Branded chains the catalyst for market resurgence

Nando’s Soho

The eating and drinking out market has seen a net increase of 1,770 new restaurants open in the last 12 months, with chain businesses driving much of this growth, latest figures show.

The data, compiled for the new Market Growth Monitor from AlixPartners and CGA Peach, reveals the “contrast” between the 6.9% growth in restaurant sites and the 4.4% decline in wet-led pubs and bars in the year to the end of June.

The first quarterly Monitor figures confirmed that branded food pubs saw a 9% rise in numbers but the bulk of the overall growth in restaurants came from the, largely branded, chain restaurant market, according to the report.

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There are now more restaurants with licences in Great Britain than drink-led ‘community locals’ – 27,500 against 26,700. The number of pubs and bars overall fell by 2.6% over the year to just above 53,000, the report said.

Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Monitor in partnership with AlixPartners, said the good news was that the long-term decline in the total number of licensed premises in Britain – including hotels, clubs, restaurants and other venues selling alcohol on the premises – appears to have bottomed out.

“Over the last year, total numbers actually increased slightly by a net 965 to just over 124,000, driven largely by the expansion in restaurants. In the previous five years, numbers had fallen by over 8,000,” he said.

Urban areas are the main focus for the new growth, seeing a 2.9% uplift in licensed premises in the year to June, with food-led sites, including restaurants and pubs, increasing 5.9%, while the numbers of drink-led businesses remained largely static.

Paul Hemming, managing director of AlixPartners, the global financial advisory firm, said that the figures from the Market Growth Monitor illustrate that restaurant growth is genuinely a UK-wide story, with growth in many parts of the UK outstripping that of London.

“The reality of today’s eating-out market is that, beyond the M25, there are more expansion opportunities for the leading branded operators, as shown by the presence of cities such as Leicester, York and Sheffield in the top 10 growth towns,” he said.

“The proliferation of branded eating-out concepts to relatively new destinations, and its obvious implications for the independent operator cohort, is a picture that chimes with what we hear in the marketplace anecdotally, through the businesses with which we work. It is clear that the desire for quality food and bar offerings has spread across the country.”

He added: “The reality of the move to food is borne out in the CGA Peach data which shows that today in Britain, for the first time, the number of licensed restaurants outstrips the number of drink-led community pubs – a switch that occurred earlier in 2015.”

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Andrew Seymour

The author Andrew Seymour

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