Restaurant outlet growth is expected to stabilise post-estate rationalisation, according to Lumina Intelligence.
Lumina’s Operator Data Index for Q1 2024 highlights that leading brands are forecast to see flat outlet growth of +0.4% in 2024F, following a prolonged period of site closures to alleviate debt.
The sector is moving towards consolidation, with companies optimising operations and scaling up through strategic restructuring and acquisitions to boost financial outcomes.
Lumina notes that these actions reflect an adaptive response to current market challenges and an effort to stay relevant in a rapidly changing food service landscape.
Closure rates among mid-market casual dining brands are expected to ease as strategic estate restructuring slows down.
Wagamama is expected to lead expansion efforts following its recent acquisition by Apollo, with growth of 6.2% between 2023 and 20224F. Meanwhile, Pizza Hut is forecast to see outlets decline by -12.7% due to franchisee, Nine Food Group placing 38 sites on the market.
The top growing branded restaurants are forecast to achieve a net +48 additional sites in 2024F, and average growth rate of +25.3%.
London-based neighbourhood pizza chain Yard Sale Pizza is forecast to lead outlet growth, with a 36.4% increase between 23 and 24F, driven by the success of its operating model with the brand expected to open 4 additional sites this year as it expands into west London.
Boparan-backed Slim Chickens also continues to be a market challenger, expected to see robust growth of +34.9% capitalising on the growing fried chicken trend.
Meanwhile, Megan’s, Rudy’s, Banana Tree, Flat Iron and Hickory’s Smokehouse will all see 20% or higher outlet growth.
In terms of turnover, the top 10 branded restaurants are forecast to see sales growth of +4.4% in 2024F.
Premium Indian restaurant brand Dishoom is expected to break into the top 10 in 2024F. Turnover is forecast to more than double vs 2019 value due to the high quality yet accessible nature of the brand.
On the other hand, casual dining brands including PizzaExpress, TGI Fridays and Pizza Hut continue to struggle to recover pre-pandemic values stemming from closures of unviable sites.
Rudy’s Pizza is expected to achieve the highest turnover growth rate in 2024F, at 45.8%, benefitting from strong physical expansion in the capital alongside omnichannel revenue from its ‘Bake at Home’ pizza offering.
Banana Tree is also expected to see robust growth of 40.7%, leveraging The Big Table Group’s portfolio to optimise underperforming brands through site conversions. Flat Iron is expected to achieve strong growth with new openings trading ahead of expectations, bolstered by its quality offering and affordable pricing.
The full report is included as part of Lumina Intelligence’s ODI subscription, a solution that provides businesses with access to comprehensive insight, data, concepts, and innovation on the UK’s branded hospitality sector. To find out more, click here.
