The influence of branded restaurant chains in the thriving London market could well be replicated in the UK regions in 2014, according to Business Outlook 2014, the annual state of the markets report by specialist property adviser Christie + Co.
Private equity, which invested heavily in the restaurant sector in 2013, is also set to repeat the dose.
Restaurant sector little affected by recession
The restaurant sector was probably less affected by the recession than even those operating within it had possibly expected. Like for like sales increased across the board, new restaurant openings increased by over 11 per cent through 2103 and then there was the growing private equity activity. Indeed, the rush of private equity to occupy the restaurant space in the last 12 months has been at a level not seen since the pre-recessionary period prior to 2008. However, individual, independent restaurants still struggled somewhat.
Simon Chaplin, Director and Head of Restaurants for Christie + Co, says: “With low interest rates and lowish inflation, the consumer continued to support the sector — buoyed by prices remaining at affordable levels and an ever-expanding palate of interesting cuisines. In fact, it’s hard to remember a time where diners had so much regional and geographical choices of food experience.”
Brands increasingly to dominate
Looking ahead to 2014, it is likely that the brands (and private equity) will increasingly come to dominate the restaurants scene in 2014.
Simon Chaplin adds: “Whether independent operators, and small local and regional groups, can keep pace and compete with the power of the private-equity-backed brands will be interesting to observe. One hopes, for the sake of diversity, that consumers will find enough choice and quality in their local independent establishments.”
Specialist cuisines to increase in regions
Elsewhere, Christie + Co forecasts an increase in the number of restaurants that offer regional specialist cuisines, with the prospect that a new array of brands will emerge in these areas.
Chaplin says: “The London scene reflects this cosmopolitan and eclectic approach already, but we envisage these tastes of the unique moving increasingly into the regions throughout 2014.
“However, brandless, imageless and dated traditional restaurant concepts are likely to find themselves under yet further pressure in 2014 — not just from branded rival restaurants but from the broader food offering emanating from the higher quality pub chains.”
See all the H&C News sector articles looking in more detail at Business Outlook 2014:
Branded restaurants to bring hope to the regions in 2014
Average hospitality property prices recover and transactions set for boost
Average sale prices increase for pubs
Transactional marketplace for hotels reasserts itself