London's property market 'brutal' for expanding wine independents

By Gemma McKenna

Published: 10 November, 2014

London's independent wine merchants and restaurateurs say finding new locations is "extremely challenging", given intense competition from established operators.

Operators in both the on and off-trade said competing with the major chains meant commercial agents often ignored them, or they were left with "second pickings".

James Dawson, founder of Humble Grape, which secured crowd funding of £350,000 plus an additional £125,000 from venture capital, to open its first technology focused wine bar, started its search in June 2014. "We put in offers for five or six different premises," all of which were unsuccessful. Dawson is hopeful it has now secured a site, although it will still take a few months to finalise the deal. "I didn't realise it would be so hard to do, especially when you've got this money - people say it takes 18 months to two years to find your first premises. It's been extremely challenging - the hardest thing I've done in my career," he told Harpers.co.uk.

"It's pretty brutal", he added. "We found a place in Spitalfields, and it ended up with 15 restaurants pushing for the same site. We were in the top three, but in the end Gordon Ramsay or someone got it."

"It's super-frustrating, but you don't want to overpay and be in the wrong area. Then everything would fall on its face," Dawson said.

Vagabond Wines Vagabond WinesVagabond Wines

Vagabond, owned by Stephen Finch, operates two stores, one in Fulham and the second in Charlotte Street, which has now been trading for almost a year. His business blurs the boundaries between off and on-trade, selling wine and allowing consumption on site. It has plans for a third site to open in Spitalfields in spring 2015.

One major challenge, said Finch, is the A3 licensing requirement, which generally applies to restaurants. He said if one becomes available on a good street, massive brands jump on it, making it much harder for smaller retailers to gain a foothold. "That's why we just squeak under the planning laws as our primary use is as a retailer."

Vagabond Wines

He also said commercial property was a very "closed and incestuous market", with the big chains having their own dedicated teams. They get informed first, and can do private deals before the property even comes on the market, he said. "What the rest of us get to look at is second pickings," he said, unless it becomes available outside that network. His Soho outlet was a former Nicolas site, and Finch saw the disposal list and "went to town to get it". "It took about a year, and there was all sorts of trauma, but we prevailed," he told Harpers.co.uk.

The whole property search is "massively time consuming", especially when such a small part of what you do is ultimately productive, Finch said. "The odds are stacked against us small guys," he added.

Vinoteca VinotecaVinoteca

Charlie Young, co-founder of Vintoeca, which is opening its fifth venue in Kings Cross in February 2015, said the group is now in the "most ideal position" of being sought out by developers, as happened with this site.

"The developers want to have an interesting mix. They don't want high street chains or something predictable. The fact that we're established, but not a household name meant we were the first people they came to, and not the ones they never came to at all," he told Harpers.co.uk.

Before getting to this point, Young said, finding a site was "very difficult". "Commercial estate agents are very fond of working with people they've worked with before," he said. This means getting those agents to send through details "soon enough or at all" was very hard.

"You could get caught up in opening sites very quickly and come unstuck," Young warned, which is why it took its time. Its first site opened in 2005, but by the time site three was opening, Young and co-founder Brett Woonton brought in additional management and operational help, he said.

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