D&D London, the group formerly known as Conran Restaurants, is to abolish the optional 12.5 per service charge currently levied on its bills. As from 1 October, customers will be free to leave as much – or as little – as they wish by way of tip. D&D confirms that that the tips will be divvied up to staff on a ‘tronc’ basis.
Other restaurateurs will no doubt be looking to see how this change plays out with diners, as this could be the first shot in a revolution, which sweeps supposedly ‘optional’ service charges away. Diners beware, though: in a New York-style free-market system, top-end diners typically pay more by way of tips than Londoners pay by way of service charges.
Coincidentally, the FT also reports today that D&D remains in expansionary mode, even though the recession has brought annual profits down by about one fifth. Among the nine new openings on the stocks are three in the City and three in Birmingham.
For the year to the end of March, turnover at D&D fell by 5% to £68.2m. Earnings before interest, tax, depreciation and amortisation (EBDITA) fell to £6.5m.
Perhaps improving market conditions will again hoist the ‘for sale’ sign above the D&D business. Last year, Goldman Sachs was appointed to sell Sir Terence Conran’s 51% stake, as well as HBOS’s 18%, but market conditions got in the way.
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