The UK restaurant market is forecast to reach a value of £18.2bn this year, closing in on its pre-pandemic value, despite considerable challenges, Lumina Intelligence’s insight director Blonnie Whist told delegates at MCA’s Restaurant Conference.
Growth in the value of the market is being driven by the slow down in net closures, coupled with an increase in branded new openings. It’s the branded segment of the market driving turnover recovery, with the growth rate forecast to be +3% between 2022 and 2025.
The market is predicted to see further growth in the years ahead to reach an overall value of £18.7bn by 2025, with growth stabilising around the 1% mark from 2023F-2025F, following a £7bn boost in 2022.
“The strong sites have persevered. Outlet decline in the branded segment has contributed to improved average weekly sales for remaining sites, with weaker performing outlets ceasing to trade,” Whist said.
Looking at the fastest growing brands, of which Mowgli tops the list, five of out the top 10 feature Indian, Mexican or Italian menus, highlighting the prevalence in demand for international cuisine.
“It’s also interesting to note that in our consumer data we picked up that the consumer mission of ‘wanted to eat specific cuisine’ has increased in importance for restaurants in the most recent quarter.”
While the overall picture is on positive growth, Whist also referenced the “considerable challenges” being experienced by businesses this year, which are expected to have a knock-on impact on consumer spending.
Using psychographics, Whist said that Lumina’s data shows there has been a +2ppt increase in consumers being price-led, “which just demonstrates how inflation levels and the rising cost of living are forcing consumers to be pre-led, who wouldn’t usually be”.
With three-quarters of consumers now aligning to price-led values, operators across the market will need to emphasise value for money credentials through promotions, loyalty schemes and good quality products and services, she said.
