The UK restaurant market is expected to grow +5.2% to a value of £18.7bn in 2023F, -2.6% behind its pre-pandemic value, according to the Lumina Intelligence Restaurant Market Report.
Penetration has remained flat year-on-year, seeing restaurants lose share of the total eating out market as operators struggle to boost volumes.
Restaurant market growth is behind pubs and fast food with players more exposed to the impact of dampened consumer spending, staff and food and drink inflation.
Enduring outlet decline remains a drag on restaurant market recovery, with a forecast loss of over 4,500 sites from 2019-2026F, and cost increases is the leading inhibitor.
Operators across the independent and branded segments of the market are navigating high food and drink inflation, unstable energy prices as well as increases to national minimum wage, alcohol duty and business rates.
Outlet decline in the independent segment is forecast to drive an overall decline rate of -1.5% in 2023F.
Branded restaurants are forecast to outstrip wider market turnover and outlet growth across the next three years.
The branded restaurant segment is set to exceed its 2019 value in 2023F, with a turnover growth rate of +9.0%.
Brands are growing share of the total market led by merger & acquisition activity, innovation and adaptation.
Brands including Fat Hippo, Pizza Pilgrims and Honest Burger are driving engagement through seasonal limited edition launches, collaborations and concepts beyond service-led dining.
Menu management tactics are balancing modern consumer demands with cost control amid challenges.
Menu price inflation, a boost in meat-free dishes and lower calorie additional courses are key menu mechanics in 2023.
Premium ingredients, “kitchen tourism” appealing to appetites for international cuisine and vegetable centric dishes are leading trends across menus.
Economic recovery and the continued outperformance of branded restaurants is expected to result in a market value of £19.5bn in 2026F.
Average earnings outpacing inflation alongside interest rate reductions are forecast to bolster consumer spending power over the next three years.
The UK restaurant market is forecast to continue to grow behind the total eating out market (+1.4% vs +2.6%), changing shape as brands lead growth in high-quality low-ticket avenues.
To find out more about Lumina Intelligence’s new UK Restaurant Market Report 2023, and to purchase your copy, please click here.
