Turnover decline in the restaurant sector is set to slump to its lowest point since the recession, according to the latest data from MCA.

The UK Restaurant Market Report, unveiled at MCA’s Restaurant Conference yesterday, forecasts turnover decline in the sector to be at -2.8% this year, driven by mounting pressures including rising input costs, challenges around staff shortages and more budgetary conscious consumers.

The report concludes that operators must communicate exceptional, experiential value to win the battle for customers.

The report values the restaurant market at £19.4bn, from 31,584 outlets in 2018.

The report acknowledges the recent casualties in the branded restaurant space and reveals two out of five of the Top 50 branded restaurant chains do not expect to see any sales growth in 2018. However, the branded segment as a whole is still in growth, with turnover expected to rise 3.7% in 2018, to £4.9bn – albeit compared to an increase of 9.9% in 2016.

The report points out that brands continue to grow their share of the overall restaurant market, accounting for 30% of total sales and 16% of overall outlets. However, despite growth in share, a reliance on promotions is dampening spend at dinner.

Steve Gotham, Director of Insight at MCA says, “Competition across branded restaurants is fierce and there have been a number of casualties in the last year. However, specialist concepts among small and medium brands are driving growth for the sector.”

“Furthermore, promotional use has increased strongly at branded restaurants with 28.6% of visits now involving the use of a promotion, a rise of 2.5%pts over the previous year. Availability of vouchers and promotional offers has increased its importance for consumers eating out in branded restaurants.”

To find out more, or to order a copy of the report, please email enquiries@mca-insight.com.

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