Outlet growth set to slow in 2017
The latest MCA data has shown outlet growth across the eating out sector is set to slow over the next 12 months.
The research shows net outlet growth among leading brands set to slow to 3.7% in 2017, down from 3.9% in 2016. That year was itself a slowdown after a 6.5% spike in 2015.
However, net growth remains resilient with 521 net new outlets set to open this year – equivalent to 10 per week. Subway continues to lead the pack with 120 new sites set to open this year.
Contemporary fast food is expected to see the strongest outlet growth this year – anticipated to be at 15%. However, this is still down on the 22% growth rate for 2016. MCA’s Outlet Growth Analysis points to the effect of a maturing of the market as previously fast-growing brands such as Five Guys begin to slow their rate of expansion.
Italian brands are set to make up one in 10 of all new openings in 2017, the research shows, will South East Asian is set to be the fastest growing cuisine of the year, with a predicted growth rate of 20%.
Brands with “affordable premium” offers, such as Franco Manca or Honest Burger are also expected to grow rapidly during the coming 12 months.
Meanwhile the data points to stagnant growth at medium sized brands – those in the 30-50 bracket. Half of the top 10 medium-sized brands are expected to either have negative or no growth this year. The report says this demonstrates operator pressure around being “caught in the middle”.
The report concludes: “After rapid expansion until 2015, 2016 was a turning point, with growth slowing as brands struggled with increased property costs and a suggestion of market saturation in larger city centres limiting opportunities. MCA expects these trends to continue into 2017, and as operators face moderate expansion, acquisition activity may become more important in the coming year.”
For more information about the analysis please contact Laura Bicknell on firstname.lastname@example.org