Contemporary fast food to see subtle 2020 growth

Contemporary fast food brands are set to experience slight growth in 2020 following three consecutive years of growth decline, MCA analysis has revealed.

Despite growth for some operators including German Doner Kebab and Pure, contemporary fast food brands declined in total outlets by a net of three sites in 2019, hitting an outlet decline of -0.2% in December.

Following 2019’s continued closures for brands like Pod, Eat and El Mexicana, the sector is expected to grow at a rate of 1.1% this year, considerably slower than previous years (9.8% in 2017, 5.5% in 2019).

Due to vast levels of competition in the space, several operators were acquired by stronger competitors in 2019 and have since been closed or transitioned.

MCA predicts that Azzuri-backed grab-and-go concept Coco di Mama will lead large brand growth in the sector this year at a growth rate of 25.9%. It is set to open seven sites in 2020, most of which will be acquired POD restaurants transformed into the Coco format.

“2019 marked a challenging year for many contemporary fast food players including POD and Vital Ingredient,” said Katie Prowse, insights manager at MCA and HIM.

“Heightened competition in the healthier space, with supermarkets, coffee shops and bakeries increasingly competing for on-the-go spend, as well as wider Eating Out market challenges around property and business costs led to a challenging landscape.

Five Guys, Pret and German Doner Kebab are all forecast to remain in the segment’s top ten by outlet numbers in 2020, with growth rates of 14.3%, 7.2% and 21.1% respectively.