Gaby’s Deli, a landmark Jewish cafe serving salt beef and falafel in the heart of London’s theatreland for more than half a century, is to close at the end of this month, seven years after leading performers and writers campaigned to save the site from redevelopment.

The deli’s proprietor, Gaby Elyahou, an 82-year-old Iraqi Jew, is to retire and his nephew, Menachem Kojman, 72, who helps to run the cafe, has concluded that he can no longer battle against the march of chain restaurants dominating the West End of London.

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The deli’s menu of Middle Eastern food, including chopped salads, baked aubergine, hummus, chicken liver and grilled meat – as well as salt beef and falafel – mark it out among neighbouring restaurants. Its walls are decorated with old photographs and newspaper clippings; most of those serving behind the counter or at tables are family members.

Customers include the Labour leader,Jeremy Corbyn, the actor Matt Damon and the director Mike Leigh.

“I’m sad because a lot of people helped us survive in the past few years, and I feel like I’m letting them down,” said Kojman. “We have a lot of loyal customers.”

Facebook Twitter Pinterest The actor Simon Callow embraces Gaby Elyahou (right), owner of Gaby’s Deli. Photograph: Nigel Howard/ANL/Rex

Before joining his uncle at Gaby’s, Kojman ran his own restaurant in the West End, the Olive Tree, but was forced to close it 20 years ago when faced with a big rent increase. “There used to be a lot of little shops and cafes around here, but it’s all changed,” he added. “McDonald’s, KFC, all these big chains, they can afford to pay high rents. Small business can’t compete against big businesses. It’s all about money.”

Kojman said he would “look for some part-time job” after Gaby’s shuts its doors.

In 2011, when the site faced redevelopment as a chain restaurant, some of the UK’s best-known performers and writers – including Simon Callow, Vanessa Redgrave, Miriam Margolyes and Alex James from Blur – put on a series of impromptu cabaret performances in support of the cafe.

Gaby’s – which opened in 1965 – was given a reprieve by the building’s landlord, Gascoyne Holdings. According to Kojman, the agreement was informal: “We carried on paying rent, they let us stay.”

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Among the clientele this weekend was Roma Tearne, the Sri Lankan-born novelist and artist. “I’ve been coming here since I was a teenager, truanting from school. I was involved in the campaign last time, we’ve done everything. But Gaby, he’s had it. This is my last meal here, I can’t believe it.”

At another table, Per Clauson from Sweden said he had visited Gaby’s every time he had come to London since being introduced to the deli by Jewish friends in 1971. “This is the best salt beef I’ve ever eaten,” he said.