Casual dining operators looking beyond ‘saturated’ London market

Aviary restaurant, ETM Group

Casual dining operators recognise the “significant demand” for nationwide alternatives to fast food.

According to new research from the NPD Group, a British consumer market research agency, casual dining visits over the year grew by 4.7% YE March 2017.

The visits to casual dining establishments, including Yo Sushi, Zizzi and Carluccio’s, totalled 520 million, a growth of approximately 24 million over the previous year.

The bulk of the 4.7% visit increase achieved came from outside London. The capital stood still managing a tiny 0.2% visit change.

The regions recording the most success for casual dining are Scotland, West Midlands, Yorkshire/Humber and Wales, all enjoying double-digit growth.

Citing figures from Britain’s eating-out foodservice market (known as out-of-home or OOH), the NPD Group says casual dining sales for YE March 2017 increased nearly 6% to £5.3 billion.

But casual dining has a disproportionate penetration in London (nearly 8% of total OOH traffic) compared to the rest of Britain (4% of OOH traffic).

Now there are signs of operators struggling to expand in London’s crowded restaurant market and seek fresh growth from other British cities and towns.

Casual dining sales and visits have raced ahead over the past eight years and, according to NPD, there are now an estimated 4,800 casual dining outlets in Britain.

Sales are up nearly 50% since YE March 2009 while visits are up 36% over the same period. That means casual dining restaurants are pulling in 137 million extra visitors each year compared to 2009.

In contrast, again since YE March 2009, the full-service eating-out market (including local Indian, Thai, Chinese and many other types of restaurant) saw sales rise less than 5% and visits decline by around 4%.

Cyril Lavenant, foodservice director at the NPD Group, said: ““Casual dining businesses will never give up on London because the capital is very much the heart of Britain’s eating-out industry. However, any further growth in London will be challenging. In contrast, the push to the regions will deliver the new growth.

“There are more than 40 casual dining brands in Britain, but some have only a few outlets and these are often in London. If all the brands expanded successfully beyond the capital, casual dining could represent a much higher proportion of the British foodservice industry. Casual dining represents 4.6% of Britain’s foodservice market against the 52% held by QSR outlets. That huge difference points to the scope for the continued growth of casual dining.”

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