Branded restaurant market to exceed £13b by 2015

2 mins read

The FINANCIAL — The UK's branded restaurant market is set to exceed £13.6b by 2015, according to a new report released by Allegra Strategies.

 

The finding comes on the back of a survey of 12,000 consumers about their eating-out habits and almost 300 industry leaders about their expectations for the industry. Meanwhile, this year the sector is forcecast to grow by 5.6% to £11.1b.

According to Caterer and Hotelkeeper report, it also found that eating out was becoming increasingly ingrained in consumers' behaviour in the UK, fuelled by discounting and vouchers, such as two-for-one and 50% off deals.

Half of all consumers surveyed claimed that they ate out with the same frequency as they did a year ago, and an additional 13% stated that they ate out more often. More than a quarter of respondents, however, were trading down, visiting lower-priced restaurants to save money.

Of those consumers surveyed, 17% stated that they would stop going to a restaurant regularly if discounting stopped being offered there. More than half (54%) said they regularly used discount vouchers, and a third of those who used them did so "most of the time".

Meanwhile, 45% of operators said they expected discounting to become more widespread in future. And almost half of those businesses using such initiatives had reported a rise of up to 5% in sales, which was directly attributable to these offers. A further 51% believed that footfall would decrease should they remove these offers.

Commenting on the report's findings, Mike Saul, head of hospitality & leisure at Barclays, which sponsored the publication of the report, said: "Eating out has become part and parcel of many consumers' lives, and is no longer a rare treat. But as discretionary spend continues to come under pressure, consumers are taking active steps to switch their spending towards more affordable restaurants. As a result there has been a clear shift by operators to meet these price-sensitive needs.

See also  Tourism leaders from across Asia and the Pacific Look to Innovative and Resilient Tourism

"As we look ahead, operators will be faced with a juggling act to manage both consumer price expectations while building long-term loyalty. We are already seeing exciting innovations to this end and a continued focus on the quality of experience will ensure the sector's projected growth remains on trend."

Additional findings included: Fast-food operators, including health-conscious outlets, will be leading growth in the industry, outperforming the sector as a whole with growth of 6.7% this year.

 

In the next 12 months, 70% of consumers surveyed expect to eat out at the same rate as they have done in the past year.

 

Italian remains the nation's favourite eating-out cuisine, as stated by 40% of consumers, and Indian cuisine comes second, with 30% of consumer preference.

 

The average spend per person in branded restaurant chains is £12.98 for lunch and £20.13 for dinner.

 

Men are more likely to spend more than women, and the over-60s are the highest-spending group.

Anya Marco, director of insight, Allegra Strategies, added: "Although industry sentiment is guarded, understandably dampened by a cautious economic outlook, it is clear that UK consumers are refusing to give up on affordable eating out. The report shows that visit frequency is expected to remain stable and regardless of prevailing economic conditions, people are determined to continue to enjoy themselves when they can.

"Successful operators in the branded restaurant market recognise the pressures on household budgets. By focusing on more innovative ways to deliver value for money, it is these operators who are benefiting most from the continued propensity to habitually eat out and spend on experiences that cannot be easily replicated at home.

See also  Tourism leaders from across Asia and the Pacific Look to Innovative and Resilient Tourism

"Branded restaurants are outperforming both the wider hospitality market and the overall retail sector. The strength of a brand should not be underestimated in the restaurant market. With established marketing prowess, delivery of consistency and familiarity, and the ability to capitalise on new outlet expansion opportunities, branded chains will continue to drive growth in the market."

 

 

Leave a Reply