Takeaways coin in more than restaurant groups for the first time after dramatic profits swing

The top 100 takeaway businesses in the UK are now more profitable than their counterparts in the traditional restaurant sector, it has been claimed. 

Analysis from finance specialist Funding Options shows that profits at the UK’s top takeaway businesses increased 13% from £160m to £180m last year.

That contrasted sharply with the top 100 UK restaurant groups, whose profits fell to 64% from £345m to £125m, resulting in a dramatic profitability swing between the two categories.

Funding Options said the UK’s takeaway food sector has avoided the turmoil impacting the wider restaurant sector and benefited more from the proliferation and usage of delivery apps.

80 of the top 100 takeaways were profitable last year, compared to just 65 of the top 100 restaurant groups. Turnover for the takeaway market rose 10% from £2.46 billion to £2.7 billion over the 12-month period.

The research suggests that the struggles of the UK restaurant sector are in part down to the simultaneous overexpansion of a larger number of private equity backed chains, many of which took on expensive property overheads.

The oversaturation of the market has coincided with rising business rates, increased supplier and staff costs and weak consumer spending. As a result, many major chains such as Byron and Prezzo have been forced to close large numbers of branches.

Funding Options also explains that the recent boom in delivery apps has had a different impact on the fortunes of restaurants and takeaways.

While for takeaways they have increased overall sales, for restaurants they have had a much more mixed impact, as app-based sales have restricted the higher-margin alcohol sales which restaurants often depend on.

Funding Options adds that the growth of takeaways has been helped by their ability to quickly respond to changing market trends, such as the increasing popularity of vegetarianism and veganism in the UK. While some takeaways have added healthier options to their menus, there has also been a growing number of specifically health-focussed takeaways, such as Chop’d.

Conrad Ford, CEO of Funding Options, said: “Takeaways have been more resilient than more upmarket restaurant in the face of the post-Brexit vote slowdown in consumer spending. Takeaway owners have also been more cautious about taking on potentially ruinously expensive property costs.”

He added: “Takeaways have quickly adapted to changing trends in the food industry, moving quickly into higher margin healthy food. They have also been able to capitalise on the rising popularity of newer apps like Just Eat and Deliveroo.”

Funding Options says that for the success of the UK’s takeaway sector to continue, owners must have ready access to vital finance get them off the ground.

Mr Ford said: “If we want to maintain a healthy takeaway sector, business owners need the funding to get going, and to succeed.”

Funding Options is one of the UK’s leading online marketplace for business finance. In the last year, more than 50 different funders have lent to UK firms through Funding Options.

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