Brexit “more of an excuse than a reason” for restaurant chain struggles

Brexit is not the primary cause of restaurant chain struggles in 2018 despite it routinely being offered up as an excuse by businesses, a survey has concluded.  

Digital ordering technology provider Preoday polled nearly 700 individuals and found that 69% of professionals working for pubs, bars and restaurants said Brexit was “more of an excuse than a reason” for chain struggles.

Just 18% of a consumer panel who were also questioned, meanwhile, thought it was the main cause of industry difficulties.

Asked what professionals do see as the main reason for the general struggles of chain brands, more than a third (38%) said the biggest problem was too much competition.

In second place was not having an understanding of customers (9%) and increasing rent (9%). Poor property decisions received just 3% of the vote.

While competition is seen as the major problem of the industry as a whole, the respondents’ answers changed when asked to reflect upon their own businesses.

Voicing their concerns for the coming year, the cost of labour rose to the top, with 58% expecting to be troubled by this in the coming year.

Industry competition was cited by 56% of respondents, while consumer confidence was selected by 35%.

Nick Hucker, CEO of Preoday, said: “The results suggest that not all businesses associate their biggest issues with the rest of the market. Just 5% identified the cost of labour as the number one reason for struggles in the wider industry, yet it was the most popular response when considering their own business. The increased living wage cannot be avoided or controlled, businesses need to find a way of recouping the costs through customer spend and to do this they really need to get under the skin of what consumers want from a meal out.”

Preoday’s research further investigated how well the industry understands the needs and wants of its customers.

Asking a panel of consumers to identify what they look for in food venue, it found that a great menu (91%) came out on top, followed by the quality of the food (85%).

When asked what it is about the menu that most appeals, 57% of consumers said it was the variety, while 44% referred to the descriptions used and 26% were drawn in by the format and appearance.

The professionals recognised the importance of the menu, though they put the importance of food quality (69%) in front of the menu itself (63%).

Also at odds with consumer opinion was the importance of great staff – while, at 66% this was the third most important feature for consumers, less than half (46%) of the professionals identified the staff as a key need for customers.

Mr Hucker added: “There seem to be two big issues at play. Number one is an increase in costs within the industry – and number two is a divergence between what food service businesses think customers want, and what they actually want.”

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