Slaters became one of the largest catering companies in the world.
John Crowle (1841 – 1906) was the son of William Crowle, a butcher and farmer of 25 acres at Charlestown, Cornwall. Crowle worked at his father’s butchers shop in St Austell before emigrating to London in the 1860s.
An enthusiastic and energetic man, Crowle was a master butcher employing thirteen men at a shop on Kensington High Street by 1881. He acquired a restaurant business from a Mr Slater (established 1828) and opened further outlets across the West End of London.
Slaters became a limited company from 1889. Outlets were located around central London, with a flagship restaurant in Piccadilly. The restaurants targeted the middle class market.
Crowle was a staunch Wesleyan Methodist and temperance advocate, and as a result his restaurants did not serve alcohol. As diners did not linger over drinks, the restaurants enjoyed a faster turnover of customers, and a lunchtime table could be filled up to six times.
There were eleven Slaters outlets by 1900, mostly located in the City of London, but also in West London and the West End. The restaurants had elegant interiors with white tablecloths and napkins.
The loss-making ice cream business was sold to Carlo Gatti & Stevenson Ltd in 1901.
John Crowle died in 1906. His estate was valued at £448,696, half of which he gifted to the temperance movement in his will (he had lost his only son to typhoid fever during the Boer War). It was one of the largest bequests to date in Britain.
Slaters had 21 restaurants and sold 120,000 meals a week by 1907.
The company struggled in the period following the death of Crowle. After a massive decline in profits, the managing director, William Kirkland, was dismissed in 1911.
Alcohol licences had been introduced to at least some of the Slaters restaurants by 1912.
Slaters operated thirteen à la carte restaurants and nearly 40 grocery outlets, all located within London and its suburbs, by 1913. The company had capital of £355,000.
Slaters operated 60 outlets, and had an annual turnover of over £600,000 by 1916. This included the largest fishmonger business in Britain, and the largest poulterers business in London, which together had 26 branches and a turnover of nearly £200,000 a year. Fish was supplied to many leading hotels and restaurants throughout London.
The First World War saw the customer base eroded, and many of the restaurants became loss-making.
Slaters was one of the largest catering companies in the world by 1926. A freehold property on Oxford Street was acquired for £100,000 in 1928.
The authorised capital of Slaters was increased to £1 million in order to acquire Bodega, a restaurant company, in 1928. The merged company was known as Slaters & Bodega. The acquisition brought with it 30 outlets, and two hotels, one in Yarmouth and one in Eastbourne. The catering businesses were complementary, and it was anticipated that there would be efficiency savings across management and overheads.
The Slaters on Kensington High Street became a favourite restaurant of the Irish novelist James Joyce (1882 – 1941) in 1931.
Slaters & Bodega operated three provincial hotels, 29 Slater Restaurants and Beta Cafes, 37 shops, 25 Bodega wine bars and four Cope’s wine lodges by 1932.
The Second World War had a severe impact upon Slaters & Bodega. 92 out of 119 company outlets had been damaged or destroyed by enemy action by May 1941. War time conditions also seriously impacted upon sales.
Slaters & Bodega became the subject of takeover speculation, and was acquired by Charles Forte (1908 – 2007), an Italian entrepreneur with interests in catering and property, for £1.55 million in 1954. Financial backing from Ind Coope, a large brewer and owner of public houses, helped Forte to almost double the size of his catering empire.
Forte immediately divested the Slaters fish and vegetable shops, however Slaters & Bodega continued as a subsidiary of the Forte empire until at least 1964.
Levy & Franks pioneered the introduction of catering to public houses in the late nineteenth century. The business developed the Chef & Brewer concept, which survives as the second oldest pub chain in the world.
Isaac Levy (born 1845) was born into a working class Jewish family from Whitechapel, London. He worked as a bookmaker before he acquired the licence of The Pitt’s Head pub on Old Street, London in 1887.
As the capital grew, city workers increasingly commuted from the suburbs, and were keen for somewhere to buy a hot lunch. However, pubs at the time were descendants of the gin dens, and it was difficult to get a good cup of tea, let alone a meal. Levy was passionate about food, and he acquired The King Lud at Ludgate Circus, where he began to sell Welsh rarebits.
Establishment of Levy & Franks
Ezekiel Levy (born 1872), the son of Isaac, followed his father into the public house trade when he acquired the licence of the Admiral Keppel, Fulham Road in 1893 (later sold to Levy & Franks in 1924).
Ezekiel Levy entered into partnership with his brother in law, Henry “Harry” Franks (born 1869), to acquire the licensed premises of his father in 1897.
Isaac Levy grew wealthy and relocated to 50 Russell Square, where he employed five servants by 1901.
Harry Franks originated the Chef & Brewer name in 1901.
Levy & Franks was incorporated as a private company in 1911.
Levy & Franks controlled 70 to 80 public houses by 1914. A typical daily sale for one of their pubs was 600 sandwiches, 135 meat pies and 800 Welsh rarebits.
Establishment as a public company and subsequent owners
Levy & Franks was converted into a public company in 1946. The business owned 46 licensed houses, all but two of which were in the Greater London area. The Chef & Brewer brand was familiar throughout London by the 1950s.
Levy & Franks operated 50 pubs and eleven delicatessens by 1962.
Levy & Franks entered into financial difficulties due to high warehouse and head office costs, and the directors approached Grand Metropolitan, a hotels and catering concern, who acquired the business for £2 million in 1966.
Chef & Brewer was acquired by Scottish & Newcastle, a large British brewer, in 1993.
Chef & Brewer was sold to Spirit Group, a pub company, in 2004.
Greene King, a large British brewer, acquired Spirit Group in 2014. The Chef & Brewer chain operated over 140 outlets as of 2019.
Harry Ramsden is the most famous name in fish and chips across the world. There are over 40 restaurants in Britain.
Harry Ramsden (1888 – 1963) was the son of a fish and chip shop proprietor in Bradford, Yorkshire. He worked as a taxi driver and as a publican before enlisting in the army. After leaving the army in 1918, he set up a small fish and chip shop of his own.
After several successful years in Bradford, Ramsden was advised to move to the countryside for the health of his tubercular wife. He borrowed £150 to buy the property and equipment of the Silver Badge Cafe at White Cross, Guiseley in 1928. A former army hut, the wooden building measured just 10 x 6 foot, however the location was next to a tram terminus used by tourists to the Yorkshire Dales and the Lake District. Ramsden borrowed £400 from his wholesale fish suppliers to buy the surrounding wasteland.
Ramsden built a large 100 seat restaurant in 1931, in an attempt to take his classic working class dish upmarket. Takings were £7,825 in 1937. £5,104 of sales were taken in the first class restaurant, and £2,721 were taken by the second class restaurant and take-away sales.
Local mills and factories lacked staff canteens, and would often dispatch a member of staff daily to collect lunch from Ramsden’s.
Ramsden’s nephew, Harry Corbett (1918 – 1989), the creator of the Sooty and Sweep puppets, would occasionally entertain diners with his piano skills.
Ramsden was being chauffer-driven in a Rolls Royce by the 1940s.
Ramsden revealed his three tips for cooking fish and chips in 1952:
Always use haddock- there’s no finer fish for frying
Fry the fish and chips in butcher’s [beef] dripping
Mix the batter and allow it to stand for 24 hours
Ramsden could tell if the frying oil was hot enough by the sizzle that the chips made when they entered the pan. Chips were cooked for three to three and a half minutes, depending on the type of potato, and fish was cooked for five minutes. He claimed not to know the recipe for his batter as it was supplied to him in powder form by a Leeds company.
The Yorkshire Post described Ramsden’s as “the most famous fish and chip restaurant in Yorkshire” in 1952, and it was one of the busiest in the world. The restaurant car park could hold 200 vehicles.
The success of the venture was based on a great location and Ramsden’s hard work, perfectionist commitment to quality and his flair for marketing and showmanship.
It was reported in 1952 that Ramsden had sold the business for £35,000 to William Mark Kirby, a fish and chip restaurant proprietor in Grantham. However at the last minute, Kirby pulled out of the deal.
Ramsden decided to enter semi-retirement, and to mark this, he sold fish and chips for one day at the one and a halfpenny price his father had sold it for in 1912. 8,000 people were served, including over 2,000 in a single hour.
Ramsden sold the restaurant, with 94 seats and a staff of twenty, to Eddie Stokes (born 1917), an experienced caterer, for £37,500 in 1954. Ramsden died in 1963 and left an estate valued at £44,177.
Like Ramsden, Stokes believed that quality pays, and he maintained a high attention to detail. He installed Bohemian cut-glass chandeliers, stained glass windows and replaced the linoleum floor with wall to wall carpeting. There were fresh flowers and linen tablecloths. Batter was mixed by hand for 30 minutes.
The Sunday Times reported in 1965 that were queues to get into the restaurant every day. Deliveries of fish arrived daily; 85 percent haddock, ten percent halibut and five percent plaice. The restaurant employed 100 people. By this time the restaurant had a listing in the Good Food Guide.
Stokes sold Ramsden’s to Associated Fisheries, who owned eight Seafarer fish and chip restaurants in London, in 1965. The restaurant was expanded in 1969. Stokes remained as managing director of the restaurant until his retirement in 1970.
The Sunday Times described Ramsden’s as the largest fish and chip restaurant in the world in 1971. By this time it had 186 seats, 150 staff and parking for 400 cars. That year 1.5 million people were served and sales amounted to £300,000.
In 1974 the restaurant used 400,000 lbs of fish, 100,000 lbs of beef dripping, 900,000 lbs of potatoes, 9,000 pints of vinegar, 20,000 bottles of sauce and 26,400 loaves.
Margaret Thatcher visited Ramsden’s in 1983. Somewhat embarrassingly, the Prime Minister and her entourage forgot to pay the bill before they left the establishment.
Harry Ramsden’s was acquired by John Barnes for £3 million in 1988. He believed that the Ramsden’s brand was under-developed. He signed a deal with United Biscuits to produce Ramsden’s branded foods.
Barnes began to build the company into a chain of restaurants. The company went public to fund expansion overseas from 1989. The first international franchise was a 200-seat restaurant in Hong Kong.
Controversially, Barnes replaced beef dripping with blended vegetable oil, and fresh fish was replaced with frozen fillets.
Ramsden’s was acquired by Granada for £20 million in 1999. Compass, who had merged with Granada, sold the chain to EQT in 2006. Ranjit Boparan acquired Ramsden’s for £10 million in 2010.
The Guiseley outlet became loss-making, and it was closed down in 2011. The site was acquired by Wetherby Whaler, a local fish and chip restaurant company.
John Pearce pioneered mass low-cost catering in Victorian London.
John Pearce (1847 – 1930) was born into humble circumstances in Shoreditch, London. His mother’s strict Baptist faith was to have a lasting influence upon him. His father died when he was young, so from the age of nine he had to earn a living.
Pearce became an apprentice porter in Covent Garden. He would portray this period of his life as a miserable one, a Dickensian tale of “child slavery” where he was “the absolute property of his master”. He determined to establish his independence at the first possible opportunity.
Pearce recognised the difficulty that labourers had in procuring good food early in the morning. In 1866 he hired a costermonger’s barrow from which he sold coffee, bread and cakes. He would set up his stand from four o’clock in the morning on City Road.
After six months Pearce had saved enough money to build himself a stall, which he named the Gutter Hotel. Within a few years he was serving 2,000 customers every day. Pearce sold the Gutter Hotel for £200 in 1879.
Pearce used the proceeds to buy the lease of 68 Aldersgate Street, London. He turned the premises into a working-class restaurant, which grew to sell as many as 600 beef-steak puddings each day. Future Prime Minister Ramsay MacDonald (1866 – 1937) was numbered among its customers.
Pearce leased two adjacent properties on Farringdon Road in 1882, where he sold as many as 1,200 beef-steak puddings a day. Soon, 6,000 people were being served on a daily basis.
Shortly afterwards, Pearce partnered with Sir Edward Sullivan, Baronet, who provided the business with the capital to expand.
Pearce opened restaurants across London, and began to brand his outlets under the Pearce & Plenty name from 1883.
Pearce was inspired by the temperance movement, and offered his restaurants as alternatives to public houses and taverns. Pearce restaurants were one of the few places outside of public houses and hotels where women could get a meal. Despite this, he was never an idealist, but a hard-headed businessman.
Unwilling to miss out on the middle market, Pearce opened two British Tea Table outlets in the City of London, aimed at young clerks, in 1892. Popular meals included eggs on toast and ham salad in summer, and soup, chops and steaks in the winter.
There were 22 Pearce & Plenty outlets and 24 British Tea Table outlets by 1896. Much of the food was prepared centrally at Farringdon Road, where 40 bakers were employed. Over 800 people were employed across the business, of whom almost half were women.
The business was incorporated under the name British Tea Table in 1897, with a nominal capital of £300,000. Assets of the business were valued at just over £225,000. Independent directors were nominated to the board.
Between 60,000 and 70,000 people were served every day by 1897. There were 64 shops and over 1,000 employees by 1898. Upwards of 100,000 meals were served every day by 1901.
The business peaked in 1903, after which profits began to decline. The board of directors investigated the decline in profitability in 1904, and concluded that a failure to update and modernise outlets was to blame. The competition had increased, and rivals such as J Lyons had made a greater effort in the décor of their tea shops. Also, food quality failed to match that of its rivals. Some outlets were rebranded as British Restaurants.
John Pearce resigned as a director in 1904, furious at the direction the company was taking. He founded a new company, J.P. Restaurants, in 1905.
33 out of a total of 70 outlets were loss-making by 1905. This number had risen to 48 by 1907.
A committee of shareholders was appointed to investigate the affairs of the company in 1907. The board of directors all promptly resigned following the nomination of John Pearce to the committee.
The company was loss-making by 1908. That year the shareholders committee reported that many outlets were trading at a loss due to inefficient management and mistakes in policy.
The 32 outlets that remained profitable were sold to J.P. Restaurants for £28,000 in 1909. Five other outlets were divested separately. British Tea Table was liquidated in 1910.
J.P. Restaurants had 51 outlets around London by 1923.
Pearce established Associated Hotels, a low-cost hotels company, in London in 1925.
J.P. Restaurants was taken over by the Aerated Bread Company, a large catering concern, in 1927. John Pearce was retained in a consultative capacity. The freehold production facilities on Farringdon Road were immediately closed down, with production transferred to the central ABC facility in Camden Town.
Following a stormy meeting, Pearce and his sons were forced to resign from the board of directors in 1930. Shortly afterwards John Pearce had a heart attack and died. He left an estate valued at £51,073.
Spiers & Pond was the first large-scale catering business in the world. It organised the first cricket test match between England and Australia, helped to popularise dining in the West End of London, and commissioned the Criterion Theatre.
Origins in Australia
Gold was discovered in Melbourne, Australia in the early 1850s. The booming economy attracted Felix William Spiers (1832 – 1911), the son of a London shipbroker, and Christopher Pond (1828 – 1881), a former printer’s apprentice from Camberwell in Surrey.
Spiers and Pond formed a partnership in 1858 and acquired the lease of the Cafe de Paris, adjacent to the Theatre Royal on Bourke Street, one of Melbourne’s principal thoroughfares.
Modelled on Simpson’s restaurant on the Strand, London, it was elegantly decorated, with stained glass domes, polished oak and rosewood floors and palatial fittings. The Illustrated London News declared in 1861, “there are few public dining rooms in the world superior to the cafe [de Paris]”.
The Cafe de Paris would frequently serve more than one thousand people a day. The pair of men complimented each other, with Pond acting as the charming mein host, and Spiers serving as the accountant. Pond had Bohemian tendencies, and cultivated the patronage of Melbourne’s acting and literary set.
Impressed by the large numbers of spectators at cricket matches, Spiers & Pond sponsored the first ever tour of an English national cricket team to Australia in 1861-2. Each player was paid £150 plus first class travel expenses. Spiers & Pond made a fortune from the venture.
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Spiers attempted to convince Charles Dickens (1812 – 1870) to give a reading tour of Australia in 1862, but the author had to decline for health reasons.
Relocation to Britain
Spiers & Pond sold their Melbourne assets in early 1863 and relocated to Britain. They had noticed the poor state of railway catering in their homeland, and saw an opportunity for improvement. They secured a concession in a railway arch at the Metropolitan Railway’s newly-opened Farringdon Street Station, from where they sold buns and other ready goods. Spiers & Pond paid the railway company a proportion of their takings in lieu of a fixed rent, in order to ensure a mutual interest in the success of the venture.
Spiers & Pond had established concessions at several Metropolitan Railway stations by 1864. They won the catering contract for the London, Chatham and Dover Railway in 1865.
Two elegant London restaurants were opened in 1866, one at Ludgate Hill Station and another at Victoria Station. The Ludgate restaurant became a popular haunt for bohemian and literary types. Charles Dickens praised it as one of the first places in the country where the railway traveller could get “wholesome food, decently served”.
Spiers & Pond employed around 800 people by 1867, and operated 21 refreshment bars, including 18 on railways. Spiers & Pond claimed to be the first to popularise low-cost wine in Britain.
Spiers & Pond helped to popularise dining in the West End. They took over the Gaiety restaurant in 1869, next to the famous theatre on the Strand, which became one of the most popular restaurants in London. They built the Criterion restaurant and Criterion Theatre in 1873.
Spiers & Pond became well-known for hiring attractive barmaids. Dickens described the women in their employ as “bright-eyed, cheerfully obliging nymphs”, whose beauty helped to draw in male patrons. George Augustus Sala (1828 – 1895) pointed out their “fine physiques”.
Spiers & Pond had refreshment rooms at over 100 railway stations on nine different railway lines by 1873. The railway bars sold 8,000 gallons of sherry every week.
The two partners attributed their success to “capital, enterprise [and] experience”. Before long, Spiers & Pond held the catering contracts for every major railway line, supplied from a large central depot at Ludgate Hill. Spiers & Pond also diversified into the general store business, and established a mail-order catalogue.
Spiers & Pond acquired numerous hotels from 1879 onwards, including the Victoria Hotel in Manchester (lease bought for £33,000 in 1891) and Bailey’s Hotel on Gloucester Road (1894).
When Pond died in 1881 he was regarded even in America as “probably the greatest caterer in the world”. It was estimated that the enterprise could feed 200,000 to 300,000 people every day. Pond’s personal estate was valued at over £215,000.
Incorporation, increased competition and decline in profitability
Shortly after Pond’s death, Spiers & Pond was incorporated with a capital of £500,000.
Spiers & Pond had 219 refreshment rooms at railway stations by 1886. There were 6,000 employees by 1891, including 1,000 women. Spiers & Pond had a share capital of £600,000 and catering contracts with 15 railway lines by 1899.
The railways noted the profitable nature of the Spiers & Pond refreshment rooms, and some began to take their catering concessions in-house . Meanwhile, competition intensified as J Lyons entered the railway catering market. As a result, Spiers & Pond began to increasingly focus on its hotels estate.
The Ludgate Hill Station restaurant was sold to J Lyons in 1905.
Spiers retired to Paris in 1905. He died in 1911 with an estate valued at over £150,000.
Following reduced profits, the directors stepped aside in 1906 and handed management of the company to a shareholder committee. Due to a reduction in the value of licensed properties, Spiers & Pond reduced its capital from £1.2 million to £720,000 in 1907. Spiers & Pond was forced to deny rumours that J Lyons planned to takeover the company in 1911.
A new board of directors and managing director were appointed in 1913. Due to difficult trading and labour shortages caused by the war, as well as recent licensing legislation, Spiers & Pond entered into receivership in 1916. Unprofitable properties were divested, and the company re-emerged in a stronger position.
The Criterion Theatre and Restaurant was sold to Charles E Cottier, a director of W & G Buszard, in 1917.
Spiers & Pond was again forced to deny rumours that it was a takeover target in 1922.
The Times stated that Spiers & Pond were, “almost the only contractors for dining-car services on the English railways” in 1925.
The Aerated Bread Company, which had recently acquired a string of catering companies, made a takeover offer for Spiers & Pond in 1928. Spiers & Pond directors, who controlled the company’s votes, rejected the bid, although the two companies maintained a friendly working relationship.
Spiers & Pond acquired the Grand Hotel in Scarborough, assessed by the Yorkshire Evening Post as “one of the finest hotel properties in the country”, in 1928. The Grand Hotel in Brighton was acquired in 1929
The Southern Railway contract was lost after 40 years in 1930, following a lower bid from a rival.
The Queen’s Hotel in Eastbourne was acquired in 1937.
Spiers & Pond acquired the Alford House development opposite Victoria Station in London from the Aerated Bread Company for over £500,000 in 1959.
Acquisition of Spiers & Pond
Spiers & Pond was acquired by Express Dairy for £5.5 million in 1960. It was a friendly takeover, approved by the directors who retained the majority of voting shares. At this time Spiers & Pond was a leading hotelier in Britain with 13 hotels, as well as Chicken Inn restaurants in London and 18 restaurants.
Spiers & Pond acquired the Royal Hotel in Scarborough in 1964. The company built the Viking Hotel in York for £850,000 in 1968.
Express Dairy was acquired by Grand Metropolitan, a hotels company, in 1969. Spiers & Pond was absorbed into the Grand Metropolitan network of hotels.
The ABC tea shop was a ubiquitous part of early twentieth century London life, mentioned by T S Eliot and Virginia Woolf, and lambasted by George Orwell.
The Aerated Bread Company (ABC) was incorporated in London in 1862 with a nominal capital of £500,000. It was formed to manufacture bread using a new patented process which used carbon dioxide instead of yeast.
As a mass producer, the ABC had a large number of contracts with institutions such as schools and hospitals. It also had a number of retail outlets in London which sold bread and cakes directly to consumers.
Establishment of the ABC tea shop chain
In 1884 a manageress at a ABC bakery shop near London Bridge Station suggested to the directors that on-site sales of tea might increase revenues. This proved successful, and was rolled out across all outlets.
Competitors sold pre-prepared tea from a large container, and the quality was variable. ABC differentiated itself by preparing fresh tea to order.
The tea shops proved popular among clerical workers, who appreciated their affordable prices, and there were around 70 outlets by 1889.
Production at a centralised bakery in Camden Town from 1891 helped to keep costs low. The low-margin business received criticism for the low-pay of ABC waitresses, who worked a 62-hour week.
Increased competition from J Lyons J Lyons opened its first tea shop in 1894. Lyons branches were more upmarket and better managed than the ABC shops, and had more central London outlets than ABC by 1911.
ABC served over 1.25 million customers in 1911. There were 150 branches by 1912. By this time the tea shops had evolved into cheap restaurants. A commentator in 1911 wrote that service was slow, but the quality of the tea was “beyond reproach”.
ABC was far better known for its London tea shops than its bread manufacture by 1913.
New management from Buszard
ABC acquired W & G Buszard, a London bakery chain with 140 shops, including the prestigious Criterion restaurant in Piccadilly, in 1918. ABC were attracted to the merger by the strong management team at Buszard. Buszard directors, led by Charles Cottier (1869 – 1928) and Frederick Hutter (1876 – 1927), quickly came to dominate the ABC board, with Cottier serving as chairman and Hutter as managing director.
Cottier was a forceful personality, and under his leadership ABC undertook numerous acquisitions from 1919. These were Bertram & Co (railway catering), James Cottle (Liverpool and Manchester restaurants), Cabins, JP Restaurants (with 80 outlets around London), Newberys (shop-fitters), Abford Estates (a large property development) and a controlling interest in W Hill & Sons (29 shops), at a combined cost of just under £500,000.
Frederick Hutter was described as the “Napoleon” of the London catering trade in 1921. Hutter had humble origins, beginning his career as a baker’s assistant.
ABC had a total of 200 to 250 tea shops and restaurants by 1922. Over two million people drank tea in either a Lyons or an ABC tea shop in London every week by 1925. The manufacturing site at Camden Town covered over four acres.
ABC had 156 branches across London in 1926. That year also saw the prim black and white “Victorian” waitress uniforms replaced by blue dresses.
ABC built the largest single tea shop in Britain, opposite Victoria Station, in 1926. The site was bought from the Duke of Westminster, supposedly for £500,000.
Hutter died in 1927, and Cottier died the following year. It appears that the business suffered following the loss of their strong leadership.
Following low profits, the well-known accountant Sir W H Peat was contracted to perform an independent review of the company in 1929. Peat argued that the numerous recent acquisitions did not tie in with the core ABC business, and as such, very few economies of scale could be made. He also argued that the company had paid excessive dividends, and had failed to update and modernise its shops, which had become run down.
The manufacture of aerated bread ended in 1954.
Acquisition by Allied Bakeries
ABC, with 164 tea shops, was acquired by Allied Bakeries, controlled by W Garfield Weston (1898 – 1978), for nearly £3 million in 1955. ABC was the second largest chain of restaurants in Britain. Allied Bakeries was motivated by the increase in outlets for its bakery products, and valued the ABC estate at between £1.7 million and £2 million.
Unprofitable branches were quickly divested, and new outlets opened at better locations. Allied Bakeries invested in the outlets to bring them up to the standard of their competitors. The changes worked, and the previously loss-making venture had become one of the most profitable subsidiaries of Allied Bakeries by 1959.
Allied Bakeries sold the Abford House subsidiary, which consisted of a large freehold property in Victoria, London, for over £500,000 to Spiers & Pond, a hotels and catering company, in 1959.
ABC reported a profit before tax of over £850,000 in 1962. A pre-tax profit of £735,000 was reported in 1966.
Decline of the ABC tea shop
Beginning in the 1960s and into the 1970s the trade of the tea shops declined. Rivals with no or limited seating had lower overheads. There were 200 ABC outlets in 1976, but the tea shops were being phased out in favour of take-away bakery shops.
Production of small, hand-finished cakes at the Camden Town site was ended in 1976, resulting in the loss of over 400 jobs. The Camden Town site was antiquated, and unsuited for modern production, and it was closed for good in 1982, with the loss of a further 200 jobs. The ABC tea shops also disappeared at around this time.
The Camden site was demolished a few years later, and a Sainsbury’s supermarket now stands in its place. Any residual ABC trademarks are held by Associated British Foods, the successor company to Allied Bakeries.
McDonald’s is the largest restaurant chain in Britain as measured by sales.
Establishment of the Woolwich branch
McDonald’s was established in Britain with a restaurant at Woolwich, a London suburb, from November 1974.
McDonald’s had hitherto found limited success in European markets. Beef prices that were 20 percent higher than in the United States, as well as an expensive property market meant that Britain was among the last of the major Western markets to receive a McDonald’s outlet. To add to this challenge, the Wimpy hamburger chain was already well-established in Britain, with 625 outlets.
McDonald’s had originally sought a West End of London location which could target American tourists, but was unable to obtain a suitable site. Meanwhile the property in Woolwich, acquired from Burton, the menswear chain, was relatively affordable, and with its busy high street was considered to represent “average Britain”. It was argued that if the Woolwich market could be cracked then the rest of the country could follow.
Robert “Bob” Rhea (1932 – 2010), a successful former American franchisee, and the United States parent company each held a 45 percent stake in the venture. Rhea was appointed as managing director. Geoffrey Wade, who had managed the property operations of Burton, held a ten percent stake, and was assistant managing director.
Bob Rhea was a likeable man, with a larger than life personality.
McDonald’s had a modest start in Britain. First day takings at Woolwich were an underwhelming £98. However, a reporter from the Daily Mail was impressed by “that quintessentially American classlessness about the place – a sense that minks and mackintoshes could mingle here without any sense of self-consciousness”.
A Big Mac cost 45p (by a conservative estimate, this is the equivalent of £4.09 in 2015). This was on par with the price charged for an equivalent Wimpy hamburger, which used soy bean as a filler, unlike the pure beef McDonald’s product.
McDonald’s preferred to source ingredients locally, but until it reached scale the company was unable to convince British suppliers to meet its exacting product specifications. An exception was Hawley’s of Birmingham, who won the bread bun contract after nine months of negotiations in August 1974.
When the first McDonald’s outlet opened, the beef and buns were British, but onions were imported from one area of California, cheese and much of the paperware from West Germany, milkshake mix from the Netherlands, fish from Denmark, potatoes from Canada, apple pies from Oklahoma and sauces and pickles from New York. Much of the machinery and interior fittings were imported from the United States.
There was initially only one concession to British tastes: the Woolwich outlet sold tea. Despite the British preference for vinegar on chips, McDonald’s never provided any. Bob Rhea argued that vinegar was used to cut through the grease on British chips, and that McDonald’s fries weren’t greasy. By December 1974, McDonald’s UK had reduced the sugar content of its bread buns from 13 percent to nine percent to suit British tastes.
Paul Preston (born 1948), a gregarious and outgoing blue-collar native of Ohio, was the first manager of the Woolwich restaurant. He later commented, “The first store was a disaster. Nobody came. Nobody knew who we were. We tried every gimmick under the sun – endless free meals and promotions. It took a long while to get going”.
Bob Rhea admitted that the opening was “tough” because initial sales at Woolwich were “very, very slow”. He described a British public that was highly sceptical of the restaurant, and that didn’t understand what fast food was. British people used knives and forks for most meals, and preferred to administer their own condiments.
Growth was slow to take off for two reasons: not only did McDonald’s have a difficult time persuading British food processing companies to meet its requirements, which increased costs, but secondly, beef burgers had a reputation for low quality in Britain.
Further outlets are opened and advertising begins
The first McDonald’s cinema advertisement appeared in 1975, and on local television a year later.
Three more outlets had been opened in the London suburbs of Holloway, Croydon and Catford by January 1976. The first two were, like Woolwich, former Burton stores.
McDonald’s began to open outlets in London’s West End, the heart of the entertainment district, from 1976, beginning with a branch in Haymarket. These new outlets were immediately profitable.
Bob Rhea ambitiously announced that the company’s goal was “nothing less than a McDonald’s restaurant in every town and city in Britain”. McDonald’s UK had 17 outlets by the end of 1978.
Ian Watson of The Sunday Telegraph commented in December 1978 that “McDonald’s trendy style has proved popular, particularly with the young”.
Bob Rhea argued that the main obstacle to growth was not competing fast food restaurants such as Wimpy, but mothers, who he claimed were reluctant to bring their children to a restaurant that they perceived as unhealthy and possibly expensive.
Paul Preston claimed that the turnaround for the company began when it began to target its marketing towards children. He said, “most of our television adverts went out in the afternoon when the kids were watching. It was pressure from the kids which brought their parents into our restaurants”.
McDonald’s grows and enters profitability
McDonald’s UK had lost $10 million by 1979. The breakfast menu was introduced from 1982. The American parent company bought out the Rhea and Wade stakes in 1983, however the duo continued to manage the business.
The company grew by raising standards in the fast food industry with high standards of cleanliness and effective television advertising campaigns. The Times described the outlets as “modern and with attractive decor” in 1983. McDonald’s UK entered into profitability from 1984 onwards.
McDonald’s UK had 146 restaurants, a turnover of over £100 million, and outlets across the South East, the Midlands and the North West by October 1984. The Yorkshire market was entered from 1985. The company established a stepping stone approach to growth, building a sizeable network of stores before entering a new region.
Chicken McNuggets were launched in 1984. The Happy Meal was introduced from 1986.
Bob Rhea entered into retirement from 1986, and Paul Preston was appointed as chief executive of McDonald’s UK.
McDonald’s did not franchise restaurants until 1986, by which time it felt that its identity and operations had been firmly established. That year, the first McDonald’s drive thru in the UK was opened in Fallowfield, Manchester.
The Strand and Croydon outlets were the busiest McDonald’s restaurants in the world by 1989. By the end of 1989 there were 340 outlets.
The McChicken Sandwich was introduced in 1989.
Public backlash and mad cow disease
Market research undertaken in 1991 showed that consumers were beginning to perceive the chain as arrogant and inflexible. That year McDonald’s had a major misstep with the launch of the McPloughman’s sandwich of cheese, pickle and salad. Introduced without any prior market research, the company admitted that staff were embarrassed by both the concept and the name.
Amid fears over mad cow disease, McDonald’s beef sales dropped by 50 percent in March 1996. The company bowed to public pressure and temporarily ceased selling British beef in its restaurants.
McDonald’s sued two environmental campaigners who had published a leaflet defaming the company in 1990. McDonald’s won the case in 1997, but a High Court judge decided that the company “exploited” children with its advertisements and placed young employees under undue pressure. It was also accepted that low pay at the chain had helped to depress wages in the catering sector.
The Financial Times argued that the case was a “public relations disaster”. The media portrayed the battle as a David vs Goliath fight, when the two campaigners, denied legal aid, were forced to represent themselves in court.
Healthier options are introduced
The McFlurry ice cream was launched in 2000.
McDonald’s UK profits stagnated from the turn of the century amidst increasing concerns about the negative health effects of fast food. Sales fell every year between 2000 and 2005. The chain responded by launching fresh fruit and organic milk in 2003, and toasted deli sandwiches from 2005. Porridge, bagels and freshly ground coffee were added to the breakfast menu from 2004.
25 unprofitable stores were closed in 2006 and the company began to refurbish its outlets. The rise of coffee chains such as Starbucks and Costa had made outlets seem dated: new furniture, subdued lighting and wifi were introduced. That year Steve Easterbrook was appointed as CEO of McDonald’s UK.
McDonald’s converted its delivery lorries to run entirely on biodiesel made from oil discarded from restaurant fryers from 2007.
New stores were opened for the first time in six years in 2008, and a regional pricing system was introduced. This followed a decision to allow franchisees more flexibility in setting prices.
The changes worked: sales rose by ten percent in 2008. 80 percent of all British families visited McDonald’s at least once a year by 2009.
Deli wraps were introduced as permanent menu items from 2011.
A testament to his success, Steve Easterbrook was appointed CEO of McDonald’s Corporation in Illinois, Chicago from 2015.
The British operation serves three million people every day, and over the course of a year, 90 percent of the British population visits a McDonald’s.
There were over 1,250 McDonald’s in Britain in 2015. Only Costa Coffee (1,830) and Greggs Bakery (1,670) had more food outlets. McDonald’s UK had a turnover of just under £1.5 billion in 2013. This was higher than Costa’s total worldwide sales, and was nearly double the Greggs turnover of £760 million.
Part I, about the early history of J Lyons, can be foundhere.
After 1950, J Lyons developed the first business computer. It introduced household-name brands such as Ready Brek and Wimpy Hamburger. Today, the Lyons brand itself has all but disappeared.
J Lyons was the largest catering company in the world in the early 1950s, with a capital of £10 million and exports to fifty countries. There were 33,000 employees and 230 tea shops in 1954.
The Corner House restaurants and hotels alone employed over 4,000 workers in 1951. On normal Bank Holidays the Corner Houses could expect to serve 250,000 meals.
Lyons engineers developed LEO (Lyons Electronic Office), the first business computer in the world. Large computers had previously only been used for military or scientific purposes. The 5,000 sq ft computer began use on 17 November 1951, and calculated stocking levels. LEO calculated the bakery staff payroll from 1954.
Lyons introduced the American-style hamburger chain to Britain when it opened a Wimpy franchise in the basement of a Lyons tea shop on 277 Oxford Street in May 1954. There were 1,100 Wimpy outlets in 34 countries by 1973.
Lyons Pure Ground Coffee was the highest selling coffee in Britain in 1953. Lyons launched its standard market teabag brand, Quick Brew, in 1955.
A “Big Four” held 70 percent of the British tea market by 1956. Lyons held second place behind Brooke Bond.
Maryland Cookies were introduced from 1956. The company launched Ready Brek instant porridge in 1957, to outstanding success.
Lyons sold its confectionery subsidiary to Callard & Bowser in 1961. With the growth of television advertising, middle-size sweet manufacturers were forced to consolidate in order to reach a scale capable of launching their own campaigns.
Lyons retired most of its tea distribution vans from 1962. The vans had delivered to independent grocers throughout the country. The company had reasoned that business was transferring towards the supermarkets. The decision was premature however, and allowed rival Brooke Bond to increase its market share at the expense of Lyons.
A joint venture with Schweppes, Rose Kia-Ora Ltd, was a leading soft drinks supplier in the UK, with 46 percent of the UK squash market by 1963.
Lyons acquired Eldorado of Liverpool, the fourth largest ice cream manufacturer in Britain, in 1963, and rebranded its ice cream business as Lyons Maid. The takeover took its share of the ice cream market to 34 percent, and Lyons was the second largest ice cream manufacturer in Britain (after Wall’s) throughout much of the twentieth century. The FAB ice lolly was introduced in 1967. The Greenford ice cream factory was the second largest in the world by 1973.
The computer division required extensive capitalisation, so it was sold to English Electric in 1964.
Lyons had become the biggest supplier of pre-packaged cakes in Britain by 1966, and was the clear market leader with a 28 percent market share.
Lyons had more than two thirds of the packaged ground coffee market in 1966.
Throughout the 1960s J Lyons was joint third in the British tea market alongside Typhoo, with around 15 percent market share, behind Brooke Bond and the Co-operative Wholesale Society.
Lyons was probably the largest in catering sales and supplies in Britain by 1969.
Lyons was the brand leaders in ground coffee in 1970. However its market share in tea was 13 percent, and it was far from the brand leader it once was. Quick Brew had an eight percent share of the popular tea market. It was strongest in the South of England, especially London, where it held 17 percent of the market. By this time Horniman and Black & Green had been positioned as the company’s premium tea brands. Horniman was the company’s biggest tea seller in South Wales, and Black & Green was strong in Manchester and the North West.
Lyons hotels held over 6,000 beds in 1970.
It was argued in The Spectator in 1968 that “You can grade the Lyons properties into four classes — redundant, non-profitable, underdeveloped — and Cadby Hall [the production centre].” The number of tea rooms had declined to 120 by 1969, and many were loss-making. The Coventry Street Corner House was closed in 1970. Between 1970 and 1972 the remaining tea rooms were converted into Jolyon Restaurants.
Cadby Hall was closed in 1972, with production relocated to Yorkshire and Northamptonshire. Nearly 3,000 staff were affected.
Lyons acquired Tetley Tea for £23 million in 1972. This gave Lyons the second highest market share for tea in both the British and American markets. In Britain Lyons now had 17 percent of the tea market, behind Brooke Bond on 40 percent.
Baskin Robbins, the ice cream manufacturer with 1,600 stores in America, was acquired for £16 million in 1973.
Lyons encountered financial difficulties following the global oil crisis of 1973. They had borrowed £250 million to finance acquisitions in the early 1970s, mostly from non-British sources. Foreign loan repayments became expensive as the value of sterling fell. As a result, the company began to rapidly divest its core assets just to meet is liabilities.
J Lyons dropped from the top 100 companies in Britain by market capitalization in 1974. The company had capitalization of £39.5 million and a turnover of £249 million in 1975.
The tearooms and corner houses fell prey to the more trendy coffee bars of Charles Forte, as well as the increasing appeal of fast food and ethnic cuisine. The last tea shop closed in 1976.
The 35 British hotels (with the exception of Tower Hotel) were sold to Rocco Forte’s Trust House Forte for £27.6 million in 1976. Forte promptly recouped £11 million in a year by cutting costs.
Wimpy, with 676 UK outlets, was sold off to United Biscuits for £7 million in 1976.
The Salmon and Gluckstein families were forced to relinquish voting control over Lyons in 1976. By allowing ordinary shareholders to have votes, they hoped to acquire more capital, which was desperately needed. Previously the families had held six to seven percent of company equity but 61 percent of voting shares. By this time Lyons had a market capitalization of over £40 million and sales of £650 million.
Lyons was subject to a friendly takeover by Allied Breweries which valued the company at £64 million in 1978. The merged entity was known as Allied Lyons. The Cadby Hall sites were demolished in 1983.
The remant Lyons food businesses were sold off throughout the early to mid 1990s.
Ready Brek was sold to Weetabix in 1990.
Lyons Maid had been loss-making for several years, mainly due to increased competition following the entrance of Mars into the ice cream market. It was sold to Clarke Foods for £12 million in 1991. There were 800 employees in Greenford, Middlesex and Liverpool. Clarke Foods was acquired by Nestle in 1992.
In 1994 the Lyons coffee businesses were divested: ground coffee to Paulig of Finland and instant coffee to Philip Morris.
After acquiring Pedro Domecq in 1994, Allied Lyons renamed itself to Allied Domecq.
1994 also saw Lyons biscuits of Blackpool sold to Hillsdown Holdings. There were 780 employees.
Lyons Cakes was sold to Tomkins of America for £35 million in 1995. The business employed 1,700 people in Britain and Ireland. Meanwhile, the Tetley Tea business was subject to a management buyout, valued at £190 million.
Lyons Quick Brew tea is still found in the UK, although distribution is extremely limited. Lyons Red Label tea can be bought from Waitrose. Lyons remains the highest selling tea brand in Ireland, with over a third of the market. Lyons Maid has been re-branded as Nestle. Lyons brand cakes, biscuits and freshly ground coffee are still sold, although without the presence they once had.
Lyons’ major weakness was nepotism. As late as the 1950s, the board was populated exclusively by family members. The Financial Times ran a headline “Too much Salmon is bad for Lyons”. A non-family member chairman was not elected until 1977. Although a public company, the majority of voting shares were controlled by the founding families until 1976. But by then, it was too late to save the company extant.
Bass was one of the largest hospitality companies in mid-1990s Britain. The company had successfully introduced popular chain pubs such as All Bar One and O’Neills earlier in the decade.
Dave & Buster’s was a burger bar/video game arcade hybrid. Bass opened its first D&B in Solihull in the West Midlands in 1997. A second outlet was opened in Bristol in 1998 at a cost of £12 million. The outlets were large (40,000 to 60,000 square feet) and located in out of town locations.
A third outlet was scheduled to open in Thurrock, Essex, but never did. Bass had also explored sites in Croydon and Leeds.
Bass did not invent the D&B concept, and merely held the UK franchise. Bass withdrew from its franchise agreement in 2000 and closed the two outlets. The chain still exists in its native America.
Little Chef dominated roadside catering in Britain, and inspired a rival, Happy Eater, which it was later allowed to acquire.
Happy Eater was established in 1973 by Michael Pickard, with an outlet at Ripley, Surrey. Pickard had formerly managed Little Chef, but had been dismissed, supposedly following a personality clash with its owner, Lord Forte.
Happy Eater was the first roadside restaurant chain in Britain to principally target the family market. Happy Eater outlets had superior children’s play area facilities compared to Little Chef, both inside and outside.
By 1980 there were 17 restaurants, and the company needed expansion capital. Courage, the national brewer, acquired a 52.7 percent stake.
The company had a turnover of £8 million in 1983-4, which rose to £11.8 million for 1984-5. By 1986 there were 61 outlets and the company employed 1,430 people.
The majority of outlets were situated in South East England, East Anglia, the Midlands and along the A1. In 1986 only one outlet was franchised, the rest being owned or leased. Outlets could seat between 70 and 110 diners.
In 1987 the chain was acquired by Trust House Forte, the owners of Little Chef, for £14.2 million. In 1988 the chain peaked with 90 outlets.
The Prime Minister, John Major, notably dined at a Happy Eater in 1991. For this he was mocked by some in the media as an uncivilised buffoon, but others praised his demonstration of the common touch.
In 1995 the chain was described in The Observer, The Guardian and Scotland on Sunday as “downmarket”.
The first six months of 1995 saw 14 outlets rebranded as Little Chef, leaving fewer than 50 Happy Eaters remaining.
In 1996 Little Chef was acquired by Granada, a conglomerate which operated motorway service stations. In October 1996 it was announced that all remaining Happy Eaters would either be converted or closed down. The brand ceased to trade in 1998.