tamarind became the first Indian restaurant to be awarded one star by Michelin, and the chef, Alfred Prasad, reported a 15 per cent increase in business.

Given this interest in gastronomy, it should be no surprise that some of the most popular TV shows and books should be related to food. Gordon Ramsay, the only British chef to currently be awarded the ultimate accolade of three stars, recently appeared on a TV programme in which he cooked with an amateur in real time. That is to say, the three courses being cooked were prepared and served within the one-hour duration of the programme “Cook along with Gordon Ramsay.” The audience was vast, and the TV event was advertised for days.

Nigella Lawson is another popular cook, and her current book, Nigella Express, is expected to sell a million copies in hardback. Bookshops have large sections on cookery and wine, and gastronomic websites are very popular. Jamie Oliver is a nationally acclaimed chef, better known for his espousal of causes like better conditions for battery chickens, and the need to improve food in schools, than he is for his cooking. A couple of years ago, he trained 15 disadvantaged youths from the inner city, and set up a restaurant called Fifteen for them to cook in. Today it is hard to get a table there.

But if there is a lot of money to be made in the business, it is easy to lose it as well. According to statistics compiled by the industry, 90 per cent of all new restaurants in London shut down within their first year. There is some mysterious factor that determines which new eatery will succeed, and which one will go belly up. Location is key; good food is essential; and the price has to be right. Despite the large sums people pay, they are conscious about getting value for money. As long as they are pleased with the food and service, they won’t mind shelling out, say, 50 pounds a head. But if they feel the dining experience wasn’t worth the bill, they won’t return.

And crucially, they won’t recommend that particular restaurant to their friends. It is this ‘buzz’ that is essential for the success of any establishment. Most restaurants flourish because of word of mouth and good reviews. Typically, if a trusted reviewer in a major daily gives a strong recommendation, it can make a restaurant, and vice versa. A famous chef once threw out a well-known reviewer for panning his restaurant. The incident was reported widely.

The popularity cult surrounding some chefs is in the category of the limelight enjoyed by major-league movie and pop stars. Their personal lives are reported on, as are their plans to move to another kitchen. Gordon Ramsay is famous for his foul language; so much so that one of his TV series was called ‘The F--- word.’

The success of a restaurant is measured by how many days or weeks it takes to get a table there. Places like The Waterside Inn, The Fat Duck, Le Gavroche or Nobu can be booked solid for months ahead. In fact, one food guide advises readers on the techniques they can try to jump the queue.

I once used to think that Michelin inspectors had the ideal job. These culinary spies remain anonymous and naturally pay for their own food. Typically, they are in their thirties, and have had ten years of experience in the trade. Michelin has 75 inspectors in Europe, 10 in North America and 5 in Asia. According to an article in the Financial Times, these inspectors are on the road three weeks out of four, sampling at least two restaurants per day. I love good food, but this kind of compulsive grazing would be hard to sustain, even for me.

Starting a new restaurant involves a major investment. If it is located in central London, the cost could easily be around 5 million pounds. And we are not talking about buying a property here, but just renting it. This is a big reason why it can cost so much to eat out. Add salaries, insurance and utilities, and you get an idea why Le Gavroche could easily present you with a bill for 300 pounds for two. Of course this would include wine, service and VAT, but London ranks among the most expensive cities in the world for eating out. Luckily, it is also rated as the best.