Chain operators are continuing to tighten their grip on towns and cities around the country, according to a leading retail property specialist.
While operators have been fighting hard to open new locations in London, there is evidence of a growing dominance of chain players outside the capital.
David Muslin, regional shopping centre leisure at CBRE, said: “Just 12 out of 194 restaurant brands, led by Pizza Express and Nando’s, currently control half of all chain restaurant branches in Great Britain. Fast-food markets are even more concentrated. Four players out of more than 100 – Subway, McDonald’s, KFC and Domino’s Pizza – control 56% of chain fast food outlets in the UK. The concentration story in pubs is the same: half of all chain pubs in Great Britain are owned by just ten operators out of a total of 141.”
In shop markets, CBRE has seen a trend towards branch contraction – particularly in clothing markets – as chains migrate away from small units in small high streets in favour of fewer larger units, allowing broader merchandising in bigger towns and cities.
However, the catering business is not locked into big high-volume prime high street pitches in the same way. Locational opportunities available to chain restaurant operators are much wider than those open to chain retailer, while fast food chains have even greater locational choice.
The end result is that catering operators continue to build huge, national branch networks, says Muslin. “Operators with 300 branches are saying that they want to get to 500; those with 100 are saying they want 300. And so it goes on.”