Seared scalps
You don't need me to tell you that the financial system is currently in the weeds.
There is no doubt that this constantly shifting situation, is going to hit the restaurant industry.
Gordon Ramsay Holdings' involvement in failed Icelandic bank, Kaupthing has been widely reported. But the implications on GRH of the collapse of Kaupthing are not known. Whilst in a statement the group says they've moved their corporate banking from Kaupthing to RBS (talk about frying pans and fires), there is no explicit mention of the extent GRH relies and relied on corporate loans from Kaupthing. The recent growth spurt was not paid for from the petty cash tin. Others relying on Kaupthing for their investments have not been having a good couple of weeks.
So where does it leave the restaurant and food industry? Frankly none of us know - but when there is talk of titans like Morgan Stanley collapsing, anything is possible in any other part of the economy.
I'm sure we'll see a clearing of the decks. Lots of restaurants won't be able to cope and it will be classic survival of the fittest. I fear some of the better restaurants will be hit hard, as their margins are wafer thin, whereas less deserving establishments have greater protection and are able to hang on. Then again, the big corporate groups, whether at the top or bottom end of the market are going to find life very tough, as their funding lines dry-up. There won't be much expansion going on anytime soon and considerable numbers going under.
On the home-front, I reckon the King household have it about right: there'll be a lot of mixing and matching of food lines, with some of us sneaking the odd value range in whilst no-one is looking. Unfortunately, I reckon this means that independent shops will be hit hard, but could well be a boon for farmers markets and their ilk.
It's an undeniably gloomy picture. We can do our bit by supporting those shops and restaurants we treasure. But let's be realistic. None of us are charities and however much we love somewhere, we aren't going to start chucking around our uncertain pay-cheques to ensure someone else's survival.
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