Bright prospects T


he combined impact of recession, squeezed incomes, rising food costs and the dramatic increase in the number of branded coffee shops have resulted in a challenging environ- ment for the UK restaurant and casual dining market in recent years. However, despite prominent head- lines around the number of pub closures and the restructuring of managed estates, the restaurant and casual dining sector has weath- ered the recession better than many consumer-facing industries. It is now well positioned to benefit from the improving economy, consumer confi- dence and spending power. Indeed, the Greene King/You-


Gov leisure spend tracker for June 2014 reported that at 40%, eating out achieved its greatest share to date of total UK leisure spend. Undoubtedly, considerable chal-


lenges remain. On the one hand, with consumers becoming increasingly demanding, operators need to step up their game and be more innovative and proactive in their efforts to keep established brands current, adapt to trends and effectively harness social media. At the same time, many parts of the pub sector in particular are still suffering from years of under- investment and wage increases are struggling to keep in pace with inflation. Nevertheless, we believe that the


prospects for the restaurant and casual dining sector are bright, as


evidenced by the rapid influx of new restaurant brands and concepts into the UK in the last year or so, and a marked increase in transactional activ- ity in the sector. Managed pub operators have rec- ognised the need to diversify, and food-led estates have dramatically strengthened their offerings to com- pete more effectively in the casual dining sector, and in many cases are offering breakfast and coffee as well as the more typical lunch and dinner options. Additionally, many prevailing


market shifts are in the sector’s favour – for example, the rise of online retail and the resulting shift in shopping habits has driven an increase in high street retail vacancies. Much of this space should be attractive to restaura- teurs and publicans alike, and should help to create more diversified high streets, in turn driving greater footfall and spending. Accordingly, we believe now is the


right time to launch this Restaurant and Casual Dining Insight Report, high- lighting how the very best operators in the industry are looking to grow their businesses and are overcoming the obstacles and challenges posed by such a fast-changing environment. We hope you will find the articles within this report both useful and informative. Cameron Cartmell Sector Leader, Hospitality & Leisure EY


www.thecaterer.com


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September 2014 | Restaurant Insight Report


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