Gastropub: Cultural Shift or Question of Economics?

Posted on: July 27th, 2004 by Simon Carter & Daniel Darwood

In the mid 1980s I undertook an Econometrics project into the demand for coal. Seemed a good idea at the time.

We lived in boom times, or at least the expanding middle classes lived in boom times; their property was soaring in value, inflation was under control, salaries rising, the new tertiary sector blossoming. Culturally we were work hard, play hard kick ass American, well mid-Atlantic at least!

For centuries economists have contested whether supply creates its own demand or vice versa, one thing that’s always been certain; where the two marry up we see the most stable markets.

I’ve seen it argued on learned foodie forums on the internet that the gastro pub is the ushering of a new culture in fine dining in Britain; that the demand from a growing number for gastronomic food in simple, laid back surroundings, at a reasonable price, has prompted this revolution.

There’s some weight to this argument. To borrow a character from Jilly Cooper’s amusing (but dated) book Class, Mr Middleton of the middle middle classes has considerably more disposable income that he did twenty years ago. In fact there are now many more Mr Middletons, they work even harder, longer hours, are better educated and are more demanding in their choices.

At the same time there has been widespread recognition in the market that Mr Middleton has far less free time in modern Britain. Supermarket shelves are stacked with pre-prepared meals, while 30% of junk mail is from takeaway restaurants. He is also guided by the near blanket media coverage of chefs and food and how he can most conveniently ‘consume’ in line with his lifestyle aspirations. No doubt the current abundance and variety of all types of restaurants found today may be attributed to these facts.

On the supply side, aspiring chefs are faced with a tough choice. Mr Middleton affords them a business opportunity, however the soaring property market makes it painfully difficult for them to set up without being slaves to a financial master. So what is the answer? Keep overheads and front of house costs down, keep it simple, encourage a local market mentality – The gastropub. Hey presto, a natural marriage of demand and supply. But are gastro pubs the natural long term meeting place for these buyers and sellers? Do we have a long standing market that one might argue is symbolic of a cultural shift?

It does, at first sight, look like a natural and uniquely British mixture – pubs diversifying upwards and gastronomy diversifying downwards. Mr Middleton is no longer satisfied with pub grub but getting dressed up on a week night is too much hassle and maybe just outside his price point.

Cultural shift is strong language however. It presumes that behavior goes beyond a function of circumstance and opportunity.

For example, would the gastropub survive in different economic circumstances; consider a significant downturn – as happened when the boom bubble burst in the late 1980s. Property prices slumped and the cost of (borrowing) money became considerably more expensive, there were also added pressures on employment.

In this situation, the number of Mr Middletons shrinks as does their disposable income. On the supply side, new gastronomic chefs face barriers to entry into the market due to the increased cost of mortgages, negative equity and the prospect of diminishing demand.

As with any economic cycle, it is the institutions which survive while the small players turn over at a rapid rate. The middle market either fails or re-invents itself.

So what of gastro pubs? To argue against the case of economics we must ask: are Mr Middleton’s tastes, priorities and requirements changed for good, such that the gastro pub will permanently be on his agenda? Will the number of new, able, young and talented chefs continue to emerge and need a low cost home?

For a genuine cultural shift to be the case we’d have to accept that the British perception of food is moving inexorably toward our continental neighbours. Through boom and slump alike, the French have enjoyed gastro style food in simple, low cost establishments for generations. We may romantically conjecture that Mr Middleton will cast aside the junk mail and Domino speed dial for good, in favour of the British equivalent – The gastro pub.

While this appears a relatively unlikely scenario, the middle classes are considerably better informed, travelled and educated than ever before; some time ago I bumped into an old university friend and his wife at an airport, they were busy feeding their four year old her breakfast – filter coffee and Pain au Chocolat – not something they would have experienced at the same age.

No doubt there exists a Mr Middleton somewhere, who will pay the £3000 top up fee to fund his son through an Economics degree and just maybe his final year Econometrics project will be to model the market for gastropubs. I wonder, will the next generation of Middletons be any the wiser?