How did J Lyons become the largest catering business in the world within 30 years?
J Lyons is established, and the first tea rooms are opened
Barnett Salmon (1829 – 1897) and Isidore Gluckstein (1851 – 1920) established a successful chain of tobacconists.
Montagu Gluckstein (1854 – 1922), a salesman for the firm, lamented the poor state of catering at trade exhibitions. He suggested that the public could be provided with a better offer than beer and sandwiches. Gluckstein and Alfred Salmon partnered with Joseph Lyons, a distant relative, to form J Lyons & Co with a capital of £5,000. J Lyons & Co successfully provided catering for the Newcastle Exhibition of 1887. Contracts for other exhibitions soon followed.
J Lyons & Co was established as a public company with a capital of £120,000 in 1894. The original stakeholders were Montagu Gluckstein, his brother Isidore Gluckstein, brother-in-law Barnett Salmon (maternal grandfather to Nigella Lawson) and Joseph Lyons. Montagu Gluckstein was the de facto chairman of the business.
The first Lyons tea shop opened in September 1894 at 213 Piccadilly. It had 200 seats and a £30,000 lease. After a year the shop had made a profit of £11,400, and the company was able to pay a dividend of ten percent.
The early tea room exteriors were enticing and extrovert, and the interiors were often glamorous, and intended to evoke the great Victorian exhibitions and Parisian cafes.
The Lyons tea shop girls went on strike in protest against low wages in 1895.
J Lyons establishes Cadby Hall
Cadby Hall was opened in Hammersmith to centrally produce baked goods for the company’s 17 tea shops from 1896. There were 37 tea shops in London by 1900, and expansion had begun in the provinces, with six branches in Manchester, four in Liverpool, and two in both Leeds and Sheffield.
Quality was good and prices were reasonable. The tea rooms were particularly popular throughout the daytime with lower middle class office workers. Cinema and theatre-goers patronised the chain on evenings.
The first Lyons Corner House was opened on Coventry Street in 1909. The Corner Houses were much larger than the tea rooms, with a greater appeal to the middle classes. Live bands and an informal atmosphere helped to cement their popularity. The Coventry Street outlet became the Lyons flagship outlet, and seated 2,000 diners on multiple floors. It was the largest restaurant in the world. A second Corner House, capable of seating 1,200 diners, was opened at the Strand in 1915.
J Lyons was one of the largest caterers in the world by 1911. Half a million meals were served every day through 200 shops and restaurants. The company employed over 12,000 people, including 2,000 people at Cadby Hall. The Cadby Hall works covered ten acres and included sixteen bakehouses, five cold storage rooms and three butchers’ shops.
20,000 people were employed by 1913. J Lyons was the largest baker in London, the largest tea merchant in the world and the largest restaurant operator in the world.
J Lyons dismissed all naturalised German and Austrian employees from its staff in 1914.
J Lyons also expanded into hotels, building the Regent Palace Hotel in London at a cost of £600,000. Opened in 1915, it was the largest hotel in Europe, with 1,028 bedrooms.
Lyons tea was far and away the market leader by 1915: five million packets were sold every week by 160,000 shopkeepers. The company accounted for one in four cups of tea sold in London.
Lyons had a capital of over £2 million by 1917.
Tea, coffee, bread, cakes, ice cream and groceries which had originally been produced for the tea rooms began to be sold directly to the customer, all manufactured at the company’s Hammersmith site.
In 1918 Lyons acquired two leading packet tea companies, positioned second and fourth place in the market respectively: Horniman of London and Black & Green of Manchester. The acquisitions were intended to increase Lyons’s market share in the North of England: Horniman was strong in Yorkshire and G&B strong in the North West.
The company had a share capital of £3.5 million by 1919. By this time Lyons was likely the largest catering company in the British Empire. There were 182 tea shops by 1919, making it easily the largest chain of its kind in the country.
Largest caterer in the world; Greenford plant is established
Cadby Hall was struggling to meet demand by 1919, so Lyons acquired a 30-acre freehold manufacturing site at Greenford, on the outskirts of London. Lyons opened the largest tea packing plant in the world there in 1920. Coffee, cocoa and confectionery production were also transferred to Greenford. It was the sixth largest manufacturing site in Britain.
J Lyons was the largest catering business in the world by 1921. Cadby Hall boasted the largest bakery in the world.
The Trocadero Restaurant was acquired in 1921.
There were over 22,000 employees by 1922. There were 160 Lyons tea shops in London, and a further 50 throughout Britain.
It was calculated that seven million people drank Lyons tea each week in 1922.
Lyons began construction on the Cumberland Hotel at Marble Arch, the largest hotel in Europe, in 1922. It had 1,500 rooms and a Corner House.
The Coventry Street Corner House was extended in 1923 to create what was likely the largest restaurant in the world, with seats for 4,500 diners. It also boasted the largest chocolate shop in the world. It was open 24 hours a day.
Ice cream manufacture at Cadby Hall had reached the mass production scale by 1923.
Lyons was the 20th largest company in Britain by 1930, with a market value of £12.1 million and 30,000 employees. It was the largest catering company in the world. Over ten million meals were sold each week. Lyons held 14 percent of the packet tea market, with over 1.25 million packets sold every day. 600,000 Swiss rolls were sold every week.
The teashop chain continued to grow strongly until the onset of the Great Depression. Teashop losses between 1934 and 1938 totalled £374,000. Despite this, due to its manufacturing and hotel concerns, the company remained the largest catering company in the world in the latter half of the 1930s.
Lyons directly employed over 42,000 people by 1937.
Lyons produced 3.5 million gallons of ice cream in 1939.
Lyons had 253 tea rooms by 1939. Due to wartime labour shortages, self service was introduced to the tea rooms from 1941, and rolled-out across the chain from 1945.
Part II of this post can be found here.