Jamie’s Italian, what has gone wrong? After such a promising start Jamie Oliver’s restaurant chain is collapsing, but what went wrong and can their misfortune provide lessons for other businesses?
It was a good news story which had an unhappy ending. When celebrity Chef Jamie Oliver launched Jamie’s Italian in 2008, he hoped to transform the mid-market dining sector.
Unfortunately, in the last month his restaurant empire has collapsed with all but three of his 25 remaining restaurants closing. The administrators have been called in and more than a thousand people face losing their jobs. So where did it go wrong?
What happened to Jamie Oliver’s restaurants?
Jamie Oliver’s restaurant chain, Jamie’s Italian, has fallen on hard times in recent years. In 2018, the company filed for administration and closed several of its locations. Oliver himself has admitted that the restaurant failed to keep up with changing tastes and trends. This is evident in the menu, which features dishes that are heavy on meat and carbs and light on vegetables.
In addition, the restaurants are expensive, with main course prices averaging around £30. As a result, Jamie’s Italian has struggled to attract customers in an increasingly competitive market. Even Oliver’s personal reputation has taken a hit in recent years, with some accusing him of being out of touch with modern consumers. Nevertheless, Oliver remains optimistic about the future of his restaurant empire, vowing to bounce back from this setback.
Why did Jamie Oliver’s restaurants collapse?
Things started well. When the first restaurant was launched, the Guardian said that, if he kept up this form, he would be driving a ‘prize herd of recession proof cash cows to market’. His chain had name recognition, it had a mission and it had a ready market of people who were looking for better and healthier cuisine.
Even with all those things going for them they couldn’t survive. So, why did it flounder and lessons can we learn?
- Failing to maintain standards
Early form might have been good, but it didn’t last. A review of the Westfield restaurant in Stratford described a meal as being ‘appalling, a honky, salty swamp of sauce’. They had committed the cardinal sin of all chains: failing to maintain standards across the board.
While you might have a very good meal in one restaurant it was difficult to guarantee you’d also have a good meal at another. McDonalds are the masters at this art, maintaining consistent standards at their branches. They understand that a problem in one outlet will harm the reputation of all the others.
- Falling behind the market
Jamie’s Italian might have been fresh and exciting when it started, but things have moved on. Standards have improved and you can now find mid-market restaurants offering good, food and ethical welfare standards everywhere you look.
They may well have transformed the market, but the market quickly caught up and overtook them. People could find better food for a lower price elsewhere and this showed in the TripAdvisor Reviews.
- Being too big
Another common complaint is that the restaurants were too big for the number of staff manning them. As one employee told the BBC, they often found themselves being run off their feet and handling as many as 11 tables at the same time. With those workloads it is difficult to maintain standards.
- Poor transparency and planning
There were also complaints that the leadership teams had not been honest with their workers. The same BBC article explains that, although staff knew things were not as good as they might have hoped, management were still talking positively about the future with plans for refits on the horizon.
All of a sudden, though, they were told not to come in and that the locks were being changed. Staff were invited to take part in a conference call where they were told that they were being made redundant.
- Poor market conditions
Oliver’s restaurants aren’t the only ones suffering. The likes of Strada, Byron Burger and Prezzo’s, which all hit that mid-market sector, have also been struggling. Customers are staying away from the middle market. They are downgrading to smaller experiential restaurants which have upped their game or saving up until they can afford something truly exceptional.
The people in the middle are getting crunched. The market is changing and people want something different. Jamie’s appears to have been just one of several which were not strong enough to keep up.
A weak business model
Ultimately, the chain’s difficulties were sowed at the start. They relied too heavily on the celebrity appeal of the name, set prices too high and kept staffing levels too low. They were slow to evolve and adapt and failed to take care of the bottom line: finances.
This is what kills businesses of all kinds. They can feel like there is hope, and they can be making bold plans for the future, but if they get to the point where they can’t pay their bills it’s the end of the game. Cashflow is the lifeblood of a business and, if that dries up, the results are inevitable. It may be a sad end to a positive story, but businesses of all kinds should take note and learn lessons.
Jamies Italian restaurant business has gone into administration, according to a statement released by the company. The announcement comes as a shock to many, as the restaurant was founded by celebrity chef Jamie Oliver only six years ago. Jamies Italian was a chain of restaurants that served casual Italian cuisine, and at its peak, it had over 40 locations across the UK. However, the restaurant struggled in recent years, due to increasing competition and rising costs.
In 2018, Oliver announced that he was injecting the company with £12 million of his own money in an effort to keep the business afloat. However, this was not enough to save the company, and it has now entered administration. This is a disappointing end for Oliver, who rose to fame with his TV show The Naked Chef. However, it is hoped that he will bounce back from this setback and continue to be a successful entrepreneur.
Will Jamie Oliver bring back his restaurants?
Jamie Oliver’s popular Italian restaurant shut its doors for good in May, with the celebrity chef citing “tough trading conditions” as the reason for its demise. But could Oliver eventually bring the restaurant back?
It’s certainly possible. In an interview with The Telegraph, Oliver said that he still believes in the concept of Jamies Italian and that he would “never say never” to a possible resurrection. He also hinted that the current situation might just be a temporary setback, saying that he’s “not going to give up on it.”
Of course, a lot would need to change for Jamies Italian to make a successful comeback. For one thing, Oliver would need to find a way to make the restaurant more affordable, as high prices were cited as one of the main reasons for its failure. Additionally, he would need to find a way to stand out in a crowded marketplace; with so many Italian restaurants now competing for customers, it can be tough to stand out from the pack.
Still, if anyone can make Jamies Italian work again, it’s probably Jamie Oliver. He’s a proven commodity and has shown time and time again that he’s not afraid of a challenge. So while Jamies Italian may be gone for now, don’t be surprised if it makes a comeback in the future.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.