Outlet numbers are a critical metric we closely study within MCA’s Operator Data Index. Recently we rechecked December 2019 numbers, reassessed growth trends and reviewed outlook announcements from operators, ahead of producing our own forecasts of expansion/contraction across 250 leading casual dining brands.

At the headline level, this generated a net increase of 130 outlets or 1% growth. Coming after two years of annual decline, this would support the claim we are now coming out of the casual dining crunch.

However, the devil is in the detail and the market will remain something of a curate’s egg, good only in parts.

The strongest growth is expected from the out of home juggernaut of traditional fast food. Leading practitioners here know exactly what needs to be done, there are growth advantages from strong franchisee involvement and frequently modest sized footprints. In addition, they enjoy longstanding price-led value and convenience strengths, which continue to be invested in as they roll out across a widening set of location types.

Modest growth of just 1% is expected in contemporary fast food, which includes a more diverse cuisine set of counter service-based operators. In outlet counts, growth will be led by Pret A Manger (underpinned by EAT conversions) and Five Guys (supported by strong financial backing and an appreciative consumer fanbase). We regard Five Guys as contemporary rather than traditional fast food because of the differentiating provision of alcohol. In terms of percentage growth, this league table is expected to be led by the 25%+ increases at Coco di Mama, Island Poké and Wolf Street Italian.

Double digit growth of any form is anticipated to be much more of a rarity in the still only weakly recovering branded restaurant sub-market. Nando’s is the only operator expected to add 10+ outlets, while chains set to enjoy 10%+ annual growth (together with 5+ new sites) will be more limited, and led by the assorted likes of Cosy Club, Franco Manca, Giggling Squid, Honest Burgers and Mowgli.

Despite their different cuisine specialisations, shared attributes of these growing companies include commitments to value for money, across different price points; on-trend consumer relevance, including measured adventurousness and aspirational, democratic appeal.

Within the pub/bar restaurant market, we are anticipating marginal net decline, due to continuing rationalisation and format re-assignment at the largest players, including JD Wetherspoon, M&B and Greene King. Branding within pubs has long operated on something of a spectrum, and we have seen the pendulum swing very much towards the non-branded pole, and it might take some time before this situation reverses - if ever. As such, it will not be such a surprise to hear that Loungers, with their non-corporate lounges, is expected to the strongest growing operator here in 2020 with 18 new sites predicted.

It is certainly to be hoped that over the course of 2020 the modest increase in casual dining provision will be met with a commensurate increase in consumer demand. Cost pressures are clearly going to remain challenging, but just maybe after the crunch comes the calm.