Some landlords ‘reluctant to gamble' on hospitality tenants post-Covid, says Jonathan Downey
Street Feast founder Jonathan Downey has said that his food market business will return, but some landlords are still reluctant to "gamble" on hospitality tenants post-Covid.
In a letter to shareholders, Downey said he had agreed heads of terms for a 20-year lease on a site in Manchester, but the landlord backed out of the deal after lockdowns and restrictions exposed the fragility of some food, drink and leisure ventures.
"They don't want to gamble on hospitality tenants any more, [the landlord] is going to turn the entire building into flats," he told The Caterer.
Street Feast's four London markets, which included Dinerama in Shoreditch and Giant Robot in Canary Wharf, all permanently closed after the pandemic hit. Downey also shut his Soho bar Milk & Honey, blaming the impact of the 10pm curfew in September 2020.
The parent company for Street Feast went into liquidation in August and documents filed to Companies House show the business, renamed 100 Clifton, had debts of £2.1m.
High-profile shareholders in Street Feast included Russell Norman, Giles Coren, Nigella Lawson and Jamie Oliver. Downey said many had backed the business with small amounts through the government's Enterprise Investment Scheme to help "create something great for London", and were largely protected from losses.
He said: "When we start again they will automatically become shareholders for the same amount in the new company. It assumes the next thing I do is successful, but it should be, and I'm confident we'll be going strong again soon."
Downey, who has also been looking at sites in London, Birmingham and Bristol, added that some landlords had been "badly burnt" by hospitality and the impact of lockdowns and as a result were more reluctant to take a chance on independent operators.
"You get this widening of the gap between the creative, individual, independent business and the already very well-established chains and brands," he said.
"If a venture capital firm puts £300m into a fast food business it's not going to just walk away from it, it'll keep growing and hoping smaller competitors that aren't as well funded will drop out of the market, and that's what's happening in our industry.
"It's going to take a while [for independents] to come back and we're going to be living in chain land for a while."
Downey hopes Street Feast will return, but believes this is unlikely to happen before spring 2022.
He adds: "It's tricky times. We will be back at some point, I just don't know when and where. I'm not rushing to open in London given my experience of dealing with landlords here."
