OPINION - The London Question: Are London restaurants just too expensive now?

Yahoo

08-02-2025

London can stake a convincing claim as the world's greatest city in which to dine out. Forget Paris and New York be damned. Here, there is everything at every level. A microcosm might be found on Goodge Street, a run from Tottenham Court Road into Fitzrovia. Wander down it and there's a long-standing chain (Spaghetti House, est 1955), a snack bar (Singaporean curry puff slinger Old Chang Kee, excellent), a fast-food joint (Cheat Meals) and, à la mode, a stylish French bistro named 64 Goodge Street. Soon it is to get what is now another of London's typical sights: a restaurant serving a menu few can hope to afford. Enter 3 Gorges, a new Cantonese with a 12-course, £388-a-head offering.
This is not the only menu 3 Gorges is expected to serve: there will be three other options, one at £69 a head, another at £89 a head and the third at £189 a head. But that 3 Gorges can open with the £388 figure with barely an eyelid batting — there has been almost no reportage, the Standard aside — speaks to a city that is already fatigued by restaurants fishing for billionaires.
Where else? Japanese steakhouse Aragawa, where the caviar starter is £295 and steaks hit £900. Sushi Kanesaka, £420 per person before drinks or service. House wine? £125. The Araki charges £310, ditto no drinks. At The Rubens at the Palace, rarely cited as one of London's great food hotels, the Golden Tips Tea experience — that's an upmarket afternoon tea — costs £575 for two. Last year it was £500. Dine at Claude Bosi's Bibendum and a roast chicken course can be added to the £225 menu as a £125 supplement. Go to Otto's — which, fair's fair, absolutely markets itself on this sort of thing — and there is a £300 burger. Meanwhile, old hands like The River Café offer starters in the mid £30s, and mains all cheerfully approaching £70. And, darling, isn't it just divine?
Ultra-expensive restaurants for the ultra-wealthy are nothing new. They will continue to come and go, often the same operators with a new name. But what about the rest of us, how are we faring? Not especially well. There is an ever-growing glut of restaurants that market themselves as something for the middle-income Londoner, but where a meal for two with a bottle of wine will tick past £220 without much effort. Expect starters hovering around £20, mains at £40, and wine lists getting going at £50. Puddings are often now in the teens, water is usually a fiver, and service is increasingly at 15 per cent. There is a well-known, well-liked restaurant in Kensington that prides itself on 'simple, seasonal' food, and has long cultivated a reputation as somewhere for its locals. Well-heeled as the residents of W8 are, surely even they must baulk at a choice of just three mains when two are in the mid £40s and the other crouches just below £60.
If you do not eat out often, this may seem extreme, but it is commonplace. The situation is not without its reasons. Energy costs are up, so too food and drink prices. This month, alcohol duty has risen. Elsewhere, staff costs have lurched upwards astronomically — chefs and waiters are no longer the underpaid, overworked workforce they used to be. A kitchen porter, once the lowliest of restaurant jobs, might easily now earn £30k a year. It could be said the industry inflicted this particular difficulty upon itself in a moment of panic — but it cannot be undone and with the increase in National Insurance contributions for employers, which are rising from 13.8 per cent to 15 per cent, restaurateurs are set to struggle further. The bogeymen that are landlords should shoulder some blame, too. Rates are bad. It's all the usual stuff, and it all adds up. Should the Government step in, reform rates and scrap the new NI contributions? Yes. But they've made few noises to indicate that they're even considering stepping in.
It is clear, too, that this is making business untenable for many, even at the top end: restaurants that closed last month alone include Locanda Locatelli, 22 years after first winning a Michelin star, and Parisian import Café Laperouse, which despite opening in billion pound hotel The OWO, couldn't draw the crowds. Café Britaly, distinctly less lavish by design, has also gone.
Restaurateurs are, then, looking bleakly at the future. Without a doubt, good food deserves to be paid for, but it does need customers capable of it. Costs are rising, inflation is a bugger. But certain operators need to adjust perspective: passing on these costs wholesale to the consumer, which some do, misses something vital — that the consumer is also worse off.
Restaurants are pushing prices up and at the same time their diners are poorer
In January, the Institute for Employment Studies reported that between 2022-2024, inflation outpaced wage growth between two and three per cent annually, resulting in 'a cumulative real wage decline of between 15-20 per cent over two years'. The upshot? Restaurants are pushing prices up and at the same time their diners are poorer. It is not hard to see how this ends.
London is fortunate that value can always be found. Two of the most recent successes in town — Josephine Bouchon and The Devonshire — both offer three courses under £30. Wouldn't you know it, they're both full. Fair pricing draws a crowd; maybe profits are slender now, but habits are formed, as is loyalty. It is also possible to eat incredibly well for a fair price, in stylish surrounds and with excellent service, at the likes of Café Mondo, Canteen, Brutto, Hoppers, Mangal II, Chishuru, Nipotina and plenty of others. There is evidently a way to do it.
But it seems that, like never before, places are chasing more, skewing higher. In doing so, they might find they run out of those who are prepared to shoulder the cost. There are perhaps only two diehard types of diners: the hedonists who'll go out even when they can't really afford it, and the one per cent. There aren't enough of either to go around. Why are restaurants shutting? In some cases, it's because the higher you go, the further there is to fall.
David Ellis is restaurant critic for The London Standard