In this series, City A.M. looks at the financial and economic impact of the ongoing pandemic on a range of small and medium-sized businesses across London. Today: how evaporated demand and high rent obligations ultimately proved fatal for Ethos.
Meat-free and plant-based
Ethos opened six years ago, catering for vegans by offering ‘deliciously different’ meat-free and plant-based dishes to eat in or take away.
Based just off Oxford Street and open all day, Ethos was feeding on average around 400 to 500 people a day before the pandemic.
“Until lockdown we were doing a reasonable trade,” tells Sundip Bhundia, director of Ethos Foods.
Like others in the sector, Ethos remained closed until they were ready and allowed to re-open safely. As they offered a pay-by-weight buffet service, this meant pivoting their offer on top of the necessary Covid-19 measures.
“But when we reopened last month, we were down to 30 customers a day. With our high rents, lower central London footfalls and the current restrictions on trading, it was soon clear the business was no longer viable.”
Rents in Fitzrovia
As demand did not sufficiently recover after re-opening the site, Bundia said the business simply could not keep up with its rental obligations for the property on 48 Eastcastle Street in Fitzrovia, a few minutes walk from Oxford Street.
Ethos has now closed their site. The closure has resulted in 22 staff redundancies and several independent suppliers losing their livelihoods.
“We were never late with our rent [before the pandemic], but we did not get much help from our landlord”, he said. “The best they offered was moving us from quarterly to monthly payments, which doesn’t help when you have not got money coming in.”
Three years ago, the rent doubled following a market-based rent review, increasing to over 15% of turnover, excluding rates and service charges.
“We negotiated but in hindsight we should have been firmer,” Bhundia acknowledges.
He does think many landlords are currently too hands off and do not care enough about sustainability or the long term.“Hopefully there will be the necessary correction in the market going forward.”
Looking ahead, Bhundia is confident Ethos will be back “when the market conditions are right and in a new exciting location.”