Allegra Foodservice’s latest report, The UK Restaurant Market 2014, reveals premiumised informality is widespread across the restaurant sector. From street food to fine dining, this new era is being driven by food pleasure seekers.
Significant change in restaurant landscape
Speaking at the Allegra Restaurant Leader Summit in Cannes, Allegra Foodservice director Steve Gotham said:
“The UK restaurant landscape is undergoing a period of significant change, with a renaissance of pubs, strong emergence of new fast food, and a plethora of street food markets nationwide. These concepts enable consumers to enjoy premium food in an informal setting.”
£17.6 billion market
The UK Restaurant Market 2014, which focuses on branded fast food, pubs, and restaurants, reports the value of the restaurant market is expected to reach £48.2bn in 2014. Of this market, the branded segment is estimated to reach £17.6bn in 2014, growing 6.5% this year and outperforming the wider eating out market, with annual growth of 2.8%.
The definitive report provides details of each sector:
- Fast food (new and traditional) is the strongest growing branded segment in the restaurant market with 12.4% sales growth and 7.6% outlet growth from 2013 to 2014. McDonald’s leads sales and outlet size within this channel, followed by KFC.
- The pub channel is experiencing a resurgence driven by branded pubs, which have improved their quality and offer significant value to the consumer. The branded pub channel grew 6.1% from 2013 to 2014. Wetherspoon, Hungry Horse and Harvester lead this segment in sales and estate size.
- The branded restaurant channel continues to perform strongly, supported by regular diners looking for convenience and familiarity, and achieved 6.1% growth between 2013 and 2014. Leading brands by turnover and outlets are Nando’s and PizzaExpress.
- Fine dining has become more accessible and more informal. Examples include Dinner by Heston Blumenthal and Union Street Café by Gordon Ramsay.
- A rise in all day-dining has been led by growing demand from consumers to have ‘what they want, when they want it’. Offering food across all day-parts has contributed to this rise in casual dining.
Consumers defined as food pleasure seekers
Allegra Foodservice describes consumers as food pleasure seekers – adventurous and passionate diners, looking for premium food at all price points and at every occasion. With foodie culture being exceptionally strong across the UK, in part fuelled by the dynamic operator landscape. Social media, blogs and review sites have increased consumer knowledge and made food trendy; consumers want to follow the foodie buzz.
Consumers – of every age – expect value
The report details that consumers most active in the restaurant sector are the younger demographic, aged 18-24. Allegra Foodservice cautions operators, that given the ageing population, better engagement is required with older consumers.
Income pressures impacting consumers and, despite continued dampened confidence with a decrease in disposable income, the UK Restaurant Market 2014 reports that over the period 2012- 14, spend increased 3.0% at breakfast, 6.6% at lunch and 6.9% at dinner. This shows that consumers wish to indulge and forget when eating out.
However, although the recession has eased, value seekers remain, and consumers expect value from every channel. Discounting is still very prevalent among branded restaurants, with 46% of consumers claiming to use discount vouchers more often in the last 12 months.
Buoyant future branded market
The UK Restaurant Market 2014 reveals the total restaurant market is forecast to reach £52.0bn by 2017, the growth rate doubling from 1.3% to 2.5% over the next three years. Of this, branded/managed pubs are expected to be the strongest performing channel as more pubs move from tenanted to managed, and will capture 50% of the £3.8bn overall growth in the Restaurant Market over the next three years.
The UK Restaurant Market 2014
Released on 19 May, The UK Restaurant Market 2014 is Allegra Foodservice’s definitive annual study on the growing and dynamic UK branded fast food, pub and restaurant market. Drawing on over 6 years of in-depth research, it is a unique, authoritative view of the size and breadth of these sectors, complete with in-depth consumer insight. This industry acclaimed report provides business managers and owners with valuable insight into market developments, key issues and growth forecasts.
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