The UK’s casual dining scene may have changed radically over the past 12 months, but that doesn’t mean the sector is about to self-destruct
Yes, there have been some big-name casualties and the challenges faced by the likes of Jamie’s Italian, Prezzo and Byron have been widely publicised. But concerns about the health of the wider sector may be unfounded because the casual dining sector is doing better than you’d think.
Data from the market research group NPD calls into question the view that casual dining operators can’t help but lose money.
According to the research, casual dining restaurants saw a 7% increase in visits in the year to June 2018
Put another way, that was an additional 35 million visits compared to the year before.
Additionally, casual dining restaurants count for 5% of the out of home (OOH) dining market. According to the data, even though the wider OOH market saw a fall of 43 million visits in that period, casual dining continued to grow.
Speaking about the findings, Dominic Allport, insights director at NPD Group explained: “Casual dining restaurants remain one of the key growth stories in Britain’s OOH foodservice market, despite the high-profile closures, rescues and restructuring seen in this sector in recent months.”
He continued: “But while the market is expanding, success is not guaranteed. One of the problems has been the tendency for some operators to scale up too quickly, with quantity of sites outweighing the quality of sites.”
The rise in rent prices, business rates, food costs and the minimum wage have all been blamed. As has Brexit.
Many have described it as the perfect storm, but as the clouds clear some companies are proving they can stay competitive. Christian Elmes, non-executive board member of several leisure & hospitality groups, commented, “The UK leisure market is large and is still in growth, although arguably too much supply at too high a cost came on to the market over the last 7 years, and clearly we are now going through a period of adjustment. However, operators that offer a quality product and service from locations that customers want to visit and at a price they are willing to pay will continue to succeed. Furthermore, careful site selection and consistent execution by the management team is paramount, if operators are to stay the distance and scale over the medium term.”
Success is also about knowing when to follow a trend or not. For example, competitive socialising might be the next big thing, but that success will be based on an operator’s ability to evolve and create new concepts that meet customer demand.