To understand what is the reason behind the failure of Jamie Oliver’s restaurant empire, we have to put

it in a context, while 22 out of its 25 restaurants closed in 2019, all other restaurants oversea are
remained unaffected, at the same time, a lot of other chains in UK are facing bankcrupcy, there must be
some problems with the business environment in UK which is unfavors of those chains. I use PEST
framework to analyze the business environment.

Policials: Brexit reaised potential threats to supply and demand. Uncertainty about financial future
customers to dine out. Consumer confidence steadily fell throughout 2017, putting a squeeze on
spending on non-essential items

Economic: Simultaneously business rates, rent, and minimum wage (staff costs) have all gone
up,. devaluation of the pound makes supply more expensive, especially when Jamie’s Italian by
many ingredients from Italy. increasing the cost of running restaurants
Scocial: Younger customers expect to be able to document what they are doing and "want to be
seen in a cool place", which means restaurants have to be "Instagrammable", he says. Chains
are boring
Technology: the exist of Food delivery firms such as Just Eat and Deliveroo are a double-edged
sword for the sector. They can increase sales, and on balance, they increase profit. Food
delivery firms charge a high commission for delivery, and also restaurants lose the opportunity
to sell profitable extras like drinks.

There are .. reasons leading to the failure of Jamie Oliver’s restaurant empire:

- Market development
The problem started with their decision to expand the business rapidly from a single outlet of
Jamie’s Italian in 2018 to 43 at the end of 2016, all located in high streets of the UK. Actually, not
only Jamie’s Italian, but many other mid- range chains were playing the same game. After the
recession, they took on cheap debt and equity investment to quickly expand their businesses.
This has saturated the maket, offered customers too much choice. that the number of group
restaurants in the UK increased by almost 30% to 5,785 in the five years to March 2019.
The chain restaurants faced strong competition, a lot of restaurants were opened in a wrong
place, where had  no defined or loyal consumer-base , the cost of Opening and running
a new outlet increased, all these factors led to losses and a lot of debt. We can say that, at the
core of their business strategy was just expansion, not profit.

Failed to understand their target market, failure to evolve. Jamie’s Italian chain was built to
disrupt the mid-range maket on High Street, but that market did not really exist. very few will
pay mid-range prices for pizza or pasta. If you want pizza, you’ll most likely go for
the cheapest or cheaper option. At the same time, if you want authentic Italian food,
most will pay a few pounds more in an actual Italian restaurant. It also explains why
there is a disconnect between the restaurants and the rest of Oliver’s business as
people love the books, TV programs but they don’t go to the restaurants persuade
people to spend Fast-casual restaurant firms have to work hard to persuade people to
spend - especially as people are already spending more on experiences.
"They are all competing against each other and other forms of entertainment,

Young restaurant-goers in the UK demand exciting experiences. Yet Jamie's Italian could not
offer something special (the food and decor as being old fashioned and uninspired) to stand out
in the country's competitive Italian cuisine market.

- Jamie Oliver has a great brand, which attracts customers but if something goes wrong, it
would be really hard to fix the image. Recent years, the restaurants had got Bad reviews
and concerns over the quality of ingredients have also increased . The firm was
caught up in a meat recall by supplier Russell Hume, which the Food Standards
Agency found was "unable to demonstrate compliance with food hygiene rules".

- Oliver decided that because of his other aforementioned commitments he should get
his brother-in-law, Paul Hunt, to run the business on a day-to-day basis. The flaw in his
plan was that Hunt had absolutely no experience of running a restaurant chain. On top
of that an anonymous insider described Hunt as an ‘arrogant incompetent failure’ who
was ‘running the business into the ground’.
References
Accountsandlegal.co.uk. (2019). The Italian Flop: Why did Jamie's Italian chain fail?
| Accounts and Legal. Available at: https://www.accountsandlegal.co.uk/small-
business-advice/the-italian-flop-why-did-jamies-italian-fail [Accessed 13 Oct.
2019].
BBC News. (2019). What went wrong at Jamie's Italian?. Available at:
https://www.bbc.co.uk/news/business-48355861 [Accessed 13 Oct. 2019].
BBC News. (2019). What’s eating the restaurant trade?. Available at:
https://www.bbc.co.uk/news/business-42923499 [Accessed 13 Oct. 2019].
Blakeman, S. (2019). 5 reasons why Jamie Oliver's restaurant business failed -
Digital Media Marketing News. Digital Media Marketing News. Available at:
http://www.digitalmarket.asia/sowhoknew-5-reasons-why-jamie-olivers-
restaurant-business-failed/ [Accessed 13 Oct. 2019].
Farrell, S. (2019). Not so fresh: why Jamie Oliver’s restaurants lost their bite. the
Guardian. Available at:
https://www.theguardian.com/lifeandstyle/2018/feb/16/not-so-fresh-why-jamie-
oliver-restaurants-lost-their-bite [Accessed 13 Oct. 2019].
Naylor, T. (2019). The casual dining crunch: why are Jamie’s Italian, Strada, Byron
(and the rest) all struggling?. [online] the Guardian. Available at:
https://www.theguardian.com/lifeandstyle/2018/feb/22/casual-dining-crunch-
jamies-italian-strada-byron-struggling [Accessed 13 Oct. 2019].
 Jamie's Italian is a casual restaurant chain in the UK founded by celebrity chef Jamie Oliver in 2008.
It quickly expanded its outlets nationally and internationally. However, the chain has started to
struggle in the last few years, facing difficulties due to changes to the business environment, and
has found itself losing appeal among key restaurant-goers, such as Millennials and Generation Z
consumers.

Scope

 The UK restaurant industry has faced legal changes and Brexit uncertainty, increasing the
cost of running restaurants, and Jamie's Italian's business strategy failed to address these issues.
 Young restaurant-goers in the UK demand exciting experiences. Yet Jamie's Italian could not
offer something special to stand out in the country's competitive Italian cuisine market.
 These key consumers are also a link to generations of consumers who are highly savvy in
technology. Offering "smart" services among restaurant businesses will be a key developing
opportunity.

Mr Oliver blamed "the well-publicised struggles of the casual dining sector and decline of the UK
high street, along with soaring business rates," for the company's collapse.

it is not an easy transition to go from being a TV personality to running what is effectively a large
and complex hospitality business. Of course Oliver himself was not running the business
on a day-to-day basis, but he was the driving force behind it and it may be that he did not
have the experience or knowledge to recognise that a fashion for dining out is just that –
probably temporary when the economy is on the up and people aren’t fearful for the
future.

At the same time people have been tightening their belts – literally and metaphorically – and while
people are still buying food from restaurants, the number of people actually going on “dinner visits” is
falling while the number of people taking advantage of the growth of food delivery companies is on the
rise. For a branded restaurant chain like Jamie’s which is about the experience as much as the food, this
is not good news.

When the business environment changes you have to be fleet of foot and either innovate your
product – change it to meet the change in the environment – or at least drawback enough to
reassess where to go next. Fast expansion for a chain of restaurants is always risky, but – more
specifically – here are some of the factors I consider to be key business problems for Oliver’s
restaurant empire.

1. The restaurant business is tough. Every day small independents are closing. That has been
the case for as long as I can remember – and many new restaurants close in their first year
of trading.
2. The chain restaurant trade is newly highly competitive – over the last few years masses of
new mid-market restaurants and cafes opened – Byron Burgers, Five Guys, Leon, Joe and
the Juice and many more. The market is saturated and this is not like internet shopping
 where the world is your oyster – restaurants are service businesses that are geographically
constrained. People have to get to them and every table not filled on a night is a loss.
3. Mass marketing a premium product is difficult. This is what Oliver said about the vision he
had for his restaurants: “We launched Jamie’s Italian in 2008 with the intention of positively
disrupting mid-market dining in the UK high street, with great value and much higher quality
ingredients, best-in-class animal welfare standards and an amazing team who shared my
passion for great food and service. And we did exactly that.”

But these values come with a price and it isn’t a price everyone can pay
and those that can pay, cannot pay every day. Mass-market restaurant
chains are far cheaper to run and have a much bigger target market –
think McDonalds, Burger King, Greggs.

There is no doubt that a long stretch of economic uncertainty and low

appetite for the chain waned as it faced rising competition from numerous
Italian-inspired rivals such as Pizza Express, Strada and, more recently, Franco
Manca.

The market has become crowded after private equity investors piled money into casual dining chains, as
consumers switch spending to experiences like meals out and holidays instead of buying clothes and
homewares.

But that growth has waned since 2016, as consumers have become nervous amid the uncertainty of
Brexit, while the rise of delivery services such as Deliveroo and JustEat have encouraged the Netflix
generation to stay at home on the sofa with a takeaway.

Jamie’s Italian first showed signs of trouble in 2017 when it closed six outlets in
the wake of the Brexit vote and as its relatively expensive prices and unexciting
menus failed to stand out from the crowd. The chain made a loss of nearly £30m
that year and the chef pumped £13m of his own money into the restaurant
business as part of efforts to keep it afloat.
The following January, the group announced a restructure involving the closure
of 12 more Jamie’s Italian outlets and put the Barbecoa chain into
administration, with only one of its three outlets surviving.

With trading still tough, Oliver hired advisers in February to seek new investors
for the restaurant business. Potential buyers did come forward and the chef put
up another £4m of funds, but no suitable deal could be found.